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Executive Summary

The Impact of Supply Chain Transformation in Health Systems: Alberta Health Services, Canada National Health Service, England Mercy Health, U.S. Dr. Anne Snowdon RN, BScN, MSc, PhD, FAAN Chair, World Health Innovation Network Scientific Director & CEO, Supply Chain Advancement Network in Health Odette School of Business University of Windsor


Executive Summary Introduction Medical error is now the third leading cause of death in Canada, the United Kingdom and the United States. Health system level measurement of patient outcomes, linked to product use and care procedures, does not exist in health systems today. To date, the empirical evidence of the impact of supply chain implementation in health systems is very limited. The World Health Innovation Network (WIN) conducted these case studies to examine supply chain infrastructure in health systems with the goal of mobilizing knowledge and evidence of impact across jurisdictions. Case studies were undertaken in three health systems: 1. Alberta Health Services (AHS), Canada 2. National Health Service (NHS), England 3. Mercy Health (Mercy), U.S. These case studies create the first empirical evidence of the system level impact of implementing supply chain traceability based on GS1 global standards. The selection of these three jurisdictions was based on the presence of a system level approach to implementing supply chain infrastructure in clinical settings across the entire health system. The case studies examine the implementation strategies, emerging impact and return on investment of adopting supply chain processes to strengthen health system performance. The Alberta and NHS case studies offer an analysis of supply chain implementation within publicly funded health systems, in contrast to the supply chain strategy at Mercy, a privatized health system. The case study data was derived from observations, public health system reports, financial data, online publications and key informant interviews. Findings highlight drivers of change, evidence of return on investment and the outcome and impact achieved through the transformation of health system supply chain in each health system.

Supply Chain Implementation Strategies In Alberta, the move toward a centralized health system governance structure provided a unique opportunity to accelerate supply chain integration. Consolidation into a single provincial health service infrastructure supported investment in a province-wide supply chain strategy. Significant potential cost-savings, achieved by transforming the supply chain in Alberta were identified as an opportunity by consultants, at the time of the consolidation. The NHS strategy was motivated by significant patient safety challenges, specifically horsemeat contamination in the food supply, and the breast implant recall for 30,000 women in the U.K. Secretary of State, Jeremy Hunt, made it a priority to leverage supply chain infrastructure to improve patient safety across the NHS system. In


contrast, Mercy was under significant financial pressure due to rising healthcare delivery costs, and declining reimbursement levels from insurance providers such as Medicare and Medicaid. Mercy’s business strategy focused on reducing expenditures, while improving quality of care, by transforming their supply chain infrastructure to track and trace every product, patient and provider to identify accurate case costing and to minimize waste in high-cost surgical programs. Alberta and NHS health systems adopted GS1 global standards as the foundation for their supply chain infrastructure. Mercy included both GS1 and Health Industry Bar Code (HIBC) standards aligned with the Federal Drug Administration (FDA) policy. Initial use cases focused on recall and traceability in their supply chain strategies with the future goal of integrating supply chain traceability and clinical care through point of care scanning1, an ambition not yet achieved by any health system. Each region implemented a unique strategy to attain their goals.

Alberta Health System, Canada Four Phase Strategy: 1. Implementation of a province-wide Enterprise Resource Management Program (ERP); 2. Price harmonization, clinical engagement and new procurement strategy; 3. The creation of a province-wide product item master; and adverse event reporting system; and 4. Integration of supply chain and clinical expertise. Alberta’s current focus is on data accuracy and capturing data on what products are used during care processes as a foundation for traceability of product use from manufacturer to patient outcomes.

National Health Service, England The NHS structured a franchise model, based on system-level adoption of GS1 global and Pan European Product Procurement Online (PEPPOL) standards. Implementation is being driven through the NHS eProcurement Strategy – Scan4Safety. Six demonstrator sites were selected as beta sites to fast-track implementation and create opportunities for learning. Each hospital trust is guided by the Scan-4-Safety strategy based on three enablers and three use cases. The three enablers include patient identification, product identification, global trade item number (GTIN), and location (individual room) global location number (GLN) identification. The use cases that must be demonstrated include: inventory management, automated replenishment and product recall, in order for funding 1

Point of care scanning is the scanning of patients, medical devices, locations, clinicians and procedures.


to flow to each demonstration site. To date, they have implemented point of care scanning in surgical theatres with plans to scale to all clinical areas. Phase 2 implementation to another 25 hospital trusts is expected to commence in spring 2018.

Mercy Health, U.S. Mercy began with a Unique Device Identification (UDI) Strategy that included three aims: point of care scanning, product scanning, inventory management and automated charge capture. Mercy initiated implementation in the high-cost, highest risk areas beginning with perioperative programs in three sites in the 45 hospitals in Mercy. Savings achieved through implementation in the perioperative program is anticipated to support scalability of the supply chain initiative across the entire Mercy system.

Findings Return on Investment (ROI) and Impact of a Supply Chain Strategy: All three cases identified the need for both executive leadership and supply chain champions to drive implementation. In Alberta and the NHS, large-scale change was driven by senior levels of government and implementation strategies were championed by individuals with an understanding of the opportunity and impact that supply chain transformation could achieve. Mercy, in the U.S., was driven by the strong mandate of a CEO who believed in the significant value of supply chain transformation.

Inventory Savings: Although patient safety was one of the primary drivers for implementation in each health system, the economic impact and ability to significantly reduce costs generated momentum and significant support for implementation. To date, Alberta and NHS have realized significant inventory savings ranging from a 4:1 to 8:1 return on investment. Mercy has reported cost savings of over $1 billion as a direct outcome of optimizing and transforming supply chain processes across the system.

Clinical Time: Each organization reported that there were significant labour cost savings achieved by supply chain automation. Automation of the supply chain reduced the time required by clinicians to manage supply processes and shifted clinician time back to patient care. At this time, all three systems have not yet measured the clinician time saved to date.

Integration: The importance of supply chain integration into clinical programs was highlighted by participants as one of the most important requirements for success. Clinicians bring expertise and insight to decisions about product choice and value for patient outcomes. The supply chain team bring expertise in inventory management to clinicians to ensure the right product is available for procedures, waste is reduced and implementation of the barcode scanning is supported when products do not successfully scan. The supply chain team’s integration with the clinical p r og r am was highly successful in engaging clinicians in product procurement decisions to ensure only the safest products are used in patient care to achieve the greatest value for patients.


Conclusion In all three cases, there was a very strong leadership mandate to transform supply chain infrastructure to advance safety and financial sustainability. In Alberta and NHS, this was driven by a strong safety agenda, and in Mercy, by a need to overcome declining revenue and enhance value for patients. In every case, the inventory management expertise and data processes were automated and highly integrated into patient care processes. The initial phases of implementation of the strategy focused on surgical settings given the potential for savings.

Produced by: Dr. Anne Snowdon, Academic Chair, World Health Innovation Network, and Scientific Director & CEO, Supply Chain Advancement Network in Health, Odette School of Business, University of Windsor Original release date: February 2018 World Health Innovation Network T: 519.253.3000 x6336 E: Windsor, Ontario

Final for release win case study summary feb14 1007am  
Final for release win case study summary feb14 1007am