Medical Device Link.

EDITORIAL

When it comes to healthcare spending, the U.S. Government Accountability Office (GAO) is pretty worried. You may be able to dispel some of the fear.

“The government will face a serious fiscal imbalance driven by known demographic trends and escalating health care cost growth,” the GAO reported earlier this year. “Projections show that the federal budget is on a path that is fiscally unsustainable, in large part because of growth in spending for Medicare and Medicaid.”

There are powerful forces at play here—an aging population that may one day outnumber workers paying into such programs as well as chronic illnesses that are costly to manage.

Packaging itself may be an unexpected source of savings—but not through material downgauging or reducing other costs. Rather, employing identification technology throughout the healthcare supply chain so that products can be tracked from one end of the chain to the other could offer significant savings. “The introduction of these technologies in a standardized fashion holds great promise for healthcare,” says Laura Bix, PhD, assistant professor at Michigan State University School of Packaging (East Lansing, MI). (Bix also serves as a member of PMP News’s editorial advisory board.) “A system of visibility to all stakeholders within the supply chain would provide many benefits to numerous players.”

According to Bix, the benefits of automatic identification include:

• Improved order processing and transmittal.
• Improved inventory control.
• Bills of lading and ownership documentation (electronic pedigree).
• Information for regulators and customs.
• Integration with Computerized Physician Order Entry (CPOE) systems.
• Effective utilization of devices and other supplies (deployment within hospital).
• Accurate tracking of reprocessed equipment.
• Effective recall activation and control.
• More accurate billing and reimbursement.
• More effective public health emergency response.
• Evidence for prosecution and chain of custody in the event of illicit activity.

GAO offers a hint of the type of money that could be saved with better product identification. It reports that The Centers for Medicare & Medicaid Services “made about $700 million in improper payments for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) from April 1, 2005, through March 31, 2006.” Could identification errors be at fault—or perhaps even fraud, if DMEPOS items aren’t uniquely identified to eliminate duplicate payments?

Bix admits that getting all stakeholders together is difficult. “Great disparity exists in the legislation, regulation, and resources available to various countries,” she says.

In the meantime, Bix and a cross-functional team at MSU are working with GS1 Healthcare. This group recently emerged out of two existing user groups within GS1, GS1 Global Healthcare User Group and EPCglobal Healthcare & Life Sciences Industry Action Group. GS1 Healthcare is attempting to make the standards development process for healthcare identification more efficient. (For more details, contact Ulrike Kreysa, director, healthcare, GS1 Global Office, at ulrike.kreysa@gs1.org; or Bob Celeste, director, healthcare, EPCglobal North America, at rceleste@epcglobalna.org.)

Coming together makes perfect sense. The savings may add up.

Daphne Allen
Editor