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Supply Chain Management Solutions for the EP Lab 

The University of Michigan Cardiovascular Center in Ann Arbor recently implemented a new system for managing inventory. In this interview we speak with Marlon Bird, Supply & Equipment Manager of the Cardiac Procedures Unit, about the transition.

Tell us about your transfer to Owens & Minor’s Clinical Supply Solutions (CSS). When was it implemented? What were your reasons for choosing CSS? Give us some examples of things you hoped would be improved with CSS.

In 2004, the University of Michigan Health System chose to partner with Owens & Minor to use their Clinical Supply Solutions (CSS). CSS, powered by QSight technology, is a clinical supply capture, inventory management, and revenue enhancement service enabled by a proprietary web-based technology platform. We initially began implementation in our Interventional Radiology department. In 2007, we pursued efforts to implement the cardiac cath and EP lab departments. Institutionally we had been seeking out a system solution to assist with managing high-dollar devices, track supplies real-time, and also reduce the negative impact that supplies can contribute to our bottom line. Examples included unnecessary overstocking and the continuous reordering of products with the intent to convert over to newer technology. Both typically result in an increased margin toward overall carrying costs. Therefore, it was important to have the technology available to better manage those items that at one time might expire on the shelf. The consensus was that this web-based platform, known as CSS, would be a positive business value for us here at the University of Michigan.

Explain your position as Supply & Equipment Manager for the Cardiac Procedures Unit at the University of Michigan Cardiovascular Center. What is a typical day like for you? What were the problems you were experiencing with the previous inventory management system?

My position as the Supply & Equipment Manager is to primarily oversee the purchasing and operational details for the EP and cath lab services. A typical day might involve a variety of tasks; periodically it involves acquisition of new capital equipment or reviewing new supply requests to be implemented into our standard inventory. I may also be required in meetings with vendors, or discussions with our contracts department in regards to quotes, proposal, or new pricing. My day could also call for reconciling consignment inventory, but I’ll often work closely with our Inventory Analyst to conduct those reviews.

Many of the challenges we experienced prior to implementing CSS was that we didn’t have a quick option to retrieve detailed information. We’d look to one source to extract purchase history, but we would then have to rely on a different source to identify whether or not a particular product type was consigned. Neither source could provide information as to what we had on hand at the moment, inform us of what would soon expire, nor could we instantly identify a lot number or serial number that might be subject to a product safety alert or recall.

What is the size of your EP lab facility? Approximately how many procedures are performed annually?

We have a total of five EP labs here, one being a Stereotaxis lab. There is a shelled space for one additional lab (6th) when required. Annually we conduct about approximately 2,300–2,400 procedures.

Describe how CSS works and how it was a good fit for the Cardiac Procedures Unit at the University of Michigan Cardiovascular Center. Is CSS merely an inventory management system or does it provide a full service system?

The system offers a massive repository of thousands of products, so we're not required to develop or maintain our own database. In addition, we’re able to scan the original barcodes that are affixed to the majority of products. Our department inventory is essentially a customized profile set up against the CSS repository of products. Familiar product categories include, catheters, cables, introducers, and guidewires.

What we were able to consider at the Cardiovascular Center for both the EP and cath labs was not only the use of CSS as an application, but also consider the use of system interfaces. We decided that it would be significantly beneficial to integrate interface options prior to the system “go-live.” This allowed for the University of Michigan to use the application as a full-service system and not just for inventory management.

The first option was to receive an ADT feed inbound into CSS, which includes patient demographics. This effectively allows for the information to travel across the interface securely and electronically, relieving the staff from a manual entry of this critical patient information (i.e., name, MRN, DOB, age, gender, etc.).

A second interface was a billing interface, which is an outbound file from CSS routed to both of our clinical documenting systems. Currently our EP and cath labs don't utilize the same reporting system, so these were handled as two separate interfaces. For us to understand that the QSight platform (CSS) had flexibility with interface design was an absolute benefit. Each file that travels across each interface provides us with the patient identified, along with every supply captured during that specific procedure.

The final interface was an orders interface to our procurement system (PeopleSoft). Essentially what we’re able to do is send requisitions for supplies from CSS directly to PeopleSoft. This then facilitates the approval for a purchase order and can be communicated to the supplier for replenishment. Having this interface in place continues to allow for entities of our supply chain (i.e., Contracts Department and Value Analysis) to assess our utilization and trends. Collectively we’re able to work together on cost containment and standardization when warranted.

Share insight into your strategy, resources, and technology of how you manage your clinical supply chain now. For example, how do you manage the supply chain of physician preference items?

Our EP lab functions with standardization as one of the top priorities, without compromise of patient care. We have a team of physicians that look to achieve the best patient outcomes. Due to the fact that U of M is an academic health system, we do consider having a diverse complement of inventory. Understand that we exercise every measure possible when it comes to partnering with our suppliers, for cost containment, along with obtaining the most effective products available to care for our patients.

We have a dedicated Inventory Analyst, Gemina Dean, whose primary responsibility is to manage the CSS application and the business surrounding order management, receiving products, and approving payment when necessary. She and our Supply Clerk, Brian Monaghan, work jointly to ensure products are available and in the right place at the appropriate time.

How do you manage inventory, specifically expired, obsolete and recalled products?

