For many healthcare organizations, growth makes good financial sense, enabling them to lower costs through shared services and take advantage of better contract pricing afforded to high-volume customers. While Ed Friese looked forward to lower supply costs that expansion at Resurrection Health Care would bring, he knew trying to reconcile five different materials management information systems (MMIS) would create "a headache and a half for everyone in the organization." The Chicago-based healthcare system ultimately found synchronicity and success with e-commerce solutions vendor Global Healthcare Exchange (GHX), Westminster, Colo.
Growing Pains
Three years ago, Resurrection Health Care doubled the number of hospitals included in the system from four to eight in an 18-month period. Disparate technology made it virtually impossible for the healthcare system to capture aggregated data on total purchasing, which was necessary to secure the best contract pricing. While many of the hospitals ordered identical products from the same vendors, these items were often listed differently in each of the eight item masters hosted by the various hospitals.
Friese needed to improve the overall purchasing process--still a highly manual effort--leaving the purchasing staff with little time to handle special needs such as urgent requests for products or services required for critical patient care. Similar problems plagued the accounts payable department, which entered and paid invoices by hand. The time involved often delayed payments to suppliers, making it difficult to take advantage of lucrative early pay discounts.
Friese had tried earlier to consolidate purchasing and automate the process, with limited results. Electronic data interchange (EDI) connectivity had been set up with a few vendors, making it possible for buyers and their assistants to send purchase orders electronically, but corresponding purchase order acknowledgements were "sporadic at best," he says. The purchasing staff still had to follow up with vendors, usually by phone, to confirm that orders were received and the products were shipped. Even when suppliers sent electronic confirmations, the information mapped in the purchase order did not include the name of the buyer. As a result, there was no way to directly notify that person about back orders or other problems that needed attention.
Using dial-up connections also had its inherent problems. The slow batch process made it difficult to make cutoff times for next-day and second-day deliveries. Without technical notification that the full transaction had been successfully received, purchasers were never sure if any of the data was lost during transmission. There were also capacity issues. Dial-up connectivity simply could not handle the volume necessary for Resurrection Health Care to significantly expand the number of electronic vendors and, most importantly, the percentage of orders handled via e-commerce.
Cleansing Data
Resurrection Health Care ultimately chose GHX for its integration, data cleansing and automation processes. The healthcare system also wanted GHX's ability to connect to a wide variety of MMIS, its reporting capabilities, the number of suppliers connected to the exchange, its revenue- neutral business model and broad industry ownership.
Before its July 2002 go-live with GHX, Resurrection Health Care tackled its data cleansing needs. GHX and the healthcare system's staff first compared information in each of the eight hospital item masters to product data maintained and verified by suppliers in the GHX AllSource content repository. They made necessary corrections to item numbers, unit of measure and supplier divisions, and removed duplicate or obsolete entries. Once all of the item masters were cleansed and synchronized, the healthcare system utilized GHX Content Intelligence to maintain that level of accuracy and synchronization.
The GHX solution relies on supplier-established business rules and updates to the AllSource repository to identify and correct inaccurate product data in purchase orders during the transactional process. Hospitals are also notified of changes needed to keep their item masters current. Resurrection Health Care was eventually able to consolidate the original eight item masters into a single and more manageable database, with less than half the number of products contained in the multiple databases combined.
Resurrection Health Care connected to GHX using the Connect Plus solution, which provides standard connectivity to the majority of MMIS commonly used in healthcare and requires little effort from a hospital's IT staff. GHX placed a communications server behind the healthcare system's firewall, into which information was funneled from the various MMIS. The on-site server provides more reliable connectivity than dial-up, improved order monitoring, and secure and confidential (HIPAA-compliant) data transfer back to the MMIS, while minimizing much of the work that the MMIS had to handle. Orders placed via GHX are secured through encryption with non-repudiated high-speed delivery, enabling purchasers to confirm they were received in time. They can also be mapped to specific buyers to handle any necessary follow-up.
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