Becker's Hospital Review

25 EXECUTIVE BRIEFING EXECUTIVE BRIEFING This is helpful, for example, in operating rooms, where circulating nurses often spend considerable time typing information into the EHR from illegible stickers on products. Supply chain data also needs to be integrated into the procurement system so vendors are paid for items used during surgical procedures. Myth: Certain spend categories simply can't be managed Mr. DeLuca described how GHX frequently hears that some spend categories are like the "Wild West" and are impossible to manage. "Or, we hear that small ambulatory surgical centers can't be managed in the same way as an acute care hospital or a community hospital. We don't think those statements are true," he said. GHX's clients show that suppliers and service purchasing activities can be standardized into a single channel. "We see large integrated delivery networks with contract utilization greater than 85%," Mr. DeLuca said. "That tells us purchase activities for supplies or services can be tied to a contract that might be with a regional or a diverse vendor. We're also seeing contract compliance in clients that's greater than 95%. This suggests that price accuracy across the lifecycle of a procure-to-pay transaction can be achieved." In 2019, Navigant Consulting published a study that found U.S. hospitals can save 5-8% on every additional dollar of spend under management, resulting in savings opportunities of around $25.7 billion a year. 1 "Those findings are as relevant today as they were when the study was first published," Mr. DeLuca said. "When we look at those metrics, it really challenges the view that spending can't be managed in healthcare organizations and that contract utilization can't be north of 60%." GHX leverages technology to make high-reliability supply chains a reality Through GHX's recent acquisition of Prodigo Solutions, clients have access to enriched content and validated supply chain data from two leading healthcare data aggregators. 2 This forms the basis of a common data platform that is used across applications like GHX Marketplace (formerly Prodigo Marketplace), GHX's value analysis tools and more. 3 "GHX Marketplace formulary management helps enable healthcare supply chain leaders to control purchasing decisions," Mr. DeLuca said. "Substitute product information from our Value Analysis and Strategic Sourcing solution can be delivered to GHX Marketplace to drive behavior at the point of demand." Procure-to-pay processes start with a purchasing decision. GHX Marketplace's directed buying determines what search results are shown based on the user, and displays preferred product or service options higher in the search results. Consequently, users are directed to a list of items for a specific physician that has been optimized from a cost and quality standpoint. Result sets are unique to groups of users and follow the optimized sourcing playbook for the organization. The concept of bill-only or point-of-use consumption is also very important in healthcare organizations. In the surgical setting, for example, suppliers may bring in items for a patient case — such as implants for a knee surgery — but they don't have a purchase order. The vendors must be paid for what is used, but, there are often times discrepancies between what was documented in the EHR and what gets sent to the ERP for purchase order creation. Reconciliation in the OR at the point of use is critical. As a fellow GHX colleague, Josh Skiba, highlighted in a Becker's presentation he gave last year on the heels of GHX releasing its community-based Consignment Implant Order Automation Guide, solving this big challenge comes with a big impact. • The implantable device market makes up 40-60% of total supply spend. • This market accounted for $98.6 billion in 2022 and is estimated to be $166.3 billion by 2032. • There is an estimated $92 billion in medical implant spend left to automate. The handshake between suppliers and providers at the point of use must become more efficient, and GHX Marketplace's bill-only functionality can help. Thanks to technology, items can be scanned into the solution and integrated to the ERP or the solution can accept a feed from the source EHR rather than manually entered. This reduces documentation errors and enables nurses to get back to the bedside. While health system margins are starting to improve as demand for elective surgeries grows, the broader healthcare environment has changed. Leaders must look at the business aspects of operations like supply chain and financial controls to reduce expenses and drive improvements in patient care. "If you're a health system and you want the best neurologists or the best capital equipment, you have to make money and improve margins," Mr. DeLuca said. "I often use the phrase, 'there's no mission without margin.' CFOs can turn to the business side of healthcare, specifically supply chain, to help their organizations deliver on the mission of patient care." 2 LCR51220V01 1 https://guidehouse.com/news/corporate-news/2019/supply-chain-analysis-2019 2 https://www.ghx.com/news-releases/2023/global-healthcare-exchange-completes-acquisition-of-prodigo-solutions 3 https://www.ghx.com/marketplace

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