One of the requirements in the selection process was to find a system solution with the unique functionality that could assist with these issues more effectively. The QSight platform (CSS) provides to us in real time, an "Alerts Overview" of everything relative to our inventory. It provides a dollar value of the inventory that has expired, inventory that is nearing expiration, in addition to products that have been inactive over a set period of time. The information is readily available, and easily accessible in great detail. We can also view on-hand carrying costs, as it's clearly distinguished between both consigned and non-consigned inventory.

As for phasing products out, we have a couple of different options. One feature is the “hide” feature. When there is supply item that is being replaced, we can decrease our par level to zero while still having a quantity on hand. Once we select the hide function for that item, it can no longer be flagged to be replenished, yet it still remains active on the system. We’re allowed to slowly phase it out by decrementing the supply as it’s used in the lab.

Managing product recalls can trigger a series of events and be quite the challenge in the absence of an effective process. With one of the tracking features within CSS, we have the ability to track a single item by serial number, lot number, and expiration date. So in the event of a recall, we can view our current inventory on hand as well as run a report to review history. If the affected product is identified, we simply scan the product barcode and decrement it from the system and note the transaction record as "Remove Product Recall". From that point, we then can comply to any additional recall instructions provided by the manufacturer.

How do you manage charge capture (for example, did you move from paper to CSS)?

The final step toward our overall automated patient accounting process hasn't been fully implemented. However, we currently have established all the necessary identifiers within CSS to "go-live" with automated billing.

Let me explain: From the onset of our CSS account being established, we provided a data file to Owens & Minor. The data file included various account specific item attributes, one being that of a billing ID, or billing code. For us, this code is reflective of how we initiate charge capture per item. So instead of this information residing in a separate database or reporting system, we can now interject that billing code into one system. Having this comprehensive level of detail eliminates previous challenges when trying to validate cost and knowing whether an item was actually used or whether or not it’s eligible to be charged.

Where and how is inventory stored?

Moving into our new cardiovascular facility during the summer of 2007, we were able to gain the luxury of having our EP supplies centralized. We have two core locations, with numerous supply cabinets for the inventory to reside. Our labs are substocked with a variety of items from each of the two core locations. Due to supplies being in close proximity, we're able to keep the lab inventory lean. As an added security, within each core we have a device closet in which we store our high-dollar implantable devices (i.e., ICDs, pacemakers, leads, etc.). There is a card reader present on the exterior of each of these rooms, so you must have authorization to enter.

Give some examples of how EP lab products are managed using CSS.

We are able to use Clinical Supply Solutions to monitor the status of our high-dollar implantable devices such as ICDs, pacemakers, and leads. No matter if it’s consigned inventory or a purchased product, the system allows us to establish par levels and customize replenishment thresholds by size or model number. The device tracking feature allows us to monitor items by serial number, lot number, and expiration. It’s a tremendous tool, and again this feature can be established by individual product or by product group. So in the event we experience a product alert or recall notice, it’s a simple task to run a report and determine our level of impact. If necessary we can provide precise information to our device clinic for patient follow-up. We can also retrieve reports that assist with our audit process, and validate the release of invoice payments to our vendors.

One other example: Presently we participate with a third party for reprocessing our eligible catheters and cables. Ascent Healthcare Solutions is the vendor that we’ve partnered with. For those products that are returned to us and eligible for use, they are scanned and accounted for to the same standard as an OEM product is. Each item has established pricing, billing codes identified, and replenishment thresholds set.

Discuss your outcomes using CSS. How did switching to CSS affect outcomes, both expected and unexpected?

The expected outcomes post-implementation were just as we anticipated. Recognizing the impact of the clinical and purchasing interfaces immensely enhanced our efficiency. Naturally there was the transition period where all individuals involved had to adjust to the new processes and protocols. CSS is a system solution, and it doesn't function alone. To have individuals in key roles where you can expect compliance, you will only enhance the application's ability to provide you with the pertinent information needed. A few goals we envisioned were to reduce our carrying costs, which we've been able to execute to the note of roughly $210,000. Eliminating the tendencies and the symptoms of overstocking was apparent, but to also reduce (by 50%) the negative impact of products expiring on the shelves is also our target.

Has the CSS system helped in terms of long-term planning?

We truly want to be leaders in all that we do here at the University of Michigan. Our leadership, physicians and administration recognized an urgency that our supply management process needed to evolve. Now having a system solution, we can analyze various data elements more accurately: the review of supply costs per procedure, supply utilization by physicians, expired products, a review of supply charges as it’s related to billing compliance, and even the review of reports relative to loaned and borrowed supplies across departments. We're able to more effectively collaborate within the University of Michigan to further enhance how we each manage supply. All of these factors can prove to be helpful elements in establishing budgetary projections.

Is there anything else you’d like to add?

We absolutely wanted an increased confidence throughout the Cardiac Procedures Unit. The EP lab inventory accounts for millions of dollars in supply expense annually. We needed to continue to work hard, but we also needed to work smarter and establish a higher level of integrity within our supply chain. Our transition from rigorous physical counts using paper sheets and stickers to the use of scanners and barcode technology was an indication that we had arrived. CSS has offered us the optimal support and performance without the capital costs of other solutions.

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