PeCC Project end-term report
SECTION I. REVIEW OF THE PROBLEM
SECTION II. ACHIEVEMENTS AND DISAPPOINTMENTS
SECTION IV. PARTICIPANTS AND CONTRIBUTIONS
SECTION V. PROJECT DIRECTOR RECOMMENDATIONS
1.1 Change in Chairmanship
1.2 Create a World Class Demonstration Site
1.3 Implement ECSIG
1.4 Provide Funding
1.5 Restructure the Committee
2.1 Achieve EAN Critical Mass
2.2 Consultants
2.3 Create Industry EANnet Catalogue
2.4 IT Industry
2.5 NOIE
2.6 Prosthesis
2.7 Statistics, Facts and Shared Data
2.8 Step by Step SCM
2.9 Web Sites
3.1 Education
3.2 Exports
3.3 Global Issues
3.4 GP Desktop PC
3.5 Cultural Change
3.6 Public Relations
3.7 Transport - DOMEDI
3.8 Turnover Orders
PeCC END TERM REPORT
INTRODUCTION
The PeCC message is simple: the adoption of common numbers and inter-operable systems by the healthcare industry to capture consumption information in a timely and accurate manner. This information can be exchanged and processed to track the expenditure of funds for health care consumables and make it more cost effective.
The total annual cost of the healthcare industry is estimated at between, $37 billion and $42 billion. Of this, approximately half is consumed by overheads, fees and salaries. The half devoted to supplies consists of an estimated $6 billion for pharmaceuticals and an estimated minimum of $11 billion for all other consumables - from prothesis and scalpels to towels and light bulbs, etc. When Supply Chain Management and E-Commerce technologies were implemented in the United States over both pharmaceuticals and other consumables, savings of a minimum of 40% were realised.
Technological solutions now make it possible to recapture the vast amounts of wasted funding in the healthcare supply chain and enable these savings to be directed into staff and resource improvements. These savings could be used to deliver better quality healthcare by making sure that the right product is at the right place at the right time.
During its first 18 months, PeCC implemented seven Teaming Agreements (TA) and established three demonstration sites. These sites and others in progress are introducing elements of e-commerce and Supply Chain Management (SCM) at such places as the Department of Defence, Ballarat Base Hospital and Soul Pattinson. The PeCC project also initiated the development of a single electronic supply chain platform between manufacturers and the major wholesalers which could effect electronic transactions of approximately $6 billion when fully implemented.
The waste and shrinkage nightmare can be tackled more easily if products and services can be tracked and managed in one common shared pool of information which includes manufacturer, wholesaler, retailer, pharmacy, surgery, hospital, patient /consumer, and government.
The PeCC End Term Report documents the progress to date in five sections:
Given the relatively limited resources available to the project, some striking outcomes have been achieved. These are likely to bear further significant results in the next phase of the project which was recommended by a Price Waterhouse review.
The Project Director wishes to extend his appreciation to the many individual departments, associations and private sector companies who committed so much of their time and energy to achieve the results documented in this report.
Special thanks must go to CSIRO, the Department of Industry, Science and Tourism, and TELSTRA who contributed funding and physical resources to ensure these results.
SECTION I. REVIEW OF THE PROBLEM
Supply Chain Management (SCM) requires the use of Information Technology (IT), Electronic Commerce (e-commerce) and EAN Global Numbering Standards for all government and industry data bases that interlink in the healthcare chain. The EAN (European Article Number) is the universally recognised and accepted bar code we see on food packaging in our supermarkets. The PeCC model intends to achieve for the health industry exactly the same benefits and efficiencies as the food industry. Data is electronically captured at the point of sale, electronically tracked back to the point of manufacture, electronically re-ordered and electronically paid for. This timely and accurate sharing of data across the entire community is the basis for SCM's efficiency and cost savings.
The PeCC goal is for manufacturer, wholesaler, pharmacy, hospital, doctor, operating theatre, government claims processing, and private health insurance to all be linked with a single number for every item that is processed, consumed or otherwise paid for by the national purse.
Healthcare models in operation around the world have many things in common. One of the most critical is the burgeoning cost of providing healthcare to an ageing population. Political leaders in most economies are realising or being told that the exponential growth in costs can not be sustained. The typical healthcare system has two channels of service to the public, retail pharmacy and the public and private hospital systems. These channels share common suppliers and consist of close professional relationships between prescribers and dispensers of medication and services.
