Week 2 Disscussion Again
slfontenot
Fig.7.5.pdf
The sophistication in automating this process has in- creased tremendously since the late 1990s. Applications now include electronic catalogs; information systems such as enterprise resource planning (ERP) systems from vendors such as Infor (www.infor.com) or McKesson (www. mckesson.com); warehousing and inventory control systems from vendors such as TECSYS (www.tecsys.com) and Manhattan (www.manh.com); exchanges from vendors such as Global Health Exchange (GHX) (www.ghx.com); and inte- gration with other systems such as clinical, revenue manage- ment, and finance. An innovative technology in this area is radio frequency identification (RFID); more information can be found at www.advantech-inc.com/index.html.
With increased automation, these systems have improved supply chain performance and management in healthcare, with more innovations expected in the future. The healthcare supply chain is an untapped resource of financial savings and revenue enhancement opportunities.23 Recognizing these opportunities, HIMSS advocated for more improvements in a white paper titled Healthcare ERP and SCM Information Systems: Strategies and Solutions. HIMSS indicated that ERP systems will be tools for quality and safety because they integrate capabilities such as procure-to-pay, order-to-cash, and financial reporting cycles. These functions should help institutions match needed materials with care in a more timely and cost-effective manner.24
Integrated Applications in Supply Chain Management The importance of these ERP and SCM systems should be apparent, including the technology associated with them, such as bar code scanners and electronic medication cabinets (e.g.,
Pyxis [www.carefusion.com/our-products/medication-and- supply-management/medication-and-supply-management- technologies/pyxis-medication-technologies/pyxis-medsta tion-system] and Omnicell [www.omnicell.com]). The basic components of an integrated healthcare supply chain system include the following:
• Supply item master file: A list of all items used in the delivery of care for a healthcare organization that can be requested by healthcare service providers and man- agers. This file typically contains between 30,000 and 100,000 items. Fig. 7.4 shows a supply-item master file.
• Charge description master file: A list of all prices for services (e.g., Diagnosis-Related Groups [DRGs], HCPCS, and CPT) or goods provided to patients that serves as the basis for billing.
• Vendor master file: A list of all manufacturers or dis- tributors (vendors) that provide the materials needed for the healthcare organization along with the associated contract terms and prices for specific items. This file typically contains 200 to 500 different vendors or suppliers.
• Transaction history file: A running log of all material transactions of the healthcare organization. In a com- puterized system, it is a running list of all supplies and materials being used to deliver care or manage the operations of the institution.
These four files must be integrated to support the operations and management of the supply chain. The integration neces- sary in the modern healthcare organization is illustrated in Fig. 7.5 as a diagram of interfaces across supply chain, clinical, and financial systems.25
FIG 7.4 Extract sample of a supply item master file. (Dr. Jerry Ledlow, personal files.)
122 UNIT 2 Information Systems and Applications for the Delivery of Healthcare
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Supply Cost Capture As a survey of supply chain progress26 demonstrates, “In all industries, not just healthcare, three out of four chief executive officers consider their supply chains to be essen- tial to gaining competitive advantage within their mar- kets.”27,p.2According to Moore, if the trend in the cost of the healthcare supply chain continues to grow at the current rate, supply chain could equal labor cost in annual operating expenses for hospitals and health sys- tems between 2020 and 2025.28 Clearly, maximizing effi- ciency of the healthcare supply chain is an increasing concern.
Consider supply charge capture events in which patient- specific supplies are ordered for the care of that patient and the items are then billed separately to the patient. “Every year, hospitals lose millions of dollars when items used in the course of a patient’s care somehow slip through the
system without ever being charged or reimbursed.”29, p. 1
Point-of-use technology, or capturing charges when supplies or materials are used, allows healthcare institutions to increase productivity, increase accountability, and reduce downtime through improvements in their internal supply chain. Auto- mated dispensing machines for medications or supplies can be used to decentralize store operations, capture charges, and bring supplies and materials to employees without compromis- ing security and accountability.30 These systems, if integrated with a solid business process, can enhance efficiency and effec- tiveness of the healthcare supply chain.
Strategic factors associated with supply success and enhancement are important as well. These include the following27:
• Information system usefulness, electronic purchasing, and integration
• Leadership supply chain expertise
Location & tracking data
Lo ca
tio n
& T
ra ck
in g
da ta
Location data
Vendor confirmation data
O rd
er c
on fir
m at
io n
da ta
V en
do r
co nf
irm at
io n
da ta
Vendor confirmations
Star AR/ revenue
RxOBOT APRS
Omnicel
Pharmacy ordering system
TBD
Cerner pharmnet
Cerner millenniumInfor Lawson
Cerner surginet
Cerner procure
Lawson RSS users
Cathlab(SPR) TouchScan
Mezzia
TECSYS
RecTrac
PacTrac
Requisitioning
Inventory control
Purchasing
Receiving
Invoice matching
Accounts payable
General ledger
POU Patient charging
system TBD Vendor catalog
GHX
V en
do r
ca ta
lo g
da ta
Receipt data
R ec
ei pt
d at
a
A dv
an ce
s hi
p no
tic e
Receipt data
R ec
ei pt
d at
a
Payment data General ledger transactions
Purchase order data
Purchase order data
P ur
ch as
e or
de r
da ta
Purchase orders
Vendor invoice
Requisitions
Requisitions
R eq
ui si
tio ns
Requisition data
R eq
ui si
tio n
da ta
R eq
ui si
tio n
da ta
R eq
ui si
tio n
da ta
Requisition data (Orders)
R eq
ui si
tio n
da ta
( PA
R u
sa ge
)
R eq
ui si
tio ns
( O
rd er
s)
D is
pe ns
ed g
oo ds
d at
a
Dispensed goods data
P at
ie nt
c ha
rg e
da ta
P at
ie nt
c ha
rg e
da ta
A D
T
A D
T
ADT
Item data
Item data Item data
(for pref cards)
Invoice data
Ite m
d at
a
Ite m
d at
a
Ite m
d at
a
Ite m
d at
a
Delivery data
FIG 7.5 Wire diagram of healthcare supply chain information systems. (Dr. Jerry Ledlow, personal files.)
