Transcript Coalition for Healthcare eStandards overview

Coalition for Healthcare
eStandards, Inc.
Overview
April 26, 2004
© Coalition for Healthcare eStandards, Inc.
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Statement of Purpose
• Work with established standards organizations,
to actively support the industry's effort to reduce
supply chain costs and waste.
• Promote the development, adoption and
implementation of uniform open
standards for use in e-commerce.
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Guiding Principles
• Promoting the adoption and use of open data
exchange standards.
• Reducing costs and increasing efficiencies of
the supply chain for all industry stakeholders.
• Accelerating industry-wide adoption of
comprehensive data standards.
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Membership
• Core Membership: available to any GPO
or e-commerce company that has at least
50% of its business in the healthcare
industry.
• Affiliate Membership: open to all
interested parties.
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CHeS Core Members
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Affiliate Members
• Agfa Corporation
• Becton Dickinson
and Company
• Cap Gemini Ernst
and Young
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• Cardinal Health
Supplyline
• ECRI
• Lawson Software
• Medbuy
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Officers of the Board
Dennis Byer (Consorta) – Chairman
Larry Dooley (Novation) – Vice Chairman
Joe Pleasant (Premier) – Past-Chairman
Dave Verhulst (Amerinet) – Treasurer
Craig Wigginton (Neoforma) – Secretary
Mark McDougall – Executive Director
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Board Seat for AHRMM
• The Association for Healthcare Resource
and Materials Management (AHRMM) of
the American Hospital Association (AHA)
also serves on the CHeS Board
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What is AHRMM?
• An organization of over 3,000 members of the
supply management chain at the provider level
• As a personal membership group of the AHA,
has influence to the entire membership of the
AHA’s over 5,000 member hospitals at the
senior executive level.
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AHRMM’s Role with CHeS
• To collaborate with, and provide rapid
feedback from the provider’s perspective, in
the development and implementation of CHeS
objectives.
• To collaborate with CHeS during the
implementation phase of standards and to
provide support to the providers who will
ultimately be responsible for makings these
standards effective.
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Current CHeS Initiatives
1. Product Taxonomy (UNSPSC™)
2. Customer Identification (GLN)
3. Product Data Utility (PDU)
4. Market Segmentation (Class of Trade)
5. Pharmacy eStandards
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Initiative #1
Product Taxonomy Committee
Dave Turner, Chair
[email protected]
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The Problem with
Product Classification
• There is no industry product classification.
• Changes in technology and development of
products result in many diverse classifications.
• Electronic commerce highlights the need for
consistent product classification.
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The Problem with Product Classification
•Product information that is passed back and forth
between members of the supply chain must be
organized over and over again by each member of
that supply chain for use in:
- product catalogs,
- contract negotiations,
- spend analysis,
- product standardization,
- supplier rationalization,
- market share analysis, etc.
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The Solution to the Problem of
Product Classification
“We need an accurate product
classification used by manufacturers,
distributors, GPOs, and Providers.”
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Objectives of the CHeS Product Taxonomy project
Our goal was to develop an industry standard set of
hierarchical categories for products used in
healthcare that is:
• Open and free of licensing fees for all members of
the healthcare supply chain
• The result of consensus among members of all
segments of the supply chain
• Leverages the best available expertise and
experience
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The Solution for Product Taxonomy
• An open industry standard enables the free flow of
information between healthcare providers,
manufacturers, and distributors, thereby driving
significant waste out of the healthcare supply
chain and driving down healthcare expenses.
• UNSPSC™ Segments 42 “Medical Equipment,
Accessories and Supplies” was seen as a logical
solution. However, the existing version was not
developed fully enough to use for actual
commerce. Less than 50% of the industry’s
products were represented.
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What is the UNSPSC?
The United Nations Standard Products and
Services Code (UNSPSC) is a global reference
taxonomy for products and services. It is designed
to address the multiple needs of diverse groups
involved in the buying, selling, analysis and
regulation of goods and services worldwide.
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Why choose the UNSPSC?
• Free – download from www.unspsc.org
• Avoid expense of developing/maintaining your
own taxonomy
• Non-proprietary – does not lock you into one
vendor’s solution
• Consistent, complete-yet will evolve over time
• Only viable alternatives
• Industry adoption gaining critical mass
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…just one example
Medical Equipment and
Accessories and Supplies
Wound care products
Sutures and related
products
Marketing-oriented
catalog content
Suture
Cat No.