Meanwhile the 'business' structure of the healthcare industry is unlike any other comparable mixed enterprise and service model. The daily delivery is disjointed and introspective about challenge and change. Since the majority of the Australian healthcare spend comes from the government, the responsibility to repair the model lies with government.
A telling example of government taking responsibility is the USA, a country with a freer market than most. The US Department of Defence has mandated SCM changes as outlined above which have already begun to eliminate waste and inefficiencies. The private sector then begins to follow suit. The world's largest operator of hospitals, Colombia Hospital Corporation will make bar codes and electronic commerce capability the mandatory condition for purchasing choice. From July 1998, no bar code - no order.
In Australia, the retail pharmacy community is rapidly following the retail grocery model. They are investing in barcoded PC and Point of Sale (POS) tools for the shop and the dispensary to monitor and control their business costs.
However, the hospital, nurse and doctor community are not moving as quickly. Hospitals have at least three tiers of management styles: the business administrators, the healthcare professionals and the supply managers. Each style has their own attitudes, traditions and training, and this has been to a large part responsible for the deficiencies in the healthcare industry supply chain. The top tier is medical service procedures and ward dispensary activity. It is at the core of everyone's interest, while SCM is seen as a second or third tier issue.
Increasing costs have traditionally been "solved" by retrenchments, outsourcing, bed closures and expanded waiting lists. Better managed, faster and more reliable supplies of products and materials has largely not been seen as a potential solution. Few have realised that significant sums of money could be released by reducing the enormous inventory held by hospitals.
This three-tiered structure makes it impossible to recognise or to fully identify the waste in the supply chain because the following basic management questions have generally not been asked across the tiers: What do clinical and nursing staff actually want? What do we actually order? Do we get it? Do we pay the right price? Is it used/consumed? Do we recover its cost?
The healthcare industry is lacking quality statistics in the areas of the procurement and use of pharmaceutical's and consumables. It is unfortunate that there is no commonly shared, commonly accepted body of information. However the fact that there is waste in amounts rarely found in comparable industry models by size and political sensitivity is undeniable.
Methodologies and disciplines that are common in other industries are often, sometimes with justification, explained away with the healthcare industry mantra; "we are here to save lives not run a perfect business model". Many responsible people in the healthcare system purposely over order, hoard, waste or over bid on the basis that "otherwise I won't get what I need when I need it".
In retail sector, the industry expectation is 3% shrinkage in an audited profit and loss statement. The PeCC project managers have regularly quoted a figure of 15% shrinkage to a wide range of healthcare industry professionals in private and public meetings. In every case there is universal and strenuous rejection of the 15% number as much too low. One hospital found a 24% shrinkage, another measured a 60% shrinkage in their operating theatres.
Shrinkage is defined as:
We have tracked the theoretical consumption of items against the actual usage in various hospitals. Examples have been found of significantly higher than normal consumption/reorder patterns of such as everyday items as band-aides, light bulbs, and bath towels.
Most Australian hospitals, like their US and European counterparts, are also very poor performers in terms of the following business practices.
These difficulties in reconciliation are largely a result of an uncoordinated three-tiered system. Few computers are networked to each other or the outside world on an open system basis. Historically, the reliance has been on specialist, under used, proprietary systems. One NSW hospital has over 400 cost centres. This means 400 different files, departments, wards, stores, accounting teams etc., where the same product may be differently described, purchased, received, stored, issued and hopefully, paid for. Often these have to be processed, reconciled and authorised through as many as three or more disparate IT systems. Re-keying the data creates transcription errors and introduces delays.
Frustratingly, most of this evidence is still anecdotal. However when the Australian experience is benchmarked with other countries the findings are very much the same. The USA Department of Defence model saved $11 billion (of $80 billion) in the first year of operating electronic commerce/bar code procedures, The highly regarded US efficiency report, EHCR - Efficient Healthcare Consumer Response, indicates that savings of 40% in some areas are possible across the spectrum of healthcare costs.
The Price Waterhouse report, PeCC: The Way Forward, found that through the improved use of supply chain management and e-commerce technologies, at least $340 million could be saved each year on medical/surgical healthcare consumables in the hospital market alone. Price Waterhouse also reports that there are more potential savings to be made through improving the supply chain for non-health care consumables purchased by hospitals. A broad estimate of $350 to $650 million dollars are spent each year for such products as food, linen, administrative supplies, etc. Improvements in supply chain management for these products could yield savings of between $45 and $85 million per year.
