SMI2U Breakout SessionSupply Chain in the Care Continuum

November 7, 2013

Michael Wentling

Chief Solutions Officer, ROi LLC

Agenda

Today vs. Tomorrow

Moving from Traditional to Transformational

– Where are we heading?

– What should we be doing to prepare?

Changing World - Players and Places, Disruptive Forces

Supporting a New Model of Care

Class of Trade Impact?

Facilities Talent

Equipment

▶How many▶Specialized▶Capability

▶What▶Where▶How Much▶Compatibility

▶Hospital▶Some Clinic?

▶Where▶What▶How much▶Compatibility

Material

Revenue Mgmt

▶How much▶How to pay▶Ability to pay

TRADITIONAL: Manages the Patient through the Acute Care Setting

Diagnostic Procedure Recovery Discharge

Information

▶Who▶Condition▶History

EV

EN

TS

MEDICARE: Concentrated Costs

Among fee-for-service Medicare recipients,

1 percent account for 14 percent of spending

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percentage of Beneficiaries Percentage of Beneficiaries

Source: HHN Magazine, November 2012.

14%

24%

17%

26%

14%

5%

Next 5%

Next

15%

Second

Quartile

(25%)

Least

costliest

half

(50%)

Most costly 1%

Next 4%

% of Spending % of Beneficiaries

Beware the Bubble

Predicted Healthcare Spending

A LARGE SOURCE OF REVENUENearly 70% of healthcare execs and other staffers surveyed

expected outpatient care to account for more than 40% of

their hospital / health system’s revenue in five years.

3% 14% 9% 16% 53%5%

% of

annual

revenue Less than

10%10 – 20% 21 – 30% 31 – 40% 41 – 50% More than

50%

Source: Modern Healthcare, April 2012.

Revenue

The Shift is ON!

Era of Choice: enabling new opportunities to grow…

10

DISRUPTIVE: Old Player…New Model

DISRUPTIVE: Old Player…New Model

Era of Choice: enabling new opportunities to grow…

Enrollment of “Network”…

Where do you think the

Healthcare “puck” is

going to be in the future?

What should we be

doing to prepare for it?

Supporting a New Model of Care

Mercy will be a system of care, notjust a collection of destinations.

Home monitoring

Diseasemanagement

Medical Home Convenient orretail care

Day surgery

Endoscopy andoutpatientprocedures

Inpatientcare

ChronicDiseasemanagement

Home care

Traveling nurseor care coordination

Mobile/Electronicaccess

Imaging andother testsin many ofthe care venues

Access to multipletouchpoints of care

Self-directed health management will be supported by the care model.

Supporting a New Model of Care

Facilities Talent

Equipment

▶How many▶Specialized▶Capability

▶What▶Where▶How Much▶Compatibility

▶Home▶Urgent▶Hospital▶Clinic

▶Where▶What▶How much▶Compatibility

Material

Revenue Mgmt

▶How much▶How to pay▶Ability to pay

Pre-Admission Admission Diagnostic Procedure Recovery Discharge

Post-discharge

Home

Information

▶Who▶Condition▶History

PA

TIE

NT

TRANSFORMATION: Considers the Key Performance Variables…

…of the Entire Patient Experience

The Importance of the Supply ChainThe future will require leadership

Physician Office Supply Chain Service Center Patient Home

STEP 2;

Physician

dispenses 1st

dose of

pharmaceutical

and

electronically

scrips the

pharam and

walker.

STEP 4:

Courier is

automatically

dispatched to

the

appropriate

filling center

for pick up

and delivery.

Routine Physician Office Visit – closed loop supply chain

STEP 1:

Physician sees

patient and

determines that

the patients

needs a heart

monitor and

pharmaceutical

s but also

prescribes a

walking assist

device for the

patient.

STEP 3:

Request is

captured at

supply chain

service center.

Fills script for

med, monitor,

and DME and

stages for

transport.

STEP 8:

Courier offers

additional

common need

supplies

which are

stored

onboard.

(Convenience

sales &

support)

STEP 6:

Courier /

technician

delivers

supplies and

assist with

monitor and

walker set-up

and

operations.

Provides

video tapes or

website

guidance for

patient and

family.

Hospital

STEP 9;

Courier Picks up

monitor, bags

and transports to

hospital

STEP 10:

Hospital

decontaminates

device and stages

for return

STEP 11:

Courier picks up clean

monitor, and transports

to central capital depot in

service center

STEP 5:

Courier has

additional

common need

supplies

onboard to

support needs

not identified

in physician

office.

(Convenience

support)

STEP 7:

Courier

instructs

patient on

automatic

refill process

and concierge

service for

refills.

STEP 7a:

Computer

tracks

expected

pharma

usage and

notifies

customer

service of

follow-up call.

STEP 12:

Central service center refills

physician office pharma

dispenser and any other

supplies needed based on

electronic record of need.

New roles

New players

New payers

New points of care

So, are we done here?....

But wait, there’s more…

Source: Lagano, Stephen. “Understanding Class of Trade Concepts.”

PharmaceuticalCommerce.com January 8, 2012.

Class of Trade Terms

Source: Lagano, Stephen. “Understanding Class of Trade Concepts.”

PharmaceuticalCommerce.com January 8, 2012.

Approaches to COT Definition

It is not always

clear how to

address the

application of

COT rules across

actors in the

Supply Chain or

within the same

type of actors.

Issues with Identifying Standard COT Across

Different Stakeholders

Retail & Specialty Pharmacies Stakeholder Perspective Hospital & Clinic Pharmacies

Retail and Specialty Pharmacies are both

categorized with a BAC Code "A" and a

BASC Code "0". DEA

Hospital and Clinic Pharmacies are both

categorized with a BAC Code "B" and a

BASC Code "0".

Consider Retail and Specialty Pharmacies

separate COT based on setting, services

and channel.GPO

Consider Hospitals and Clinic Pharmacies

separate COT based on product

administration, utilization settings and

manufacturer's product strategy.

Depends on the Manufacturer's familiarity

with the pharmacy and the setting,

services, channel.Manufacturer

Function of the product administration,

utilization settings and manufacturer's

product strategy.

Some vendors have created a Specialty

Pharmacy COT in response to emerging needs.Data Vendor

Generally considered Hospital and Clinic

Pharmacies as separate COTs to support the

manufacturer's reporting requirements.

COT terms, applied from different interest angles, lead to different stakeholder approaches

QUESTIONS TO PONDER

What ways are you addressing the alternative points of care?

How do we best manage products delivered to alternative

points of care at different acquisition costs?

What can be done to balance proper COT steps with reality of

shifting care outside the acute setting?

Impact of Class of Trade on Product

in the Supply Chain Continuum?

Other Questions or thoughts?