UDI: What does it mean to you? To your suppliers?

Magic number? Not quite. Still, a unique device identifier, or UDI, affixed to every medical product sold in the United States could go far in cleaning up supply chain inefficiencies, facilitating product recalls and quashing counterfeit products, according to proponents.
Those who have already gotten onboard aren’t looking back.

Southwest General, Middleburg Heights, Ohio, for example, has been transacting electronic data interchange using the so-called GTIN identification system for some time, says Teri Tyson, software specialist. “It has cut down on order errors, and forced manufacturers to clean up units of measure, which was big.” Inventory is down, as manufacturers and distributors ship just the right amount of product. Returns are down as well.

Long time coming
A UDI is a unique numeric or alphanumeric code, which acts as a key to certain basic identifying information about a device, such as the name of the manufacturer and the type of device, and may represent certain other information about the device, such as its expiration date and batch or lot number, according to the U.S. Food and Drug Administration. Plans call for this information to be contained in a publicly available UDI database.

It’s a decades-old dream. But developments in the past year and a half could finally bring the dream to reality.
In July 2012, the FDA proposed a rule that would phase in implementation of the UDI, focusing on the highest-risk medical devices first and exempting low-risk devices from some or all of the requirements. (The agency proposed exempting over-the-counter devices sold at retail, most of which already have UPC codes in place.)

“The unique identification system will enhance the flow of information about medical devices, especially adverse events, and, as a result, will advance our ability to improve patient safety,” FDA Commissioner Margaret A. Hamburg, M.D., said when the FDA issued its proposed rule. The agency accepted comments during a 120-day period, and was preparing a final rule at press time.

Staying on track
“Anything that improves patient safety or helps us look out for the people we take care of is on our radar screen,” says Diane Ashley, president and CEO, Seagate Alliance, Rochester, N.Y. With UDI in place, healthcare providers will be able to record implants in patients’ electronic medical records. “It will make it much easier for us to track this.

“Our only fear is that suppliers will try to pass along the additional cost for them to provide this type of labeling,” she adds. “But having said that, [the UDI] could be a benefit to them as well, because if a provider were to use an outdated device, and it’s in the record, they couldn’t come back to the vendor about that. Overall, I see this as a great safety measure for everyone.”

“Wide implementation of UDI will ensure the ability to track devices across all care settings, support safe and accurate device usage, create a standard of documentation in IT systems, streamline recall management, eliminate back-end rework due to poor data quality, eliminate the need to re-label products, and facilitate implementation of Perfect Order,” says Gene Kirtser, president and CEO of Resource Optimization & Innovation, or ROi, the supply chain arm of the Mercy health system in St. Louis, Mo. (“Perfect order” refers to an order processed electronically, that is, without human intervention, from order to payment.)

“Incorporation of UDIs into an electronic health record will allow providers to harness data in a standardized format to understand the safety and effectiveness of devices,” continues Kirtser. “In addition, UDIs will lead to broader adoption of automatic-identification-and-data-capture (AIDC) technology across healthcare, which will greatly improve accuracy and reduce costs of manual data entry. Furthermore, UDIs will facilitate more accurate and timely reporting of adverse events, which will help the industry address device problems quicker.”

“One of the primary benefits of UDI will be a significant enhancement of the industry – including manufacturers, distributors, and customers – to more efficiently and effectively manage product recalls,” says Michael Groesbeck, senior vice president, quality and regulatory affairs, Cardinal Health. “Recalls are infrequent for a given product, but occur with regularity across the broad portfolio of medical devices in the market. It is also anticipated that UDI will be of value in detecting and removing counterfeit medical devices from the supply chain.
“UDI will enable Cardinal Health to have a more accurate picture of its inventory, including the lot numbers and expiration dates of the products,” continues Groesbeck. “When fully implemented, the UDI will take the place of what is now called the ‘factory catalog number.’ Distributors will no longer have to manage situations in which multiple manufacturers offer different products with the same factory catalog number.”

Implementing UDI
“The interest level varies widely, but a subset of our customers are asking that Cardinal Health move toward implementing UDI as soon as possible,” says Groesbeck. “We are working directly with a number of customers to prepare for the eventuality of doing business by UDI, including the establishment of data pools and running transaction simulations.” Cardinal Health plans to use GS1 standards to implement UDI, and the company is working with its trading partners to support their efforts to implement GS1 GLN and GTIN standards, he says.

“The customers look to eliminate confusion concerning the identities of the numerous products they manage, better manage their inventories, and be more effective and efficient in managing product recalls,” Groesbeck continues. “Once fully implemented, the medical device UDI will enable access of detailed product information in data pools and product registries. Among the best known of these is GS1’s Global Data Synchronization Network. The FDA is also planning to establish a product registry that can be accessed by UDI stakeholders.”

According to GS1, the Global Data Synchronization Network will allow providers and suppliers to share data in real time, so that when one trading partner updates product information, others will have the update as well. The network will increase the accuracy of orders, reducing invoice errors and the number of duplicate processes, says GS1.