Naturally, every country is different. What will be the same that there will be waste, poor management procedures and a lack of common information that can be shared to track and repair the problems. Until such time as PeCC makes this possible, the wastage will continue to remain untraceable and unrecoverable.
SECTION II. ACHIEVEMENTS AND DISAPPOINTMENTS
AWARENESS: There is no doubt that the majority of the senior management levels of the healthcare industry are now well aware of PeCC. The principles, aims and technology platforms required for this paradigm shift have all been put on the table. This is particularly true in terms of SCM with single numbered EAN barcodes, inter-operable data bases, e-commerce, Internet and allied technologies. Senior management has acknowledged that the global 'its time' attitude should encompass Australia too.
BALLARAT REPORT: The PeCC Steering Committee commissioned Tradegate ECA to prepare the report we now refer to as "Alpha One" This excellent and defining work was completed by Georgia Blomberg with the total cooperation of the executive and staff of the Ballarat Base Hospital.
COOPER SEMINARS: In July 1997 the PeCC Committee, with the support of EAN Australia, brought Mitch Cooper to Australia. This was a major milestone as Mr. Cooper had previously led a team to pioneer a PeCC-like process within the USA Department of Defence's entire health care delivery system. During his stay PeCC held a number of public and private meetings where local healthcare leaders were able to hear and compare the USA story to the reality of the Australian experience.
DEPARTMENT OF DEFENCE: This is the major project achievement and deliverable. From April 1998, the Soldier Support Group of HQ Logistic Command will require all suppliers to meet full e-commerce and EAN (global standard) Numbering)/barcode compliance.
DATABASE: The construction of a comprehensive database was an important first step in defining the healthcare industry. Over 500 entries have been made for corporations, government departments or agencies, and associations relevant to the healthcare industry. The information included in each entry includes: postal and electronic addresses, names of key personnel with their telephone and e-mail contacts, financial contributions, interest in various demonstration sites, etc.
EAN GUIDELINES: During the third quarter of 1997, a PeCC working group produced and is distributing the Australian Healthcare Industry Guidelines for Barcoding. This document is the reference tool that the manufacturing industry will use to meet global standards in producing the various levels of EAN numbering systems.
ECSIG: The Electronic Commerce Special Interest Group is another major achievement and deliverable, the "eC" of PeCC. On 22 May 1997 PeCC organised a large video conference across four cities to explore the interest in having one, single EC-VAN solution for e-commerce trading between the six major wholesalers and their 693 suppliers. ECSIG was formed to research, consider and decide on a solution that would eliminate the suppliers' resistance to uneconomical investments in multiple, disparate and proprietary e-commerce systems. Excellent cooperative work was done by many individuals and companies, particularly Fauldings Health care, in researching the issues and requirements to achieve a single healthcare industry e-commerce platform.
FUNDING: The initial DIST $150,000 project grant was supplemented by many government and private sector partners to the extent that the overall funding to PeCC exceeded $600,000.00. With a few exceptions the industry was prepared to contribute to a national effort. Significant amounts of matching industry funding was brought in through the very successful telemarketing campaign.
PRICE WATERHOUSE: During November 1997, the Department of Industry, Science and Tourism commissioned Price Waterhouse to undertake a review of the PeCC project. The document PeCC the Way Forward takes a conservative view of the activity to date and concentrates primarily on the medical/surgical consumer SCM issues, the products that make up the core of the hospital purchasing catalogue. The USA researched EHCR report also concentrated primarily on this market sector.
The Price Waterhouse report recommends that the PeCC project be extended into 1999. This "highlight" recommendation formally supports the need to finish the task.
SENIOR ACCEPTANCE: An early PeCC decision was to spend the first defining months in 1996 talking and working at the CEO level of the prospective participants. The majority of industry leaders are now receptive to the message of SCM with open e-commerce and barcoding standards. They now accept that their earlier interest in IT proprietary systems has to be replaced.
The need to cover as wide a playing field as possible impeded PeCC's ability to also focus on vertical issues. It was frustrating to only be able to spread a thin activity level across everything. But 'everything' had to be touched on and investigated, no matter how thin the veneer. Trying to get a fix on the problems out of context would not work.
