More visibility for its implant device purchases helps Northwestern Medicine eliminate waste.
By Daniel Beaird
December 2023- The Journal of Healthcare Contracting
Some one in 10 Americans will have a medical device implanted into their bodies at some point in their lifetimes, according to the American Medical Association. But one size does not fit all for implant devices.
So, health systems are unable to stock patient-specific implants because most patients require implants specifically suited for them, making procuring and paying for patient-specific implants burdensome.
The process is referred to as “Bill-Only.” But what does the Bill-Only process mean to a health system’s bottom line?
“I think a lot of people’s first question would be ‘what are Bill-Only’s,’” said Alisha Beringer, director of supply chain for Northwestern Medicine. “I call it invisible dollars. It’s such a pain point on the hospital side. But when you tell people how much health systems can spend in product brought in by vendors, it’s staggering how much money can flow through a system without visibility or tracking.”
Northwestern Medicine and Casechek partner to co-develop a solution
It’s a topic that Beringer, Northwestern Medicine and Casechek are trying to get more people to pay attention to in healthcare.
Northwestern Medicine and Casechek were named the recipients of the 2023 SMI Tom Hughes Collaboration Award, recognizing exceptional efforts of industry thought leaders collaborating to bring innovation, discovery and improvements to the healthcare supply chain for their partnership to co-develop a solution to the industry-wide challenge of processing and managing Bill-Only payments. Northwestern Medicine and Casechek worked together to uncover and solve root problems through data analysis, user interviews and process mapping.
Casechek’s platform automates workflows for all of a health system’s vendor-supported procedures. It targets the implant supply chain with the same automation as stock supplies. With over 2 million surgical cases managed, it has a 97% average rep process compliance with an 80% reduction of manual labor during the process.
By specializing in healthcare’s complex implant supply chain, Casechek tackles Bill-Only challenges. Selecting the correct implant for a patient requires numerous considerations by the surgeon based on their clinical judgement, training and experience. Surgeons often prefer specific brands or models of implants based on factors like clinical outcomes, longevity and ease of use.
Surgeon-driven implants can lead to higher costs and variation. A health system supply chain team can work with surgeons to accommodate their preferences while also valuing cost, standardization and patient safety. But procuring implants can be left to the vendor and surgeon, which leaves little oversight of implants for the hospital and supply chain.
Casechek developed the solution for Northwestern Medicine after approaching Northwestern Medicine to help solve its Bill-Only problems. They wanted to build a tool for a customer, with a customer.
“That was music to my ears,” Beringer said. “Casechek was willing to give us the resources and look at all of our data in its current state. They wanted to understand us and build a certain tool for us. We said absolutely.”
Digging into the data, building the platform and going live
The COVID-19 pandemic hit soon after Northwestern Medicine started the process, but they didn’t stop.
“Procedures were down because of COVID-19, so people had more time on projects,” Beringer said.
Casechek gave Northwestern Medicine a team of people and spent time with all of the positions and departments involved in Northwestern’s Bill-Only process to help build a baseline. They dug into the data and led the conversations between IT and the stakeholders.
“Casechek led the meetings, the project planning and the follow up with support from our team,” Beringer said. “That was a huge win.”
Supply disruptions slowed the implementation, but Northwestern Medicine went live with Casechek in January 2022 after using much of 2020 and 2021 digging into data and building the platform. The health system wanted it built so that data from the initial usage would lead them to improve.
Beringer said they wanted the data to answer key questions like:
- Is there a mismatch of data internally?
- Is there documenting during cases?
- Is the vendor putting wrong information in bills to begin with?
“In 2021, our baseline was 8% in what we were seeing in our purchase order spend that wasn’t in the EHR,” she said. “We’re now down to 0.25%.”
Some examples of savings include reusable products or products that can be sterilized multiple times but were being used one time. The amount of fees to vendors – to cancel a case or to use an item a vendor brings in, for example –
are also tracked.
“We started asking how much money we are paying in fees,” Beringer said. “Are they contracted? Are we paying the right price? Those are visible costs we don’t document in EHR. Vendors could add a fee and we didn’t question it, we would just pay it. But now we have this tool, the visibility and the data.”
On average, Casechek says it finds $8.5 million in potential savings and errors from items undocumented in the EMR, unnecessary vendor fees and excessive ordering of reusable accessory items.
Casechek is consistently pushing Northwestern toward opportunities, Beringer explained. If a clinician is using a reusable item and spending a certain amount, for example, the health system should go back to that vendor and find a credit or rebate.
Getting vendors on the same page
Plus, auditing and processing Bill-Only purchasing requests is time consuming and error prone. Since vendor bills are received after the surgery, the bill and purchase orders must be reconciled against the hospital’s EMR and ERP. Managing that process is complex and manual for most hospitals.
Beringer said there was nothing in previous contract language limiting a vendor from submitting bills six months after a case. Northwestern Medicine posts charges within a certain number of days. If a vendor submitted after that time period, it created more work for staff and it wasn’t charged if it wasn’t in the EHR. Now, those downstream impacts can be addressed directly with vendors.
Northwestern Medicine has conversations with vendors about expectations and policies. If their reps are not serving Northwestern Medicine well financially or in time spent, they may not be invited to support cases any longer.
“Casechek already had vendor relationships, which was big,” she said. “A lot of our implant vendors already knew Casechek because of their other procurement platform and they were already set up with it. And we already had some interfaces with Epic because of that platform, so it didn’t seem like we were starting from ground zero. There were some big wins by partnering with them.”
The Bill-Only solution has expanded to other IDNs. To ensure it delivered value to both IDNs and suppliers, Casechek and Northwestern Medicine requested feedback from executives at over 25 IDNs and over 10 device suppliers. The automated solution has significantly impacted the Bill-Only process and led to several cost-related improvements aligning clinical and financial data.
Sidebar:
SMI announces Northwestern Medicine and Casechek as 2023 Tom Hughes Collaboration Award Recipients
SMI, a nonprofit, member-driven community of healthcare provider and industry partner organizations, awarded Northwestern Medicine and Casechek as the recipients of the 2023 SMI Tom Hughes Collaboration Award. The announcement and presentation of the award took place at the SMI Fall 2023 Forum in Nashville, Tenn.
The SMI Tom Hughes Collaboration Award is in honor of the late Tom Hughes, SMI Executive Director from 2004 to 2021. The Award Steering Committee chose SMI members Northwestern Medicine and Casechek for their collaborative partnership to co-develop a solution to the industry-wide challenge of processing and managing Bill-Only payments.
“Having known Tom Hughes for many years, this award is truly an honor for Northwestern and for our supply chain team,” said Gary Fennessy, vice president and chief supply chain officer at Northwestern Medicine. “This award demonstrates the power of collaboration when two partners work together to solve a complex problem and what can be accomplished when you persevere through a difficult and challenging process.”
Casechek CEO Matt Brandt added that this isn’t a problem any one organization can solve itself. “We believe that great products aren’t built in isolation and could not be more thankful for our fantastic collaboration partners at Northwestern,” he said. “Together, we improved accuracy, eliminated errors and wastes, and streamlined processes to drive down administrative and supply costs to deliver procedural care.”