Excerpts from a discussion with Intalere Chief Commercial Officer Steve Kiewiet
On the cost management side of the healthcare supply chain, studies show that billions of dollars in the entire industry are spent on products that never get used in the actual delivery of care for a variety of reasons including inventory management, consumption management or process management. Getting better at managing those costs is critical for every health system, especially as their revenue continues to decrease. Reimbursement goes down, but costs are going up. Cost of living, labor costs, benefit costs, pharmaceutical costs and the amount that organizations must pay employees are all going to continue to rise. In an environment where revenues go down and your costs rise, you must become very efficient at managing those costs. And that’s critical for every healthcare system.
Add in the fact that as care delivery moves closer and closer to the home, the ability to manage those costs becomes even more complex, which is going to require a whole new suite of tools and data to manage that entire episode of care and link all of those things together. So, what is lacking most specifically in the healthcare supply chain today, and how do we fix it?
One thing that is lacking is the ability to cohesively take all of this information that’s available from disparate systems today and get it into a format that allows good business decisions to be made. A lot of the data is available and a lot of the connecting points are available. But taking data, turning it into information, and processing that data adherence to an established set of data standards, is amiss in the industry today.
If you think about it in terms of the retail setting, you don’t worry about scanning a barcode across the scanner at the grocery store or any other retail establishment because those industries have established one standard for those barcodes and it’s readable in any system. Healthcare doesn’t have that yet, so there are many different forms of barcodes and RFID systems that are used. We need to get to where all the major stakeholders in the industry decide that we’re going to play together with one standard so that we can share this information with each other. There are a lot of firewalls in the healthcare industry and some of them are very good. If you think about patient information, we need to protect that at all costs. But in that culture of protection, we create a lot of firewalls that don’t need to exist.
We could become better as an industry if we were to get manufacturers, healthcare providers and everybody in between working together on sharing some of this information, especially information on product spend, how products get used and the impact of those product uses. By doing this we are building care pathways and removing care variation or unnecessary variation that doesn’t lead to better therapeutic outcomes. Getting to that established standard and getting the right players in the room, not waiting for the government necessarily to create that standard, but letting the industry create that standard together in a way that’s meaningful and useful, will bring us a lot of value.
Why has this been so difficult to accomplish? It’s hard to do because no one wants to take on some of that work. Especially if it means maybe losing protection around what might be viewed as proprietary data. But it is imperative that we address those aspects so that we protect what needs to be protected while sharing what should be shared to drive to a much more efficient healthcare delivery system. Because at the end of the day, all of us have an obligation toward the health of the communities in which all of us live and work and serve; we must own that, not only for the patients that are coming in, but for ourselves and our own families.
Steve Kiewiet is a nationally-recognized leader and innovator in healthcare supply chain management, leadership development and operational efficiency, and was featured in The Journal of Healthcare Contracting as one of the “Top 10 People to Watch in Healthcare Contracting.”
Kiewiet was elected to the Association for Health Care Resource & Materials Management (AHRMM) Board in 2017 as a provider representative and will serve as AHRMM Board chair in 2021. AHRMM is the leading membership group for healthcare supply chain professionals.
We Can Help. Intalere provides resources that can assist in the area of supply chain, as well as many other areas of your healthcare facility. Review our Post-COVID Transformation Toolkit and reach out to see how we can help. Contact our Customer Service team at 877-711-5600 or email@example.com or your Intalere representative.