The fact that PeCC had only one full time "employee" dictated that demonstration activities with the various State Health Organisations be restricted to a geographically manageable size. Very recent developments have begun to rectify this shortcoming to allow PeCC to operate in a more national context. In December 1997 a group of Commonwealth, State and industry representatives met for the first time, exchanging views on PeCC subjects as well as on-line technology, smart cards and video clinical applications.
The official PeCC effort has been restricted to the smallest possible resource - one full time person with the support of an enthusiastic Steering Committee and a secretariat provided by DIST. This effort was funded almost equally between federal funding and matching industry funds.
The initial strategy was to introduce the PeCC concept to the healthcare industry and maintain an information flow. During these 18 months a vast amount of written and electronic information has been collected and distributed to the industry leaders. The PeCC Committee received a comprehensive weekly report that accurately recorded all meetings and events of note. Information was also distributed weekly to over 70 selected recipients, both electronically and by hard copy.
A second strategy was to engage industry cooperation. With a few exceptions the healthcare industry contributed time and money in a very professional effort to investigate the effect of controlled, managed change on their collective business models.
During 1997, most of the 693 suppliers received EAN compliance letters from API, Defence, Pharmacy Guild, Sigma, Soul Pattinson and Victorian Health Association (VHA), now Hospital Supplies of Australia (HSA). While grabbing some attention with varied responses, the letters did not get the message through to everyone that a clock is ticking. This exercise requires constant attention, not only with the supply partners but also with transport, distribution, software, advisory and last of all the customer/client/user base - where consumption happens. A steady information campaign based on benefit, rather than compulsion has been conducted and needs to be continued.
At the beginning of the PeCC project the pharmacy/health industry's attitude to bar codes was fairly ambivalent. While dispensing, the pharmacist routinely stuck the instructions label over the EAN symbol. Wholesaler "PDE numbers" were used for most transactions which as proprietary numbers could never be used for any open system POS data capture role.
This is rapidly changing. In the retail and hospital dispensary, pressure is coming from several directions. The need to control use-by-date, and to have the ability to track batch numbers (barcoded) is pressing. The coming use of electronic prescriptions will further drive the industry to accept the need for a barcode on each packet that is dispensed. In both these environments there is no better, cheaper and simpler way to accurately capture data than to scan a barcode that is a global standard identification of every product. The basis for a healthcare industry SCM system is the EAN barcode.
Retail pharmacy understands it needs to adopt EAN barcoded Point of Sale technology and discipline. The benefits are compelling. Currently the percentage of barcoded product passing over the POS scanners is not at critical mass. Until it is the Return on Investment for POS technology will not be realised by the retailer. The pressure is on manufacturers, as it is in the grocery industry and for the same reasons, to supply barcoded product into the supply chain. It is estimated that the position with barcode printed packaging compliance is:
|
INDUSTRY |
CURRENT |
CRITICAL MASS |
|
Products common to grocery/retail: |
90% |
Now |
|
Proprietary Medicines |
80% |
1998 |
|
Prescription products |
65% |
1998 |
|
Medical/surgical |
40% |
1998/1999 |
|
Prosthesis |
15% |
1999/2000 |
Interestingly, many products are EAN registered but not yet (packaging) barcoded. This gives some level of optimism that once the manufacturers use their old stocks of packaging the percentages will rise dramatically.
The third strategy is to continue to engage government cooperation. Ultimately it is their responsibility to spend wisely. The public sector, as the client, has to show the leadership and drive to invoke change that will then be embraced by 'market forces' as inevitably good.
Mandatory policy or legislation may in time be necessary to implement e-commerce/supply chain management disciplines to lower the public cost/waste evident in the healthcare system. This is an option adopted by some other countries. In the meantime it may be far better if the industry works collaboratively and at a pace that allows all parties to gain mutual benefits. This requires political leadership to uncover, recruit, empower and appreciate individuals who have the energy and knowledge to see the vision and work energetically to achieve the change.
The ultimate strategy is to see proprietary systems and in-house solutions systematically replaced by open, seamless IT capable of exchanging timely and accurate information across the healthcare industry. This information must be based on EAN numbering systems and barcodes and e-commerce/Internet solutions. Eventually products that do not comply would be excluded from purchasing panels and e-commerce catalogues.
There will be impediments besides the expected vested interests in proprietary systems and the general resistance that meets any change. For example, some parties must gain from the current wastage. There are legitimate concerns about the cost of re-equipping and re-engineering the existing IT tools and the cost of training and re-education healthcare workers. The ROI must be accurately and properly calculated, made more widely known, and the burdens equitably shared.