Product Name
1714G
ETHILON Nylon
Suture
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UNSPSC™
Description
A nonabsorbable, sterile, surgical, monofilament suture
composed of the long-chain, aliphatic polymers Nylong 6
and Nylong 6.6.
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UNSPSC Architecture
Segment 42 = Medical Equipment and Supplies
Family 31 = Wound care products
Class 22 = Suture and related products
Commodity 01 = Suture
-- or -April 26, 2004
”42312201”
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The UNSPSC can be:
• Searching tool for finding products and services
• Analysis tool for analyzing spend, sales or market
share
• Organizing tool for creating requisitioning
catalogs and Item Masters
• Framework for e-Commerce content management
within and between
trading partners
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The UNSPSC is NOT:
• A source for uniquely identifying individual
products to the brand, model, size, package
quantity level
– see UPN
• Clinical equivalency
– Instead, UNSPSC is a quick way to group all
candidates for clinical equivalency into one
bucket for further analysis
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Benefits of Using UNSPSC
• Improving data accuracy – Item Master cleansing
• Turning raw data into actionable knowledge knowledge is power!
• Streamlining procurement process
• Benchmarking
• Reducing maverick off-contract purchases
• Standardization projects
• Better arm yourself for vendor negotiations
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How can you implement the UNSPSC?
• Recommend leveraging a service
• Work with your MMIS vendor to support
• At its most basic:
– Add the 8-digit code to every item
– Use for queries and sorts
– Sort categories, descending, by total
spend, hen analyze
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Outsourcing
“A high percentage of our spend was unclassified. It was difficult to
create spend reports and know where to focus our cost savings
initiatives. Neoforma DMS effectively delivered classification of our
item master file to the UNSPSC schema. We saw improvements in
our spend analysis immediately, and couldn’t be happier.”
--Cesar Calderon
Director of Materials Management
San Mateo Medical Center, San Mateo, CA
2004 Neoforma Case Study
Profile
–
–
Before
Uncategorized
Categorized
After
509-bed, acute and long-term care facility
GPO affiliation: AmeriNet
Challenges
–
–
–
Acquired long-term care facility, needed to keep supply expenses
lean
Only 29% of items classified for reporting
Difficult to identify areas to focus cost savings initiatives
Uncategorized
Categorized
Results
– 89% of items classified
– Improved spend analysis
– Improved ability to focus supply savings initiatives
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©2003-2004, Neoforma, Inc. All rights reserved.
Where can I get more information?
www.unspsc.com
Or
www.CHeStandards.org
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Initiative #2
Customer Identifier Committee
Doug Armitage, Chair
[email protected]
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The Problem with Customer Identification
• There is No Single Number – for the
Healthcare Supply Chain
How This Impacts You:
Up to 7% of all prices are incorrect on Invoices
Getting Prices Right!
You Must Maintain
Thousands of “Points of Administration”
Complete GPO Credit
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The Problem with Customer Identification
• Suppliers assigned unique customer numbers to each
provider.
• Providers must communicate this customer number to the
supplier so that the supplier knows how and where to ship
the ordered product.
• Given thousands of supplier relationships and hundreds of
delivery points, all parties are required to maintain
tremendous amounts of information about each other.
• Research has shown that about 60% of all invoice errors
are due to a supplier not recognizing the provider properly
and not extending contract pricing correctly.
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The Solution
• A Single Globally Accepted Supply Chain
Identification Number
• Used By:
–
–
–
–
Providers
Suppliers
GPO’s
All Others
• A Central Registry/Database for all
Stakeholders
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The Customer ID Registry
• Who
– Entity Name and Address
– Granular: Ship To’s and Deliver To’s
• What
– Default Class of Trade
• Where
– Entity Organizational Relationships
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Objectives of the CHeS Customer ID Committee
Identify new technology solutions that will support broad
customer identification number enumeration and database
access.
• Develop guideline for a customer identification number system.
• Oversee a technical team that will assist in new solutions.
• Make recommendations to the industry.
• Oversee the launch of a customer identification number system.
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CHeS Announcement 4/27/04
After years of research and exploring
options, CHeS announces its decision to
encourage adoption of the Global Locator
Number (GLN) as the single customer
identification standard in healthcare to drive
down supply chain costs.
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What is a GLN?
The GLN, a 13-digit number used to
identify a specific location, is being used
throughout the world with no need for
trading partners to assign proprietary
numbers to ensure uniqueness. Over
200,000 companies already use the GLN in
the U.S.