123CHAPTER 7 Administrative Applications Supporting Healthcare Delivery
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
• Supply chain expenditures • Provider level of collaboration • Nurse and clinical staff level of collaboration • Leadership team’s political and social capital • Capital funds availability
This section has provided a high-level overview of technology in materials management. Box 7.2 details specific consider- ations for automating SCM and materials management.31
Human Resources Information Systems Human resources information systems (HRISs) leverage the power of IT to manage human resources. They integrate “software, hardware, support functions and system policies and procedures into an automated process designed to sup- port the strategic and operational activities of the human resources department and managers throughout the organi- zation.”32, p. 58 The authors distinguish between operational, tactical, and strategic HRISs. Operational HRISs collect and report data about employees and the personnel infrastructure to support routine and repetitive decision making while meet- ing the requirements of government regulations. Tactical HRISs support the design of the personnel infrastructure and decisions about the recruitment, training, and compensa- tion of persons filling jobs in the organization. Strategic HRISs support activities with a longer horizon such as work- force planning and labor negotiations. In contrast, Targowski and Deshpande state that generic HRISs typically include the following subsystems defined by function: recruitment and selection from among candidates; administration of personnel processes; time, labor, and knowledge
management; training and career development; administra- tion of compensation and benefits for active workers and pensions for retirees; payroll interface; performance evaluation; transitioning and outplacement; labor relations; organization management; and health and safety.33
Human Resources Information Systems as a Competitive Advantage Khatri argues that the management of human resources in healthcare organizations is a central function because the healthcare and administrative services delivered are based on the knowledge of staff delivering these services.34 Human resources management should focus on employee training, as well as developing and refining the work systems to improve the work climate and the quality of service to customers. Although healthcareorganizations shouldinclude the effective management of human resources as part of strategic planning, most fail to do so.Khatri offers three reasonswhy many health- care organizations do not employ optimal human resource practices. First, he argues that the responsibilities and activities of human resources personnel are institutionalized and under- valued in many healthcare organizations. Second, the provider culture of healthcare focuses on the clinical delivery of care with less attention paid to the effective management of resources. Finally, lack of expertise and low skills in the human resource function have limited the ability of human resource managers to engage effectively in strategic and operational planning. Khatri’s premise is that improving human resource capabilities should help human resource managers engage more effectively in managing human resources.34
BOX 7.2 Process Standardization
Process Standardization in Conjunction with Utilization of an Information System • Develop standard (or more standardized) processes for:
• Item master and charge description master maintenance and synchronization
• Supply stock selection, reduction, compression, and management
• Supply charge item capture (accurate and timely) • Accountability measures for Central Supply and clinical
units • Standardize clinical/floor stocked supplies replenishment
processes • Daily reconciliation of pharmaceuticals and medical/surgical
supply items, especially supply charge capture items • Taking into consideration:
• Clinical unit needs • Physical layout variations may require modification to an
accepted standard • The business process must be efficient before a technolog-
ical solution can be integrated into the process • “ One-size” solution will not fit all
Process Standardization in Process Improvement: Balancing Trade-Offs • Competing goals exist between various stakeholder groups;
trade-offs will be required to find the proper balance that best meets all needs
• Clinician Goals • Does not impede caregivers or patient care delivery • Minimize rework • Right supplies, right place, right time
• Supply Chain Managers/Central Supply Goals • Improve accuracy for supplies consumed • Improve timeliness for supply consumption • Efficient use of labor
• Revenue and Cost Avoidance Goals • Procure and acquire material wisely with contracted compli-
ance goals • Efficient management of materials considering utilization
rates, preferences, expiration dates and Food and Drug Administration requirements
• Reduce number of supply charge capture items • Improve accuracy for charge capture • Improve timeliness for charge capture • Improve charge capture rate
From Ledlow JR, Stephens JH, Fowler HH. Sticker shock: an exploration of supply charge capture outcomes. Hosp Topics. 2011;89(1):9. Reprinted by permission of the publisher (Taylor & Francis Ltd, http://www.tandf.co.uk/journals).
124 UNIT 2 Information Systems and Applications for the Delivery of Healthcare
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
Persona l use on
ly, do no t reprodu
ce.
2020-09 -04
shayna. rocourt@
student. ashford.
edu
