Third-party Payer Contracting
Now Reflects the True Service Costs
Columbia/HCA streamlines inventory maintenance
to aid disease-basis cost tracking and improve patient billing
The time and money savings in the inventory process from bar code
use is well-documented, but the healthcare industry is now using
it for a new benefit-to actually improve care.
It's because the healthcare industry is now capitating costs,
charging a specific overall price for each procedure or treatment
program rather than breaking down costs into various departmental
"silos." The new practice helps providers estimate more narrowly
the costs of their services so they can contract more efficiently
with third-party payers, and it also serves as a goal to assure
the most cost-effective use of healthcare resources.
Part of this effort can be seen in "per diem" billing, where
hospital patients are charged an overall daily rate rather than
for every piece of equipment used, says Scott Heath, the internal
control manager at the Virginia facilities of Columbia/HCA, the
giant hospital chain. Columbia, he says, is doing its part by
using bar codes to move toward a "stickerless" inventory system
that will greatly streamline inventory maintenance and improve
current patient billing practices.
Today's methods evolve into per-diem payments
Today, Health notes, the bar code system is used to allot and bill
individual use charges to specific patient accounts. However, he
adds, "as we as a system and as a nation move to a per-diem payment
system of inpatient care, this bar code system will remain important.
It helps us to capture data on our supply usage and apportion it
to specific diseases, so we can find out the actual costs of various
conditions and better determine what our amounts should be for contracting
to treat disease. And we can see how use of supplies changes as
the disease progresses over time," allowing clinicians to get a
better idea of actual care outcomes from monitoring how material
is used.
The Stickerless Material Management System, from Compsee, is
the heart of Columbia's purchasing system, according to Randall
Skinner, manager of distributed EDI and interfaces for the Columbia/HCA
hospital chain. The new stickerless system is "integral to the
purchasing system," called SMART (for Supply Management and Resource
Tracking) which is now used in more than 300 Columbia hospitals.
'Up to par' wasn't
In the former system, purchasing was done with manual accounting
and inventory. Labels with an item SKU number were produced manually,
then pulled off a page and put on a product. A nurse dispensing
a product would pull a numbered label off and put it on a patient
record, also identified with an alphanumeric code. All of the label's
data was manually keyed in at the end of the day for billing. For
inventory, "par" sheets indicated each supply's required amount,
literally "keeping inventory up to par." Once a day, a purchasing
staffer took inventory manually, key-entering the new items needed
to fulfill par. That involved a lot of time, a lot of manual labor-and
a lot of potential for inaccuracy.
Some six and a half years ago, "we decided to automate," says
Skinner. "We had an opportunity to cut out a lot of paperwork
and keyboard entering. There were several thousand entries, including
item number and quantity, that could be automated." Planning and
design of the program took nine months.
Point-of-capture changes
The stickerless system chosen by the healthcare giant allowed it
to transfer inventory capture from the storeroom to the individual
departments. Today, a nurse with a Mars Electronics MEQ 430 hand-held
terminal/scanner goes into the supply room of each department and
scans a "bedboard" coded for each patient location to indicate the
recipient patient. The nurse then scans the bar code for the product
to be dispensed, located on the shelf or bin where it is kept, and
key-inputs a quantity. The bar code symbology used is Code 128,
chosen because it takes up less room than other symbologies on a
shelf. "It is all on the honor system," says Skinner, "so it is
mostly a productivity tool rather than a security system."
Once a day, a material manager, now foregoing his clip board,
picks up a hand-held terminal and puts it into a cradle, downloading
to a PC in the purchasing department. All the hand-held terminals
are optically downloaded via a daisy chain, allowing multiple
locations to be serviced from a single port via cable.
Columbia/HCA's SMART system can access this data from the PC
and use it to do physical inventory as well as allow items to
be billed to the specific patient. In the SMART operation, there
was no need to redo the original logic to accommodate the bar
code system - "We just took what worked already and substituted
the bar coding for the keyboarding," says Skinner.