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Al Cook, Past-Chair, AHRMM:
“To drive efficiencies in the healthcare
supply chain, we all need to speak the same
business language. By using GLN as the
single customer ID standard, all parties in
the healthcare industry have a very easy and
proven way to improve the way we do
business, which ultimately improves the
quality of patient care.”
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Dennis Byer, Chair, CHeS:
“It’s time to unify around a single, easy-touse and logical identification standard that
will reduce duplication and complexity in
the supply chain. The GLN is the proven
global standard in 23 industries worldwide.”
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Dennis Byer, Chair, CHeS:
“With a giant like Wal-Mart solidly behind
it, the GLN is clearly viable as a standard
location identifier in our industry as well,
and we look forward to driving its use
within healthcare to reduce supply chain
costs and improve patient care.”
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Robert Betz, CEO & Pres., HIGPA:
“The Health Industry Group Purchasing
Association (HIGPA) is pleased to
announce its endorsement of the CHeS
adoption of the global location number
(GLN) for the health care industry. To
support current and future supply chain
efficiencies in the U.S. health care sector,
HIGPA endorses the GLN customer
identification standard.”
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Moving Forward
• CHeS Chair will serve on the GLN Registry
Steering Committee
• CHeS representative on UCC’s Board of
Governors
• Users of the GLN registry will also have
representation on the GLN Registry Steering
Committee
• Users of the GLN registry will contract directly
with UCC
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How To Get Started
• Review material that is available on the CHeS
website, such as:
– GLN reference material
– Implementation Guide
•
•
•
•
•
Contact your GPO for guidance and support
Gather Your Ship To/Deliver To Information
Perform a Roster Review with Your GPO
Champion the Number with your Suppliers
Complete the Steps in the Implementation Guide
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Initiative #3
Product Data Utility (PDU)
Committee
Kathleen Garvin, Co-Chair
[email protected]
Joe Pleasant, Co-Chair
[email protected]
Garren Hagemeier, Co-Chair
[email protected]
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e-COLLABORATION
7. Collaborative
insight &
product
development
6. Collaborative
sales & promotion
planning
4. Collaborative transaction
management
3. Item synchronization
2. Single item registry
1. Common data standards
Time / Degree of trust
& complexity
Source: A. T. Kearney for GMA -FMI
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Benefits
5. Collaborative supply
chain management
The PDU Initiative
The CHeS and the Health Care eBusiness
Collaborative (HCEC) joined in an effort to
study the feasibility of creating a Product
Data Utility (PDU) to help synchronize
medical/surgical product information across
healthcare supply chain.
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What is a Product Data Utility?
• A Product Data Utility is a system and organization that
interconnects trading partners across the
supply chain to synchronize core product data to standard
specifications and distribute standardized product data
from manufacturers and distributors to data aggregators
and end-users.
• It enables participants to synchronize and maintain
accurate product and packaging information in near real
time.
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The PDU Feasibility Study
• The PDU Feasibility Committee was
comprised of representatives from major
manufacturers, distributors, as well as
database, consulting and software firms.
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The PDU Feasibility Study
• Kickoff meeting in Chicago on 11/13/02
• Creation of 3 teams with designated leaders
• Ongoing individual team and weekly
leadership conference calls
• Follow-up meetings produced the PDU
Feasibility Recommendation Report on
4/10/03
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PDU System Components
• Supplier Database
• Supply Data Dictionary
• Standards (GLN, UNSPSC, GLN) &
Participation Rules
• Central Data Synchronization Server
• Network (Input & Delivery
System)
• Governing & Operating Organization
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Product Data Utility Data Flow
Manufacturers
Aggregators
Distributors
Manufacturers
Users
(GPOs, IDNs, etc)
PDU/Repository
Distributors
Users
data inputs
data outputs
(GPOs, IDNs, etc)
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NOTE: Aggregators can represent data or trading partner aggregators, including exchanges
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Value to Providers
• Reduced product cost through improved contract
compliance
• Identification of non-contract/contract opportunities
• Increased transaction accuracy for ordering through bill
payment
• Improved accuracy in product sourcing
• Increase in patient safety due to accuracy of product
information
• Rapid access to information on new, discontinued,
replacement, and recalled products
• Accurate information to generate usable barcodes
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Value to Manufacturers
•
•
•
•
Single source of information distribution
Increases new product exposure
Enhances access to website for product information
Rapid distribution of information on discontinued,
