– Provider organizations ranked predictive analytics as the biggest healthcare supply chain opportunity in 2017, a recent Global Healthcare Exchange, LLC (GHX) survey revealed.
The survey of 50 healthcare organizations with the most automated healthcare transactions according to GHX also identified the use of data to make better healthcare decisions as critical to the future of healthcare supply chain, especially as value-based reimbursement models take hold in the industry.
“Healthcare’s supply chain continues to be at a pivotal juncture, taking increased advantage of advanced technology to deliver affordable value-based care by accelerating efficiencies and improving access to quality data for decision-making,” stated Bruce Johnson, GHX President and CEO. “The linkage between data on products used in patient care as recorded in electronic health records with accurate and comprehensive information about those products in item masters is key to solving the cost/quality equation.”
Value-based reimbursement models require care delivery to be as efficient as possible, but providers sometimes overlook how healthcare supply chain inefficiencies can impede value-based reimbursement success. Cardinal Health and SERMI reported in December 2015 that only one-third of the 150 hospitals surveyed considered their organization’s supply chain management process as “very effective.”
As a result, healthcare supply chain management was the second largest expensive for healthcare providers. Although, two-thirds strongly agreed that improving healthcare supply chain management would decrease costs, increase revenue, and enhance care quality.
To make healthcare supply chain management more efficient under a value-based reimbursement landscape, the GHX survey uncovered that provider organizations are looking to big data and predictive analytics.
“The supply chain is a valuable source of data on healthcare supply chain spend necessary for evaluation of outcomes and for decision-making for savings initiatives,” GHX wrote. “Supply chain leaders anticipate the use of this information becoming an important contributor to value (cost and quality) measurement as an important metric for assessing overall financial performance.”
Health IT leaders at healthcare organizations also viewed healthcare supply chain data as a key value-based reimbursement tool. A Black Book survey from December 2016 showed that 69 percent of healthcare IT leaders plan to prioritize the healthcare supply chain in 2017 as “the most valuable asset for actionable data mining” instead of population health and data analytics tools.
To develop more big data and predictive analytics capabilities, provider organizations in the GHX survey identified data management and analysis improvements as a top healthcare supply chain initiative planned for 2017. The organizations specifically expect to better understand supply chain costs through data, improve data management, leverage data analytics, and enhance data accuracy.
Healthcare supply chain optimization and cost reduction was another top project planned for 2017, according to the survey.
Among healthcare supply chain optimization plans, the organizations anticipated adding enterprise resource planning functionality, reducing supply chain costs, automating more processes and transactions, and decreasing special orders.
Healthcare enterprise resource planning solutions help provider organizations to manage key financial processes, such as human resources, supply chain, and budget. The tools can also integrate clinical and financial data so providers can access a more comprehensive view of their practice.
With value-based reimbursement models requiring financial and clinical monitoring, enterprise resource planning adoption rates are on the rise. Like the GHX report, the Black Book survey revealed that more organizations plan to adopt the solution to uncomplicate a myriad of tools within the organization that separately manage finances, supply chain, inventory, purchasing, payroll, and coding.
As part of their strategy to optimize the supply chain, provider organizations in the GHX survey also reported that they anticipate increasing supply chain standardization through the following methods:
• More standard physician preference items across clinical areas
• Value analysis implementation to boost clinical value and improve patient outcomes
• More automated solutions versus manual and paper transactions
Standardizing supply chain items and use has been a common challenge for providers. A 2007 study showed that physician preference items accounted for up 61 percent of healthcare supply chain spending, representing a major opportunity for cost-savings.
The standardization challenge is still felt by hospitals in 2017. A recent Premier survey found that 98 percent of healthcare executives expect to further standardize preference item purchases over the next three years.
Adding more value analysis to the equation, though, could lead to significant healthcare savings. Healthcare organizations could reduce costs by 10 to 20 percent by ensuring that physician preference items align with clinical outcomes, James Spann, Practice Leader of Supply Chain and Logistics at Simpler Healthcare, told RevCycleIntelligence.com in March 2016.
Rounding out the top four healthcare supply chain initiatives planned for 2017 was contract management improvements, GHX reported. Provider organizations expect to implement contract management systems, increase contract compliance, and achieve higher contract penetration.
Keeping a close eye on contracts is key to optimizing healthcare supply chain management. The Healthcare Supply Chain Association explained that some provider organizations are not as vigilant as they should be during contract processes with group purchasing organizations.
Provider organizations should be aware of competitor rates and amounts paid by health plans for healthcare supplies. Since market forces frequently influence price, providers should know market values to prevent paying more than the item’s worth.
With big healthcare supply chain management plans for this year, GHX also reported that the supply chain executive role will grow in 2017.
“According to the survey, supply chain leaders will increasingly work hand-in-hand with clinical peers to help lower costs and improve patient care,” the organization stated. “In addition, the supply chain team plays a more strategic role in provider organizations, tackling a variety of critical healthcare issues (e.g., value based care, improving clinical performance, reducing risk, EHRs, etc.).”