Versatility
By design, the new system can run on a variety of Windows 95-based
PCs, making it flexible enough for use by the diverse systems of
Columbia's many hospitals. "We tried to make it flexible to use
with existing PCs," says Skinner, thus saving the chain money.
Such flexibility, in recognition of Columbia's behemoth status
as a hospital chain, is vital.
In this regard, "the devil is in the details," says Skinner.
For instance, the inventory interface to the SMART purchasing
system was written generically, so the inventory system could
interface with the variety of other vendors' purchasing systems
used in other Columbia hospitals.
Because some hospitals also had automated point-of-issue (POI)
supply systems, there are three different POI systems that can
be interfaced to the SMART purchasing system. But even with all
these interface possibilities for SMART, says Skinner, "[the]
stickerless material management system is our biggest interface."
SMART now can have functions such as patient charges, purchase
orders and replenishment requests, as well as an annual inventory,
recorded with little or no key entry. "Our need to do away with
one paper par form has given us a lot of value: automatic savings
in accuracy and labor," says Skinner.
Columbia's need for flexibility is exemplified by this fact:
one of its hospitals has 10,000 transactions a week and uses up
to 40 hand helds. Other, smaller facilities can make do with only
two hand helds by having them operated by purchasing staff while
taking inventory rather than by nurses when dispensing.
It's still ticking
In addition to flexibility, the chain had many other needs in its
inventory system. "Our major need was for a system that was robust,
difficult to break," says Skinner. They found the hand-held terminals
from Mars met this need. "I've actually dropped one of these down
the stairs, picked it up, and it kept on ticking," says Skinner.
The second requirement: a forgiving nature that would allow
the unit to be downloaded without "following the Ten Commandments,"
says Skinner. "Ours is not a friendly environment, and the nurses
are there for patient care, not inventory, so they want it to
be fast and easy." The hand-held terminals are downloaded into
a Mars 1260 cradle using only an infrared beam, eliminating the
metallic used by many others
Basic advantages
The third advantage, says Skinner, is that the system uses Basic
programming. "I designed the software, and we paid Compsee to write
the program," says Skinner. "I have a father's pride in it. " Using
Basic expands the range of potential programmers for any program
tailoring needed. Software for the PC can be obtained by the hospitals
via the Columbia intranet on its hand-held terminal site.
Technical problems with the pilot were minor: cable systems
done by local contractors didn't work. People problems included
a need for continuing training because operations less frequently
performed are forgotten and staff may not even realize they are
possible. Plus, user resentment may keep it out of some hospitals.
Five years ago, only four Columbia hospitals used this hand-held
terminal inventory system, and today there are 33, with a dozen
more now implementing it. Since Columbia now has 342 hospitals,
there is a 10% penetration of the automatic inventory system.
It is an individual decision by the hospital, says Skinner, and
the nursing director and hospital administrator have to support
that decision. Indeed, one of the biggest installations is in
the Richmond, VA, market, in a hospital run by a nurse. "When
the boss is a nurse, the system works," says Skinner.
David Catino, Columbia/HCA's Manager of supply chain development
says that the hospital giant is investigating ways to use bar
codes more extensively "all the way down to the 'eaches'. It's
similar to retail," he says, "where bar codes are used in conjunction
with point of sale to drive replenishment." Obviously, using ADC
at the point of issue will soon impact all the hospitals, and
with them, patient point of care.
Written by:
Synth Greenwald, Contributing Editor
Reprinted from:
Healthcare Automation Magazine
Advanstar Publishing
May/June 1998
Quote
"IT just makes sense. We need to automate what is a intensively
laabor-driven procedure that generates so much paperwork. And
most major buyers in other industries require them.
Don Workman
Vice President of Operations Improvement
Columbia/HCA
Vital Statistics
| USER: |
Columbia/HCA |
| APPLICATION: |
Material management |
| TECHNOLOGY: |
Bar code scanning |
| OUTCOME: |
* Accuracy, labor savings, flexibility.
* Cost-effective resource use
* Efficient third-party contracting.
* Programming in Basic allows expanded programming capabilities.
* Improved patient care.
* Reduced paperwork.
|
