Health and care services

eProcurement: delivering benefits

Cell cultures in tubes 123rf 27872615_xleProcurement is achieving world-class patient safety and efficiency at St James’s Hospital by taking paper and cost out of the system. Vincent Callan and Simon Moores discuss its success.

As the largest university teaching hospital in the State, St James’s has an annual non-pay budget of €150 million and has a large and complex throughput of clinical products used in the care and treatment of patients. We catalogue 25,000 products and trade around 8,000 live products per annum, sourced from around 1,000 suppliers although 80 per cent of these come from our top 60-70 suppliers.

For the last 10-15 years, St James’s has been at the forefront of innovation in the supply chain management of procurement and has invested heavily in ICT systems and processes.

A systems applications products (SAP) project was introduced in 2001, this was soon followed with the introductions of Kan Ban Inventory Management system at all clinical levels in the Hospital underpinned with a full wireless SAP GUI achieving high levels of automation. Localised projects have also included scanning all proof of delivery and invoice documentation and using localised barcodes (viewed through SAP).

With these islands of excellence established, we decided to take a thorough look at ourselves and look at where we are going from here. Full eProcurement underpinned with Global Standards (GS1) was the natural next step.
We firstly undertook a global benchmarking exercise and found that the Australian model was closest to Irish healthcare with common business language standards. Retail, of course, has been using the same approach and yielding the successes for decades. We engaged in a proof of concept, which focused on a complete paperless business process through electronic data interchange (EDI) messages.

We also had a clear end game in sight i.e. that in the operating theatre, a single ‘bleep’ from the barcode should capture the data and also say “track me” (for full traceability), “pay for me” and “replenish me”.

Our previous experience with GS1 involved setting up the haemophilia track-and-trace solution, which continues to deliver efficiencies and savings and allows us to monitor all treatment provided to the patients (including product supply and usage). While this innovation was born from a supply chain failure, it is now recognised internationally as an exemplar model, as it provides full visibility of product location and consumption at the Patient level enabling efficient product recall if required.

Upscaling success
eProcurement takes a microcosm of success and achieves that on the mass market. A small Irish SME (Cruinn) was among the first to go live on the EDI process. Indeed, St James’s and Cruinn were the first hospital-business partnership in the world to go live with four EDI messages simultaneously. We are now engaging with all of our suppliers on Data Alignment and EDI, but what we’re really excited about is getting down to the scanning of medical devices, pharmaceuticals and consumables at the patient level.

We do that through the use of common identifiers and common standards (via GS1). We’re close to achieving that vision but the whole story is based on the premise that everybody in the supply chain speaks the same language: from the assembly line all the way through to the scan in the theatre. We aim to electronically track our consumption of all products the patient and will be able to recall any defective item very quickly. The alignment of mass Supplier and Hospital data can potentially avert harm to patients by warning users of a recall before administration at the bedside scan.
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As with anything so innovative, the hardest part is to get people to buy into the process. A lot of suppliers were sceptical but we are currently on-boarding a number of Global Manufacturers, Large National and International Distributors and a number of Irish SMEs. Interestingly, and unexpectedly, we found that agility increased as the size of the partner company decreased. SMEs can therefore reap these benefits more quickly than some larger players. International Legislation will soon mandate the use of unique identifiers for Medical Devices and Pharmaceuticals, so it makes sense for suppliers to get involved early.
Traceability for the patient is the key benefit and there will also be a financial benefit as the Money Follows The Patient model is introduced. Barcode software can help managers to achieve ‘dynamic patient-level costing’ thus identifying where that money is going, especially for high cost items.

As more suppliers come on board, the level of visibility and granularity will increase. In traditional procurement, suppliers are continuously retendering bids but eProcurement will provide a data pool to be used by all hospitals and ensure that everyone is speaking the same language and eliminating errors. We currently employ a large number of people to match up purchase orders and invoices, which adds a significant cost to the Exchequer.

St James’s Hospital’s approach is completely scalable as it has maintained a standardised approach. in addition, Suppliers will only need to publish data relating to their products once into a single data pool for all trading partners which is a significant advantage for all. We’re currently working through our top 50 suppliers and we also want to bring safety information – which is not necessarily readily available – into the new system.

Working solutions are essential. We now have a lead time of four hours for sending out a purchase order electronically, through the four message standards, receiving the goods, and clearing the invoice for payment – all without human intervention because it’s based on data alignment.

Future development
We have also completed an RFID project that tracks and traces high risk samples e.g. obtained through endoscopy or interventional radiology. The pilot involved installing RFID readers at strategic points along the delivery chain between theatres and laboratories and implementing basic rules such as separate ID cards for porters (to identify the carrier), one tag per bag of samples, and text/email alerts when delays occur.

This is all about patient safety and may well be the first system to track human tissue through the RFID process. We pick a small problem, we address it and we stress-test it to make sure it’s applicable elsewhere in the hospital, using a unique number to track each sample and capture data into the clinical system.

The critical mass will build throughout the remainder of 2015, by bringing on board as many trading partners as possible and bringing their data into the SAP system.

We constantly tender and put pressure on the market to deliver value, and take a full life cycle view of the costs and benefits. This is backed up by a robust procurement unit and an effective finance department which supports reinvestment and delivers strategic benefits.

Automation will be needed to deliver the Money Follows The Patient model by integrating systems and feeding through the data about specific high cost drugs to theatre and laboratories. eProcurement software will enable full financial visibility, thus helping managers to make decisions about finance and ultimately care. In a sector where speed and quality are of the essence, improving these processes makes a tangible difference in the drive to ensure a better quality of life for the patients who rely on St James’s services.

Vincent Callan is Director of Facilities Management and Simon Moores is Director of Finance at St James’s Hospital.

St James’s Hospital
PO Box 580
James’s Street, Dublin 8
Tel: (01) 410 3000
Email: info@stjames.ie
Web: www.stjames.ie

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