What is the Right Address? Moving Medical Products Through the Healthcare Supply Chain Continuum

April 2024 – The Journal of Healthcare Contracting

Navigating the intricacies of healthcare supply chain management requires precision, particularly in ensuring that vital medical resources reach their designated endpoints without delay. As the dynamics of healthcare delivery undergo a transformative shift – from hospitals to non-acute facilities and even healthcare at home – the importance of having clear and standardized addresses has never been more critical.

Defining the Addresses:

The Ship To address identifies the physical location where the product is to be received. This could range from an ambulatory center to a senior living facility, depending on the needs of the end-user.
The Bill To address designates the location where the invoice for the product is to be received and processed. This might be the corporate accounting office or a designated P.O. box responsible for managing invoices and payments for supplies.
The Sold To address identifies the primary account or top parent account responsible for maintaining the contract with the Group Purchasing Organization (GPO) or supplier. This could be an integrated delivery network or health system overseeing multiple facilities.
The Deliver To address specifies the department or unit within the Ship To location where the product is to be delivered. For instance, within a hospital, this could be the specific department responsible for utilizing the product in patient care.

Standardization of Ship To and Bill To addresses across contracts are essential to reducing confusion, so products are delivered on time. This consistency not only enhances the efficiency of operations but also minimizes errors and discrepancies downstream, particularly when reconciling invoices and chargebacks.

By adopting standardized definitions and practices for Ship To and Bill To addresses, healthcare supply chain stakeholders can:

Improve On-Time Delivery: Clear and consistent addressing ensures that products reach their intended destinations promptly, reducing delays and enhancing overall supply chain efficiency.
Reduce Errors and Discrepancies: Standardization minimizes the likelihood of errors in invoicing and billing processes, reducing discrepancies and streamlining the chargeback process.
Enhance Contract Management: optimizing procurement processes and ensuring compliance with the correct pricing tiers in contractual agreements.

Clear definitions and standardized practices for Ship To and Bill To addresses are fundamental pillars of effective supply chain management. By aligning on these definitions and implementing standardized processes, healthcare supply chain stakeholders can navigate the complexities of modern healthcare delivery with greater efficiency, accuracy, and reliability. Ultimately, this ensures that critical medical supplies reach the individuals and facilities that need them most, contributing to improved patient care and outcomes.