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Research by Lee Ann Jarousse

Interested in cutting costs and improving patient safety? Visit your organization's supply room or station and take a product from the shelf. Ask your materials management director if the product's origins can be traced. Can the item's contracted price be captured from the packaging bar codes? In a product-recall situation, could all of the affected items throughout your health system be located quickly and accurately?

The likely answer is "No."

Lack of data standards in the health care supply chain make it difficult to track and trace products, creating inefficiencies that raise cost and impact patient safety.

"Today we don't know if a product has been used and on which patient," says Jean Sargent, past president of the Association for Healthcare Resource & Materials Management. "It's a significant patient safety issue." For instance, Sargent says, data standards will streamline the recall process. Organizations will be able to identify and trace recalled products and remove them promptly. In the case of certain medical devices, hospitals will be able to track which patient received a recalled product and proceed accordingly.

Bar-code technology has been in place for more than 35 years, but health care has resisted adopting it. "I came to health care seven years ago and was shocked that we couldn't use bar codes on products," says Brent Johnson, vice president of supply chain and imaging services and chief purchasing officer at Intermountain Healthcare, Salt Lake City. "The health care supply chain is complex and costly. The No. 1 problem is not being able to use data standards and product identification information."

One of the challenges has been a lack of perceived value in standards adoption. That's changing. "Hospitals now see clearly the need for data standardization," says Siobhan O'Bara, vice president of health care for GS1 Healthcare U.S. in Lawrenceville, N.J. "The need is even greater under health reform. It's driving the demand for standardization higher and higher." Data standards will help to ensure that hospitals get the right product in the right quantity to the right place at the right time and at the right (or contracted) price.

The onus is on providers. "We haven't demanded standards adoption and we have a credibility issue with the use of supply chain information," says Vance Moore, senior vice president of operations for Sisters of Mercy Health System in Chesterfield, Mo. Sisters of Mercy, along with Geisinger Health System, Intermountain Healthcare, Kaiser Permanente and the Mayo Clinic formed a collaboration in 2010 called the Healthcare Transformation Group that seeks to facilitate the adoption and implementation of GS1 Standards. GS1 is a voluntary, global standards group that brings together all relevant stakeholders, including hospitals, manufacturers, distributors and group purchasing organizations.

Hospitals may need to update their materials management information systems and enterprise resource planning systems to be able to accept and use supply chain standards. Most newer systems already have the capabilities. Joseph Dudas, vice chair of supply chain management at the Mayo Clinic, Rochester, Minn., says two things will drive standards adoption: the desire to improve patient safety and regulations that demand it. The Food and Drug Administration is poised to roll out a unique device identification system for medical devices. "If organizations are not mobilizing and preparing now to adopt these standards, the cost to implement quickly will increase," says O'Bara. "The requirement to do this is coming."

Dudas urges CEOs to challenge supply chain leaders to spur adoption. "Every dollar saved in the supply chain goes right to the bottom line," he notes. "CEOs need to recognize the importance of the supply chain and treat it as a strategic function. They need to ask hard questions of supply chain leaders and set aggressive goals."

About the standards

It's crucial that health care organizations be able to communicate product and location information with their supply chain partners and vice versa. The GS1 system facilitates communication by providing a common language and identifiers for information about products, assets, locations and services.

Global Location Number (GLN)

The GLN is a global, unique 13-digit number for locations and supply chain parties. It is linked to the organization's name, address and class of trade. It can identify a functional entity, such as a hospital purchasing department or pharmacy; a legal entity, such as a hospital; or a physical entity, such as a nursing station or loading dock.

Global Trade Item Number (GTIN)

The GTIN is a global, unique 14-digit number used to identify trade items — products and services that may be priced, ordered or invoiced during the supply chain process. The GTIN is assigned by the brand owner of the product and is used to identify the product as it moves through the supply chain.

Global Data Synchronization Network (GDSN)

The GDSN is a network of interoperable data polls and a global registry — the GS1 Global Registry — that allows the accurate, timely transmission of data from a primary source to the final recipient of the data. The GDSN provides continuous, automated access and ensures that accurate supply chain information is available among trading partners.

GLN Registry for Healthcare

The GLN Registry for Healthcare provides a comprehensive list of organizations and their corresponding GLNs and GLN information. The subscription-based service provides up-to-date information about providers, manufacturers, distributors, retailers, pharmacies, etc.

10 key steps to standardization

Below are key steps for Global Location Number adoption. Similar processes are required for the adoption of Global Trade Item Numbers.

1 | Establish a GLN Registry Advisory group

The shift to data standardization in the supply chain requires multidisciplinary support. The advisory group should consist of representatives from the supply chain, accounts payable, information systems and legal counsel. It also should include representatives from the GPO and primary distributor.

2 | Establish a GLN registry operational team

The operational team should consist of two members: a so-called "approver" and an editor. The approver oversees the management and ongoing maintenance of the GLN Registry for Healthcare. The editor helps the approver to maintain records, primarily through creating, editing and deactivating locations. In addition to the approver and editor, some individuals may have viewer status that provides them access to the registry.

3 | Communicate the adoption plan

Work with internal communications to inform employees about the importance of data standardization and the organization's shift to GLN standards. Inform the organization's supplier community about the transition to GLN.

4 | Educate the advisory group and operational team

All participants should have a basic knowledge of GLNs, the GLN Registry and GS1.

5 | Assess and update IS systems

Conduct a readiness assessment of IS systems and make necessary upgrades. IS systems should be evaluated for readiness.

6 | Develop an implementation strategy

This process will require a review of current and future supply chain practices to identify, among other things, the extent of locations the GLN numbering system will need for support operations, such as billing and delivery location.

7 | Create a GLN database

This step will create an organizational hierarchy in the GLN Registry.

8 | Engage suppliers

At this stage, it's time to notify suppliers of the organization's plans, determine suppliers' readiness and to identify partners to test standards transactions.

9 | Test standards transactions

Conduct tests with suppliers to exchange purchase transactions prior to actual go-live.

10 | Make necessary adjustments to the implementation plan

Following the testing stage, it's time to review the results and make needed adjustments to the program.

Source: Healthcare Provider Tool Kit: Global Location Number, GS1 Healthcare U.S., March 2012

How We Did It:

This gatefold was produced by researching published studies and articles and conducting interviews with hospital and industry executives.

Research: Lee Ann Jarousse,

Design: Chuck Lazar,