The cost of dirty data

Healthcare providers have a lot to gain by jumping aboard the UDI train. By standardizing and cleansing source data, they can: 1) gain deeper insight into their spend, 2) prevent pricing and/or unit-of-measure errors, 3) level pricing across departments and facilities, and 4) aggregate spend throughout the supply chain. These are among the findings of the GPO Novation in its 2012 white paper, “The Cost of Dirty Data.”

Industry research has shown that through the use of data cleansing and advanced spend analytics, healthcare organizations can realize savings of 0.5 to 1.5 percent of their annual supply chain spend, says Novation. But “dirty data” can impede these initiatives. Everyone in the supply chain suffers. To wit:

  • Product descriptions that lack a consistent and standardized format (e.g. noun, application, attribute, etc.).
  • Products missing vendor or manufacturer information (e.g. name or catalog numbers).
  • Products with incomplete packaging data (e.g. missing unit of measure and conversion factors, as well as standardized to the ANSI code).
  • A high number of errors reported through EDI transactions.
  • A high number of invoice discrepancies.
  • A high number of manual purchase orders routinely submitted.
  • A high number of purchase order discrepancies.
  • Poor contract pricing utilization with procurement processes.

Four keys to clean data
Healthcare providers can take several steps on the path to clean data and supply chain efficiency, says Novation:

  • View data cleansing as an enterprise-wide endeavor. Many healthcare organizations view data cleansing as a critical initiative but one belonging only to materials management. While materials management may be the “gatekeeper” for many data management processes, these processes are often ineffective as they relate to data cleansing.
  • Establish effective data management policies and processes throughout the supply chain. Many healthcare organizations are unsure of the number of duplicate records within their item master; the number of routine, manual record orders that sidestep the item master; or the number of manual orders requested within a given month by department and requestor. The ability to report this information to stakeholders and establish attainable goals that are directly aligned with the organization’s data cleansing strategy will facilitate faster supply chain savings.
  • Implement critical controls at each point where source data enters the supply chain. Adding, deleting and changing product information in the item master is important for successful contracting, procurement, inventory, accounts payable and reimbursement processes. In addition, validating and enriching product information at the initiation of a request to add a record to the item master is essential.
  • Implement a proactive data cleansing approach. To realize the most value from the supply chain, the process must channel clean, accurate product information at the beginning of the process. Many of today’s item master maintenance processes are reactive in addressing new product request enrichment and validation, due to limited staffing and a lack of the necessary skills needed to validate, standardize and enrich product information.

Benefits of Unique Device Identification

When fully implemented, the UDI system may:

  • Allow more accurate reporting, reviewing and analyzing of adverse event reports so that problem devices can be identified and corrected more quickly.
  • Reduce medical errors by enabling healthcare professionals and others to more rapidly and precisely identify a device and obtain important information concerning the characteristics of the device.
  • Enhance the FDA’s analysis of devices on the market by providing a standard and clear way to document device use in electronic health records, clinical information systems, claim data sources and registries. A more robust postmarket surveillance system can also be leveraged to support premarket approval or clearance of new devices and new uses of currently marketed devices.
  • Provide a standardized identifier that will allow manufacturers, distributors and healthcare facilities to more effectively manage medical device recalls.
  • Provide a foundation for a global, secure distribution chain, helping to address counterfeiting and diversion and prepare for medical emergencies.
  • Lead to the development of a medical device identification system that is recognized around the world.

Source: U.S. Food and Drug Administration, http://www.fda.gov/medicaldevices/deviceregulationandguidance/uniquedeviceidentification/default.htm

The UDI and patient outcomes

The unique device identifier, or UDI, may do more than clean up the supply chain. It may also help providers associate specific medical devices with patient outcomes.

“We believe that the industry must move towards using comparative effectiveness research for product selection,” says Gene Kirtser, president and CEO of Resource Optimization & Innovation, or ROi, the supply chain arm of the Mercy health system in St. Louis, Mo.

“Adoption of UDI will facilitate our ability to analyze attributes across medical devices and look for meaningful trends in clinical outcomes tied to each device. Additionally, broad adoption of UDI should greatly improve data quality and exchange across all health care stakeholders. Doing so should have a meaningful positive impact on costs.”

As part of the Healthcare Transformation Group, Mercy is participating in an R&D team, comprised of physicians and clinical researchers, to stimulate implementation of a UDI system. (The Healthcare Transformation Group comprises Mercy, Geisinger Health System, Intermountain Healthcare, Kaiser Permanente and Mayo Clinic.)

“UDI will greatly facilitate research in both safety and effectiveness of medical devices when incorporated into clinical data,” says Joseph Drozda, Jr., M.D., director of outcomes research, Mercy. “For maximal benefit, UDIs need to be associated with key device attributes that will be found in the FDA’s Global UDI Database, along with additional attributes that are thought to be clinically significant by experts.

