UPS poised to upgrade medical supply chains
In the future, health care networks might contract with commercial shipping firms for a lot more than dropping off supplies at the door. New partnerships might find shippers assigning supply and drug charges to patients’ bills as well as tracking utilization by DRG. And that future might only be a year or two away if UPS World Wide Logistics (UPS WWL) has anything to do with it.
It’s no secret that health care lags behind other industries in integrating our supply chain information systems and inventory management through dispensing and billing products to end users.
Breakdowns keep materials managers busy with firefighting, notes Harvey Rickles, senior director of the Health Group for Atlanta-based UPS WWL, a subsidiary of United Parcel Service of America (UPS). He explains that a UPS WWL system would not replace materials management staff. Rather, he continues, "We think it could place them in strategic roles for contracting and lowering costs."
Here are some characteristics of the system:
o Goodbye to stickers.
A UPS WWL system would introduce a model (integrated health care delivery networks or IDNs) similar to retail stores. For example, grocery stores keep on hand 24-hour to 48-hour inventories of produce.
Such a model would mean that instead of providers hunting supplies and collecting 20 to 30 stickers per shift for later entry on patient bills, they would carry scanners. The devices would transmit dispensing information to patient records, as well as electronic accounting and clinical and inventory management systems.
(For point-by-point comparison of the conventional and supply chains, see the diagrams, "Present IDN Supply Chain" and "New IDN Supply Chain," p. 20.)
o Tailored to fit.
The UPS WWL system is customized to interface with an IDN’s computer system. The proprietary software package can hook up admissions to point of use, as well as other parts of the information management system. UPS WWL supplies the technicians to get the interface up and running. The firm also trains the health care staff to use the system.
o Packed with features.
Some features include feedback on cycle times of materials and supply flow through the system, supply utilization by DRG reports, real-time information for billing and inventory replenishment, and activity-based cost reports.
o How much, how long?
Stage 1 takes eight to 12 months (conversion of in-house supply chain operations, computer set-up, staff training). Stage 2 takes eight to 12 months (refinements). Costs vary according to the nature of the IDN, although Rickles says they are covered by savings generated.
o Judgment calls.
Implementation time is lengthy. But, all told, would it actually exceed the time line for modernizing a supply chain? Prospective clients will also need to judge whether or not it’s to their advantage to be pioneer users of a commercial supply chain management system.
When Rickles spoke with QI/TQM, the service, launched in August 1998, had no clients. How ever, spokespersons from two other leading commercial shippers, FedEx and RPS, told QI/TQM their companies currently have no services comparable to UPS WWL.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content