Pricing Accuracy in Practice

David Forbes

By David Forbes, HIDA Director, Healthcare Supply Chain Collaborative

One of my proudest achievements during my Mercy Health Services tenure was the level of collaboration achieved with our vendor partners. During the April Contract Administration Conference, I had the privilege to share the stage with Medline Industries President of Distributed Products Bill Abrams to discuss the 98.4% pricing accuracy rate earned by each team’s commitment to partnership, hard work, and focus.

Step one of this successful pricing accuracy program was simply deciding to tackle the issue. Both of us, Mercy and Medline, saw an efficiency improvement opportunity, and we decided to do better. Staff was dedicated on both sides to enrich and maintain master data (including part numbers, contract number and tier information, pricing, and units of measure) in a way that ensured each company’s systems matched. After a recent contract award and timed with its launch, my team provided Medline a data dump of all items procured through Medline; Medline then layered in what they had loaded as item-level attributes. After a couple of iterations, our organizations agreed to a single source of truth.

Since this initial data load, Mercy and Medline has met on a weekly basis to both pre-load all known future price changes and correct any price discrepancies in the moment. Contract eligibility discrepancies were often resolved by the Mercy and Medline staff calling manufacturers on the fly together; when this was not the case, Medline would hold discrepant invoices for up to 21 days to prevent unnecessary credit and rebills.

In order for this collaboration to be successful, Mercy had to work through a substantial system challenges, most notably a supply chain information system that experienced its most recent major update in 1994. Creativity and hard work supplemented the fact this system did not have data upload capabilities or the ability to load data prior to real-time. Discrete steps included leveraging macro software to get the data in and loading the initial source of truth in between orders and on a Saturday.

This was one trade partnership case study of many from my time at Mercy, and I am beyond excited to foster industry-wide collaboration in my new role with HIDA. A supply chain is only as efficient and effective as the various players are collaborative, and in the unique economic and policy environment that is healthcare efficiency and effectiveness are paramount. Whether you are a provider, distributor, manufacturer, or GPO, we each have ownership in a process that leads to high quality, value-based patient care.

For more information about HIDA’s Supply Chain Collaborative designed to address and solve longstanding supply chain issues, don’t hesitate to reach out to me at forbes@hida.org.


About David
David Forbes served as the Director, Value Analysis, and Director, Contracting Services, for Mercy, an IDN based in Baltimore, Maryland, after spending time in both supply chain consulting and residential home building. David will leverage this provider- and industry-based experience in his new role at HIDA as Program Director, Healthcare Supply Chain Collaborative, by focusing on the development of industry-level standards in contract administration, e-commerce, and supply chain visibility for the purpose of creating a more effective and efficient supply chain.