In my previous blog post, I described how the healthcare industry has yet to tackle standardization and automation of so-called “advanced” supply chain transaction sets. These are processes around pricing alignment and reconciliation that go beyond the basics of placing an order, delivering the products and billing for those products. The manual management of price changes in healthcare is complex, challenging and costly, placing a significant burden on all parties to a contract (e.g. manufacturer, distributor, provider, GPO).
Essential to supply chain, and the key to keeping an organization stocked with the supplies needed to operate is the procurement of goods and services. The importance of this process can’t be understated in the case of healthcare, where lives are literally on the line and depending on the right supplies when they are needed.
Traditionally, the procurement process has lagged behind other business processes in advancements relating to efficiency and automation, but that is changing. Cloud-based technology is enabling procurement to make progress along the lines of data interoperability, and visibility and agility in transactions.
Two decades ago, a few healthcare supply chain partners decided to automate basic transactions so that they could improve efficiency and accuracy and reduce costs – and the GHX Exchange was born. Today over 10 thousand supplier divisions and 19 thousand provider facilities use GHX standards to automate the four core supply chain documents: The purchase order (850), purchase order acknowledgment (855), advance ship notice (856) and invoice (810). These “basic” supply chain transactions encompass the processes around placing an order, delivering the products and billing for those products.
What role does the purchase order acknowledgment (POA) play in supporting better patient outcomes? This simple task, when accomplished, can be traced back to multiple advantages in the healthcare supply chain. This is especially true when the POA is part of a holistic, standardized approach to order management. The supply chain team gains greater visibility into order status and can better manage the process of delivering the correct products in a timely manner to support patient care.
In my last post, Integrating Academic and Non-Acute Supply Chain, I drilled down into some of the challenges for this initiative around data, buying behavior and aligning cross-functionally for success. This is an ambitious endeavor, aligning the people, processes and systems, but certainly will deliver significant benefits. When you are ready to take the next steps there are several key considerations for gathering requirements and choosing a technology partner.
Expanding on the thoughts from my earlier post, Healthcare Supply Chain in 2019: A Look Forward, I want to take a deeper dive into the three areas that were top of mind, starting with the integration of non-acute and academic supply chain.
As more and more organizations in both the academic and acute care sectors are realizing the broad value that supply chain can deliver, there is a movement to integrate (consolidate and standardize) the core mechanisms of sourcing, procurement, supplier and contract lifecycle. The procurement of goods and services through an efficient and effective supply chain will become increasingly vital to ensure that higher-education institutions have governance related to the effective appropriation of funds.