Healthcare reform begins now

Now that the U.S. Supreme Court has rendered its decision on the Affordable Care Act, it is time to get back to the real work of healthcare reform. The landmark case removed a great deal of uncertainty regarding whether implementation of the health reform law would continue to move forward. The majority opinion made clear that the federal government can require individuals to purchase health insurance on the private market or be subject to a tax penalty.

The Court invalidated the application of the Act’s provisions that threatened states with the loss of Medicaid funding if they did not expand their Medicaid programs, leaving the door open for states and the Congress to address these issues in the future. While politics in Washington may continue unabated, the actual day-to-day business of creating value, improving efficiencies and increasing productivity in the healthcare supply chain must begin anew.

The Healthcare Industry Supply Chain Institute (HISCI), working collaboratively with the Healthcare Supply Chain Association (HSCA), completed work on a best practice “roster” that a majority of HSCA’s GPO members now have posted on their websites. A roster is a GPO’s official list of current members (i.e., healthcare facilities) with data fields that track customer identification, delivery addresses of goods, and fields for shipping addresses as well. Rostering is the process by which GPOs and suppliers organize and classify data elements to track that information. The goal of establishing a Best Practice Roster that includes uniform terms, information, and numbering is to help suppliers and distributors track sales in a more accurate, efficient, timely, and cost-effective manner – in other words, improve the healthcare supply chain.

The problem identified by the group was that every GPO’s roster is unique. The Rostering Task Force led by HISCI member Rick Weinberg of Covidien met monthly for over two years to discuss, research, and address the concerns regarding this issue. As a result, the parties agreed to standardize the most common components of existing roster templates, while maintaining customized fields specific to each GPO.

Comprising med/surg companies, distributors, and pharma representatives, a broad spectrum of the supply chain industry was represented on the task force. Throughout the process, HISCI worked closely with HSCA’s Committee for Healthcare eStandards (CHeS), chaired by Dennis Byer of Novation, to ensure the GPO perspective was included. HISCI will host a free webinar describing this Best Practice Roster in greater detail in the near future. The webinar is also expected to announce that HSCA member GPOs will begin to alert suppliers and others that use of the “old” rosters will sunset by the end of 2012.

One thing that became evident during the development of this best practice is that the issues that surround GPO rosters such as “class of trade” and “parent-child relationships” would require further examination and input before they could be standardized in the Best Practice Roster. Instead of diving into these issues next – and wishing to build on their success – HSCA and HISCI have begun reaching out to members and non-members through market research to capture their thoughts on other important projects, with the goal of improving the GPO/supplier contracting process. To date, the research has suggested interest in the following topics for healthcare supply chain improvement:

  • Standardized components of GPO request for proposal.
  • GLN/GS1 data standards.
  • GPO training.
  • Small/minority-owned business contracting.
  • “Green” contracting practices.

If you’re interested in participating in the effort to improve the contracting and administrative elements shared between GPOs and suppliers, please contact us. We would benefit from your perspectives and priorities on how to improve the healthcare supply chain, especially in relation to how GPOs and suppliers can work together.

In writing for the majority of the Court, Chief Justice Roberts said, “We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders.” In other words, it’s up to Congress to change the law. Given the current political environment, it is probably more accurate to say that it is up to the healthcare supply chain to institute the reforms we want to see and that will help deliver value and quality to health care providers and their patients. The process has already begun.

Curtis Rooney is president of the Healthcare Supply Chain Association, Meredith Young is executive director of the Healthcare Industry Supply Chain Institute.

1 Comment on "Healthcare reform begins now"

  1. MTI is a small-medium sized medical equipment manufacturer. I like the discussion above to standardize on the data, GLN/GS1, etc. Being a smaller manufacturer we don’t have all the employees it really takes to manage all the data because it is not uniform and another big problem is that we see members part of multiple GPO’s. So how do we know which GPO to record a sale under and how can we manage this information as a smaller manufacturer? It is very difficult.

    Also, a compaint we and most other medical suppliers have is that many of the purchasers and employees of the members don’t even know which GPO they belong to or what a GPO even is. This makes quoting them difficult because manytimes the quote is provided, non-GPO suppliers are quoting against us, and then after it is all done, we find out they are on a GPO we supply to with better pricing and we loose the business. It seems that many members don’t really care if you are a supplier on the GPO. We deal with capital purchases and I think this is the type of product these issues are more pronounced.

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