Viewing Costs And Care Through A UDI Lens

October 2017

Prime Vendor: Getting the Most from Your Most Important Supplier

By Jeff Girardi
HIDA Director of Industry Affairs

Every year, the AHRMM Annual Conference and Exhibition presents one of healthcare’s best opportunities to learn from and network with leading supply chain executives and materials managers from across the country. Countless examples of providers and suppliers teaming up to achieve various aspects of the triple aim – reducing costs, improving patient care quality, and improving population health outcomes – are occurring every day in our industry, and the event provides attendees focused glimpses into these relationships.

Case Study Yields Unexpected Benefit

I was fascinated by a joint presentation given by Chris Toomes, Acting Vice President of Supply Chain and Sterile Processing Operations, Memorial Hermann Healthcare Systems (MHHS), and Dennis Black, Director of e-Business, BD. The basis of their case study described how MHHS installed BD’s automated, closed inventory management systems for its surgical supply chain in an effort to track and standardize inventory processes across 11 of its locations. This program reduced excess inventory carrying costs, limited returned or “round tripped” supplies, and increased caregiver satisfaction due to ease of using the system and reducing instances of stockouts.

On its own, this success story might easily warrant inclusion on a conference agenda or further examination within this column. But that’s not what interested me so much about the session. Rather, it was the hidden – or at the very least unintended – benefit of MHHS’s ability to have fuller surveillance over its inventory and product barcode data, and how this fits into BD’s ongoing efforts to educate industry partners on complying with the FDA’s Unique Device Identification (UDI) regulation. In fact, Memorial Hermann is now succeeding in leveraging UDI, according to Black.

UDI Ruling

The UDI rule intends to adequately identify medical devices through their distribution and use throughout the supply chain. Medical devices are incredibly diverse and the healthcare supply chain is very complex. Manufacturers and distributors have learned that products deployed through low-unit-of-measure (LUM) or just-in-time (JIT) inventory programs sometimes get removed from UDI-compliant packaging in order to be delivered in smaller quantities. As a result, some products no longer have a full UDI label on the primary packaging for the “each” level and therefore would no longer fully comply with the UDI rule’s intended purpose.

Staying Compliant

It was interesting to note that Memorial Hermann is exploring processes using BD’s inventory management system to enable them to track UDI, even when a portion of the UDI information has been removed due to LUM distribution practices. Manufacturers need a better understanding of LUM/JIT to determine best practices for further UDI implementation that safely supports these programs and the products that will eventually get used on patients. HIDA is working closely with its members, device manufacturers, and the AHRMM UDI Learning Community to collaborate on solutions to further enable UDI for LUM inventory programs.

Collected Data

By going through its conversion, MHHS now has a significant role to play in UDI implementation as the direct contributor toward patient care. Using collected data around specific product characteristics and usage frequency in its JIT program, Toomes and his team can provide their suppliers better insight into the impact that complying with UDI requirements has on patient care. Additionally, their input and reimbursement requirements can help trading partners identify why a certain product rather than another typically gets distributed via LUM/JIT programs.

Black emphasized to attendees that harnessing UDI and data standards can help achieve supply chain efficiencies and clinical improvements beyond the triple aim. For providers looking to further integrate or automate their supply chains, much more value can be realized both internally and for trading partners participating in these initiatives.