Summate Velocity™: Redefining the Ortho ASC Customer/Vendor Commercial Contract
The digital age has shown that good data is the most critical component of running an efficient business. The retail industry has ruthlessly leveraged data and data feedback loops to improve acquisition cost and streamline delivery for their customers. Retail consumers have used the internet as a primary data tool to increase selection and enable better value assessment for the goods and services they consume.
The lesson learned is that better data is the key for both sides to any commercial exchange for both buyer and seller, but that the buyer or customer has been the biggest winner.
One industry market largely left behind by the data revolution is the surgical and medical device industry. Field inventory management of medical devices is often typified by opaque demand data signals from the point of use (the operating room), which is a unique environment primarily because of product usage inside the sterile field and patient record software support environment which is siloed to protect patient privacy. Product documentation, which is the first and necessary link in supply chain efficiency that leverages modern tools of digital data analysis, is commonly comprised of multiple manual error prone steps – pens, paper, emails, sticky notes, and multiple manual data entry steps. The process has resulted in inventory data opacity and management challenges not only for healthcare providers but also device manufacturers and their distributors. The root of the problem is manual documentation at the start of the replenish/replace process.
Manually derived demand data in a supply chain means error, error means friction, and friction equals cost, both for seller and buyer.
This supply chain inefficiency pain is particularly felt by for-profit ambulatory surgery centers (ASCs), which have lower re-imbursements, tighter personnel resources, and stricter budgetary constraints than acute care hospital surgery theatres. To control costs, ASCs (and often hospitals) have relied increasingly on “consigned inventory” for the medical devices they use in surgery. ASCs in particular hold as little inventory as possible and rely on “just in time” delivery for their devices as requested (with short advance notice) by surgeons.
Drivers of poor Ortho ASC data/operational inefficiency
The short notice of incoming devices to be used in surgery has a negative impact on ASC data quality and operational efficiency. Random, ad hoc delivery of devices often requires case cost discovery and analysis for each individual surgery. This manual process is time consuming for supply chain support staff and makes increasing surgical volumes difficult. Random device usage patterns also retard master item list development, a key component of controlling costs and measuring and predicting fiscal outcomes of surgical cases.
Another factor challenging good Ortho ASC data development is outsourcing of case documentation control to the device companies and device reps. The industry standard for orthopedic surgeries is to have the sales rep provide important case support, including tracking what is used during the procedure. The ASC often gets a hand-written record of device usage, or the device rep uses their own app on a tablet or phone to record usage. At the worst the ASC is handed sheets of line items to be manually entered into both the patient record and the account business software, at best, even with integration of apps the account still is forfeiting a very important part of the customer/vendor Commercial Contract: customer control over what was consumed and advance knowledge of cost. Imagine sending someone into Neiman Marcus with your credit card and only finding out what the bill was at the register. It would be a non-starter.
Better Data through Point of Use Scanning and Documentation Control
A chain is only as good as its weakest link. By ceding control of documentation (the first part of the supply chain) the Ortho ASC is forced to play catch up for the rest of the supply chain and business cycle management process. Manual documentation (by a rep or by a nurse) opens the door to error, and documentation errors in their many forms (wrong price, wrong item, missed items, extra items) are not only costly due to the expensive nature of orthopedic implants, but also create time consuming and resource draining rectification process steps downstream that extend the revenue cycle and drive up operational cost.
The retail industry largely solved these problems, and created superior efficiency through better operational data, by investing in Point of Sale systems that utilize documentation automation (barcode scanning) and settlement of the business transaction at point of consumption. Scanned, accurately priced digitized demand data flows through the supply chain and provides analytical tools to optimize operational efficiency and cost control rigor.
Summate Velocity and the Trakker brings point-of-sale (point of use) scanning and documentation automation to the ortho ASC for the first time
Summate Velocity is a cloud-based software solution that operates in the OR via the Trakker, a small footprint touchscreen cart that runs at the edge of the sterile field. Velocity runs on enriched and optimized ASC master price list data for all account vendors. It provides non-master item UDI documentation via label imaging (Symmetric Health Solutions, Philadelphia, PA) for sterile products, and OrthoIndexing™ for simplified and more accurate ortho plate and screw documentation. Velocity pointedly does NOT collect any sensitive patient demographic PHI data, and Velocity’s scanning/input can be operated by a nurse or device representative, so it works seamlessly with all vendors within current workflows. It captures ALL OR costs (even non- implant items), including variable labor costs associated with supporting surgery.
Capturing labor and total material cost of each case, Velocity accepts CPT code re-imbursement input post-surgery by business staff and delivers the holy grail of surgical operations management analytics: profit per each case. All in real time. One process, one central point of use, one point of control which uses better data to capture data better: Velocity puts control and total business intelligence data capture where it belongs: with the ASC customer.
Running on Velocity, the Trakker is effectively a cash register for your ASC, delivering all the downstream hard dollar benefits afforded by accurate, scanned, digitized data.
The Velocity Master Surgical Data file is the source of real-time operations data that feeds analysis and reports, including 1) surgeon scorecards that report all labor, materials, and profit metrics per case, surgeon, and surgical discipline; 2) comprehensive online bill only management 3) account-specific master item file construction to ensure accurate pricing. This business intelligence enables an ASC to manage and increase profit, reduce cost, and automate manual business processes to enable growth, streamline or eliminate manual support steps, shorten revenue cycles, and provide business continuity of their operations processes.
Less Rep, not Rep-less: Velocity Benefits to Device OEMs and Distributors
At a high level, Velocity also helps cure the pervasive problem of mis-aligned incentives that motivate the commissioned sales rep verse what motivates the customer. However, there will ALWAYS be a need for good device vendor sales representation for support and to ensure cases run smoothly. However, by removing the necessity for device rep presence during entire routine cases, Velocity can guarantee smoother transitions from rep turnover for both device OEM and the ASC. Point of use documentation (analogous to point of sale in retail) benefits ALL participants in the medical device supply chain ecosystem.
Velocity’s non-PHI supply chain and inventory data can also be provided to the distributors and vendors, providing very valuable field inventory business intelligence to drive cost savings through better field inventory allocation/management and real time marketing and customer survey data. The monetary value of this data can be realized by the ASC via reducing the cost of Velocity for each vendor added to the service by the ASC.
Summate Velocity is a win-win win for ASCs, their distributors, and OEM device partners.