As more and more hospitals feel the pinch of health care reform, there is an increasing need to better track a hospital's supply chain where waste and inefficiencies can run rampant.

This week, GHX, a supply chain consulting firm, announced the introduction of an automated solution to manage and track a hospital's implantable medical devices, including physician preference items (PPI) used in operating rooms. GHX said it's the industry's first such end-to-end supply chain solution for automating implantable medical devices.

The implantable medical device supply chain is a $40 billion dollar market and is currently the most costly supply for any hospital, according to Derek Smith, chief commercial officer at GHX. Prices for these types of devices are also rising, making them the focus of even more attention. It's also an area where providers have the least visibility which, in effect, can contribute to a large revenue leakage.

"Health care has got to reduce costs," Smith told DOTmed News. "Our solution, that we are rolling out, will reduce costs without reducing medical staff or telling people what they can and can't use."

The system cuts out the inefficiencies, so to speak, by automating 12 out of 15 manual steps that take place in the typical workflow process — everything ranging from scheduling to product usage, payment and replenishment.

GHX identified more than $5 billion in waste from both providers and suppliers surrounding how implantable devices are managed. They attribute most of the waste to these manual steps that are also redundant and error prone.

Industry experts have also pointed to the importance of having better processes in place to take full advantage of the Food and Drug Administration's proposed rule for tracking medical devices, otherwise known as the the unique device identifier (UDI) rule. The UDI is essentially a number that identifies a particular medical device and is intended to help hospitals keep track of recalled products as well as manage their inventories better. Riskier, implantable medical devices will be the first types of devices to get the UDI.

GHX's new solutions, called Case Xpert and Order Intelligence [SM], are already available in the marketplace for early adopters, and GHX has set up several pilot sites to test them. Smith said they already see a significant increase in purchase order accuracy and a decrease in payment cycle time.

Under health care reform, there will also be a greater need to track how these products contribute to the objectives of value-based purchasing, which promotes better patient outcomes at a lower cost.

"Over time [with this product] we're going to drive [the industry] to a more standardized way for everyone to do this, because today it's different based upon every major IDN," said Smith.

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