replacement and recalled products
• Increased transaction accuracy for ordering, bill
payment, rebates, and administrative fee calculations
• Decreased administrative costs for rebate reconciliation
– Electrical industry manufacturers saved 1% of sales
annually
– P&G saved $3 million in admin costs devoted to manual
information synchronization
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Value to GPOs
• Increased contract compliance to GPO products
• Single source of product information from
participating suppliers
• Increased new contract opportunities due to new
product exposure
• Increased accuracy for admin fee calculations
• Enables accurate contract portfolio for
members
• Reduced costs for manually loading product
data
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The PDU Implementation Committee
• In addition to weekly conference calls, PDU
meetings have included:
1. August 12, 2003 in Chicago:
PDU Organization Kick-off Meeting
2. November 12, 2003 in Houston:
PDU Nuts and Bolts Meeting
3. March 23, 2004 in Dallas
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Next Actionable Steps for the PDU
• Gain Commitment/Consensus from Supply Chain
Members
• Form PDU Implementation Team
– Seeking Resource/Members from Across the Supply
Chain to Commit to Tailoring and Implementing the
Proposed Milestones
• Facilitate Contractor Selection
• Build/Pilot/Launch PDU
• Develop Marketing Strategy
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The PDU Initiative
• To learn more about the CHeS/HCEC PDU
Initiative, please visit the PDU website
located at:
www.CHeStandards.org/pdu/
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Initiative #4
Market Segmentation (Class of
Trade) Initiative
Allen Dunehew, Chair
[email protected]
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The Problem with Class of Trade
• COT definitions are heavily reliant upon
proprietary definitions and systems.
• Creates issues with accurate contract
loading and pricing.
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The Solution to the Class of Trade
Problem
“We need a single Class of Trade
standard used by Drug and Med/Surg
manufacturers, distributors, GPOs and
Providers.”
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Summary of the Current Climate
• Multiple systems and definitions with great
variation
• Pharmacy vs. other health care sectors
• Relevant legal issues
– Class of trade has some legal basis but has been
blended into business practices thereby complicating
the system greatly
• Manufacturers (sellers) have the right
to control pricing since they are giving
up the discount
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Goals of a New COT System
• Standardized descriptions, definitions and
codes
• Maintain autonomy of manufacturer to
avoid FTC and other issues
• Must be mainstream enough to achieve
adoption by mfg and wholesalers
• Must include areas beyond pharmacy
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Next Steps
• Finalize the Standard
• Rollout plan
• Timelines
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Initiative #5
Pharmacy eStandards Committee
Allen Dunehew, Chair
[email protected]
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The Problem with Pharmacy eStandards
• Multiple standards exist; yet none adequately address all
needs
• Open standards do not exist, with the exception of the
National Drug Code (NDC)
• Heavy reliance on proprietary standards and systems, have
produced a need of multiple cross-referencing systems
• Data needs are varied, problem areas include:
- Procurement
- Cross-referencing to products and catalogs
- Therapeutic categorization
- Reporting
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The Solution for Pharmacy eStandards
• The ideal solution would be an open standard that
addresses the identified data needs.
• The ideal solution could better support the
reduction of medication errors, costs and waste.
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Objectives of the Pharmacy eStandards Comm.
• Identify all standards available
• Survey the e-pharmacy industry to assess industry
needs
• Dialog with the FDA to ascertain future plans for
the NDC
• Identify strategies for developing and adopting
uniform open standards by healthcare
manufacturers, providers, distributors and ecommerce vendors for supply chain transactions
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Organizations Participating in the
Pharmacy eStandards Committee
•
•
•
•
•
•
•
•
•
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Amerinet
Consorta
Department of Defense
Global Healthcare Exchange
IMS Health
Neoforma
Novation
Premier
VHA
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Conclusions and Solutions
•
•
•
•
GLN (Common Customer Number)
UNSPSC (Common Product Identifier)
PDU (Industry Utility)
Class of Trade
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Call To Action
• Educate yourself and your organization on
standards
• Require Manufacturers, distributors and
GPO to support standards
• Insist that your MMIS partner supports the
standards
• Adopt standards within your organization
when available
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For more information, please contact
Mark McDougall
Executive Director
Coalition for Healthcare eStandards (CHeS)
3300 Washtenaw Avenue, Suite 222
Ann Arbor, MI 48104
Ph: 734-677-3300
Fax: 734-677-6622
[email protected]
www.CHeStandards.org
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