Mercy is in the final stages of an FDA Demonstration Project that is showing the feasibility of creating a database containing both device- and EHR-derived clinical data, says Drozda. The next phase of the work would be to create similar data sets at each of the other Healthcare Transformation Group systems, and then to link those data sets in order to increase the robustness of any research. In order to accomplish this, the group is considering creating a distributed data network around national device registries in a hub-and-spoke model, he says.
“This is a very large undertaking, but it will create powerful tools for doing device safety and effectiveness research in the real world.”

What’s the hang-up?

Despite widespread support, UDI still has a ways to go before the healthcare supply chain implements it.

“Part of the challenge is, the final UDI ruling isn’t out yet,” says Michael Pheney, vice president, healthcare, GS1 US. Manufacturers may be taking a hard look at UDI, but without a final rule, many are holding back on implementation, he says. But there are exceptions. “What I think is exciting is the fact that we’ve been working with a number of more cutting-edge manufacturers who have already started to figure out how they’re going to supply information to the FDA database, which is part of the requirement for UDI. They have models laid out, though they may have to tweak them, depending on where final regulation comes down.”

Says Gene Kirtser, president and CEO of Resource Optimization & Innovation, or ROi, “We believe that, by far, the majority of the manufacturing sector is working towards adoption of UDI, although the pace is relatively slow. This is largely due to three main reasons: First, the final UDI regulation has not been published by the FDA; second, the UDI adoption is a large undertaking, and manufacturers are having a difficult time prioritizing the project in light of other objectives; and third, it is difficult to estimate an ROI on the work to support UDI.

“Implementation and adoption of UDI will require investment and work from all stakeholders, not just the manufacturer,” says Kirtser. “While manufacturers own the responsibility for establishing and registering a GTIN for their products, all healthcare stakeholders must integrate the use of UDI for all downstream benefits to be realized. Distributors will need to modify their IT systems to facilitate use of UDI and will need to adjust their processes to ensure that all order, receipt, shipping and billing transactions are utilizing that UDI. Once fully implemented, distributors should realize benefits in data quality, information exchange and supply chain efficiency. Furthermore, distributors that are required to re-label products for their provider customers should see that requirement diminished.”

Michael Groesbeck, senior vice president, quality and regulatory affairs, Cardinal Health, points out that the medical device industry has been working on UDI for several years and that, as a result, many products currently in the market already have UDIs in the form of linear, or one-dimensional, barcodes. But questions remain.

“There are challenges represented by durable medical devices for which UDIs must be applied directly to the devices themselves,” Groesbeck points out. For single-use medical devices, the UDI will be applied to the product packaging, but not directly on the product. There are questions related to convenience kits and sets consisting of more than one type of medical device, but these are questions that will ultimately be resolved during the next few months.

“As the UDI replaces the factory catalog number as the basis of commerce, both manufacturers and distributors will need to configure their order/entry and inventory management systems to work with the UDI format,” Groesbeck continues. “Similarly, hospitals and other medical facilities will need to take the same steps if they wish to conduct electronic commerce with manufacturers and distributors.”

Supply chain and materials executives may have some work to do within their facilities and healthcare systems before UDI becomes reality.
“We have known about UDIs, because they are in our world,” says Karen Green, director of materials management, Southwest General. “But it will affect other areas in the hospital as well.” Surgery and the cath lab, for example, need to know that some products, such as implants, need to be scanned into the medical record.

“They have to make sure their systems are ready,” adds Teri Tyson, software specialist, Southwest General.

Despite the questions, Pheney is optimistic about what lies ahead. “We’re at a great point, a threshold,” he says. “With everyone identifying products the same way, we have a huge opportunity to really improve patient safety. Recalls are a great example. And we have a tremendous opportunity to optimize the entire healthcare supply chain.” Hospitals will benefit greatly, he says. “They are under tremendous pressure with reimbursement models changing. Putting standards in place offers tremendous opportunities to stamp out inefficiencies.”

FDA’s proposed rule

In July 2012, the U.S. Food and Drug Administration published a proposed rule for a UDI system. Final rules were expected to be issued soon.

With certain exceptions, under the proposed rule, a UDI would include:

  • A device identifier, which is a unique numeric or alphanumeric code specific to a device model.
  • A production identifier, which includes the current production information for a device.

The proposed rule would allow either of two systems to be used as the basis of a UDI: GS1 or HIBCC:

  • GS1 Healthcare US is an industry group that focuses on driving the adoption and implementation of GS1 Standards in the healthcare industry in the United States. Its UDI system is called the GTIN, or Global Trade Item Number. (Formerly known as the Uniform Code Council, GS1 developed the now-ubiquitous Universal Product Code, or UPC, for the retail and grocery industries almost 40 years ago. GS1 US created GS1 Healthcare US in January 2008 to make its mark in healthcare data standards.)
  • Another system, that of the Health Industry Business Communications Council, or HIBCC, is the HIBC Supplier Labeling Standard.

What is a UDI?

A UDI is a unique numeric or alphanumeric code, which acts as a key to certain basic identifying information about a device, such as the name of the manufacturer and the type of device, and may represent certain other information about the device, such as its expiration date and batch or lot number.

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