The Health Industry Distributors Association
reports that its Streamlining Healthcare Expo & Business Exchange,
held in Chicago this fall, provided “unprecedented collaboration
opportunities” among healthcare supply chain trading partners. Some 900
participants from healthcare distributors, manufacturers, GPOs, and
health systems took part in more than 1,200 meetings in two and a half
At the event, Mark Hineser, owner of Eco Sound Medical Services, was
installed as 2019 Chairman of the Board of Directors for HIDA. He was
introduced by current Chairman Chris Kerski, Cardinal Health, and will
begin his one-year term Jan. 1.
To strengthen coordination between distributors, manufacturers, and
federal agencies, HIDA brought together representatives from the Office
of the Assistant Secretary for Preparedness and Response (ASPR/HHS),
Food and Drug Administration (FDA), and Office of Public Health
Preparedness and Response (PHPR/CDC). Attendees brainstormed ways to
ensure product availability, particularly during emergencies and
During the “Making the Case for Quality Products” session, health
system supply chain leaders talked with supplier executives about how
they judge quality when it comes to medical products. Despite the
growing focus on outcomes, supply chain leaders said their primary focus
remains on costs and the measures that contribute to costs, such as
patient length of stay.
Participants in the second annual Independent Distributors Summit
observed that keeping product information up-to-date in their systems
and on their websites can be a full-time job. The prospect of investing
in standards, technology, and infrastructure, on top of current product
information management (PIM) needs, seems daunting for many, but can
yield dividends, according to participants.
HIDA released initial results from its 2018 Pricing Accuracy Survey. For
the second straight year, eligibility was the No. 1 chargeback dispute
issue. Findings include:
- More than half of 2017 medical/surgical chargeback disputes were due
to eligibility issues, including minimum order quantities not met,
referenced contracts not yet implemented, customers and/or products not
covered on contract or not yet eligible, or distributors not covered on
contract or authorized.
- Roughly 65 to 85 percent of contract change notifications are
communicated via Excel XLS or CSV file. Respondents reported
year-over-year increases in EDI communications, however.
- In the absence of an industry standard, manufacturers and
distributors transact with multiple customer identifiers. GPO ID is the
most common identifier partners are able to send, followed by the
provider internal customer ID.
- More manufacturers (78 percent in 2017 vs. 70.6 percent in 2016) are
aiming to meet HIDA’s 45-day notification standard to distributors for
contract changes. The majority of notifications are still received in
the 30-to-44-day range, but nearly 20 percent of notifications in 2017
were received with 45 days’ notice or more.
- Distributor respondents reported that more than $13.9 billion in
2017 chargebacks were submitted to manufacturers. The reported initial
denial percentages for these chargebacks ranged between 3.2 percent
(reported by distributors) and 5.0 percent (reported by manufacturers),
but nearly half of all survey respondents don’t know or don’t measure
The GPO Panel featured perspectives from Amy Campbell, senior vice
president, Yankee Alliance; Bryce Hughes, senior vice president, Alliant
Purchasing; and Micah Smith, associate vice president, Provista. Topics
- Self-inflicted errors in contract administration. Customer
eligibility and member rostering remain two practices that could be
improved across the board.
- Owned vs. affiliated designations within health systems and IDNs.
Open and transparent communication between all parties and to IDNs can
help customers understand what is and isn’t covered on their contracts.
- Class-of-trade standards. Calls in the industry persist for standard
definitions of provider customer types and locations. The industry has
yet to standardize who customers are (no single customer identification standard), but this remains a separate issue to classify what customers are, whether within contract language or in reference to tier eligibility.
HIDA’s next Streamlining Healthcare Expo & Business Exchange will take place in Chicago, Illinois, Sept. 23-26, 2019.
Pricing accuracy poll
HIDA conducted a live audience poll at its Streamlining Healthcare
Expo & Business Exchange in Chicago that addressed its initiative to
improve pricing accuracy for trading partners. (Top two responses were
Q: Which do you think is the biggest reason for chargeback denials upon first submission?
- Customer eligibility/incorrect tier: 54 percent.
- Customer identification: 30 percent.
Q: On average, how much time do you personally spend each week resolving pricing discrepancies?
- Minimal to three hours: 42 percent.
- More than 8 hours: 22 percent.
Q: Approximately how much time does your organization need to load pricing from a new contract?
- One week: 42 percent.
- One month: 33 percent.
Q: In the past three years, have overall contract administration / pricing accuracy efforts gotten better, worse, or unchanged?
- Unchanged/No opinion: 65 percent.
- Better: 28 percent.