logisticstechoutlook

The Journey to Transform Data into Insights

By Jean Claude Saghbini, CTO and VP of Inventory Management Solutions at Cardinal Health

Jean Claude Saghbini, CTO and VP of Inventory Management Solutions at Cardinal Health

Communication and Connectivity

Digital technologies and the “internet of things” (IoT) is transforming our daily lives; everything is smarter, faster and more efficient.

Cell phones allow teenagers to communicate faster than anybody else on the planet. Cars park themselves. Our watch tell us how many steps we take each day, hour and minute. A sleeping newborn’s breathing, temperature and body position can be monitored by parents with the touch of a smart phone. Our household devices like thermostats, garage doors and security cameras can be controlled virtually from anywhere in the world.

"The healthcare supply chain–fueled with technology–is a strategic asset that can yield significant financial savings"

While many industries are capitalizing on these advances to improve their logistics, operations and the customer experience, the healthcare industry still has clinicians struggling to read medical device labels to get expiration dates and serial numbers. Barcodes are manually scanned off boxes and clinicians laboriously count product. Hospital supply rooms are stocked with millions of dollars of inventory that include expired products, nearly expired products, or products that will never be used.

The scope of this inefficiency in the medical devices market is staggering, leading to an estimated $5 bn of waste annually. Medical devices and implantables, like stents, pacemakers, hips, and knees are essential for improving the quality of life for patients. These items are high-cost and high-value and, unfortunately, flow through an inefficient supply chain.

• Every day, the healthcare supply chain loses inventory to shrinkage and product expiration. In fact, 7-10 percent of products likely expire on hospital shelves.

• Nurses can spend as much as 30 percent of their time searching for products that may or may not be used during a procedure, which is more than two hours per shift per nurse.

• Health systems are losing as much as 1 percent of their potential annual net revenue due to various issues associated with charge capture.

As hospitals and health networks move toward value-based care, it’s crucial to eliminate this wasted time and money. To reach a more efficient logistics, inventory and patient experience, partners across the healthcare continuum must create product visibility from the manufacturer to the hospital to the point of use.

A shared data platform among hospitals, device manufacturers, and distributors can help solve this problem by allowing them to see the same data and react to it. This connectivity of data can enable proper management of consigned inventory, accurate clinical documentation and product and workflow standardization across entire health systems.

Cardinal Health commissioned a national survey to hospital executives, discovered 85 percent of respondents said their health systems are currently working to identify or implement new ways to reduce supply chain waste and related costs. We’re seeing a trend of health systems looking for ways to better leverage data and analytics and promote transparency and visibility in the supply chain.

Hospital c-suite executives understand that an efficient, data-enabled supply chain can be a strategic asset. In addition, tech savvy and visionary hospitals and health systems are adopting an IoT approach to managing high-value medical devices, which allows them operational insights to increase efficiencies and reduce costs. The IoT approach is built on:

• A cloud platform for data sharing, analysis, visualization and action
• User-centric and clinically-minded design and workflows, to ensure ease-of-use and drive compliance
• All enabled by highly accurate, advanced radio-frequency identification (RFID) tracking technology that extends all the way to the point of use or implantation.

End-to-end Monitoring Solution

In every industry with competing priorities, investment in a particular technology can be a challenge. However, RFID is positioned to become the gold standard technology in this new era of connected end-to-end visibility. Automated systems can monitor high-value medical devices from the manufacturer all the way to the point of care. Such systems track every item in a hospital from the time it arrives from the supplier to the moment it is implanted in a patient or disposed of. With RFID, inventory can be accounted via near real-time updates from data captured automatically and accurately, and supplies can be reordered without human intervention. Likewise, the technology enables alerts about expired, soon-to-expire or recalled items.

In addition, with RFID, data can be analyzed to gather more meaningful insights around product utilization, which ultimately drives down the total cost of care.

RFID-tagged products can be housed in a "smart" supply cabinet. Inventory tracking software notes when a supply is removed from the cabinet without the need for manual entry. The item is then scanned in the operating room and linked to a particular patient, helping to improve the charge capture process. If the item is not used, it is automatically placed back into inventory and removed from the patient record when it is returned to the cabinet.

RFID tagging and RFID smart cabinets ensure the critical information needed to track high-value medical devices and implantables automatically displays in the hospital's inventory profile. This includes the model number, serial number, lot number, expiration date, cost and purchase order. RFID smart cabinets can perform inventory counts as often as necessary, to near perfect accuracy, without any potential for human error. And, the cabinet sends automatic alerts when products are removed, expired, recalled or out of stock.

The Path for Better Outcomes

To respond to these evolving healthcare needs and delivery models, the healthcare industry needs to go through the same supply chain transformation that revolutionized retail and other industries. We need to focus on tracking an item from the point of manufacture to use, and continue pushing toward a patient-driven supply network. With end-to-end visibility, all parties have a line of sight and can work to remove inefficiencies throughout the supply chain.

As a provider, manufacturer or distributor, we must think more holistically and collaborate with all partners to focus on our shared patient. If we embrace data standards and leverage emerging technologies, we can do for healthcare what the barcode has done for retail.

On the path to improve patient outcomes while reducing the total cost of care, the healthcare supply chain–fueled with technology–is a strategic asset that can yield significant financial savings.

So, while the fitness trackers and virtually-controlled garage doors are an amazing convenience, improved logistics and smart supply chains for our healthcare system are very much a necessity.