There will be other issues to resolve. Until the Private/Public Key Authorisation Facility (PKAF) matter is decided, industry efforts like ECSIG may be impacted by the need for Small to Medium Enterprises (SME) being required to have different authorised signatures depending on their banking relationships between different trading partners. Another issue is that of healthcare specialist software products, such as clinical packages. These must be able to process EAN file structures and communicate internally and externally on an open data transfer basis.
Assistance and training will be needed for the older sections of the EDI community who are not at ease with e-mail and the Internet.
Government too must realise that unlike the grocery industry, the healthcare market cannot sort itself out without being led on a Federal level and by the major public sector customers.
The range of participants and contributors to PeCC has been extensive and diverse. These include:
|
ABOL |
ADVANTRA |
AT &T |
|
BIG POND |
FRONTEC |
GEIS |
|
OZEMAIL |
STERLING COMMERCE |
TEDIS |
SOUL PATTINSON have contributed financially.
1.1 Future Chairmanship
Recruit a high profile, respected and well-connected individual.
1.2 Create a World Class Demonstration Site
Select one of the existing demonstration sites, for example Ballarat, bringing it to completion and making it the hospital not only all of Australia but other nations will visit and use as a benchmark for what is achievable using SCM and e-commerce in the healthcare industry.
1.3 Implement ECSIG
A major deliverable to date, ECSIG is the foundation stone for almost all of the SCM goals. A seamless e-commerce system that can be used by all suppliers and all wholesalers is a very significant achievement. Given that the ECSIG model reaches expectations of implementation, then it is reasonable to aim for 100% paper-less purchase order trading within 18 to 24 months.
1.4 Provide Funding
On the expectation of increased Federal and State commitments the PeCC Project will need the way and means to raise matching industry support and sponsorship. A key recommendation is that PeCC continue to build the telemarketing resource and data base to facilitate this outcome.
While maintaining a lean and modest budget for central project coordination, PeCC should be distributing the matching funds raised through telemarketing, directly to the demonstration sites so that Project Managers can be recruited to do the job locally.
PeCC should deliver "PeCC Sponsorship Plaques" so that contributing organisations can display their commitment.
1.5 Restructure the Committee
To complete the task the PeCC Committee should be revamped to better represent all sectors of the healthcare industry. To this end one recommendation is that of a triangular structure of three discreet committees be formed:
|
PeCC Policy |
basically a sightly altered membership to the existing steering committee |
|
Industry & Technical |
professional and industry associations, individual representatives of the supply and client community, academics, representatives of standards, regulatory and similar advisory boards. |
|
State Health |
a round table of senior Federal and State government representatives. |
2.1 Achieve EAN Critical Mass
Like the grocery industry the healthcare industry can not hope to operate best practice, SCM discipline without single number data bases supporting the tracking of EAN barcoded packaging. A PeCC target should be to achieve 90% symbol marking during 1998/99. This is a relatively easy goal for product that is common to the grocery/retail industry. It is then reasonable to expect similar performance from the scheduled/ prescription supply market. Finally it is important to remember that all labels must be clearly able to impart human readable information
2.2 Consultants
PeCC should continue to run very lean, without a large secretariat and big numbers of "full-time" employees. Funding should continue to be funnelled through to part-time project managers, local experts and qualified consultants on an as need basis as determined by the Teaming Agreements and demonstration sites.
The creation of an accredited list of consultants in various fields of expertise and an Advisory Board would accomplish this and many other goals. For example, this list could become a valuable tool not just for the healthcare industry but other SME's in Australia. As well, such an Advisory Board would be ideally suited to facilitate and expand the export of Australian supply chain management and e-commerce products and services.
2.3 Create Industry EANnet Catalogue
Currently any product can have a multiplicity of identification numbers determined by user. In the reasonably efficient pharmacy wholesale market there are 29 formally different numbers for every single product. A Coopers and Lybrand report showed that the grocery industry could remove $1.2 billion of waste from their collective supply chain. A major contribution to these savings would be a single EAN number electronic catalogue. The Grocery Industry Supply Chain Committee (GISCC) working with EAN Australia is creating this asset for the grocery industry.
A key recommendation is that the healthcare industry create a Health Industry Supply Chain Committee 'HISCC' to emulate this activity.
2.4 IT Industry
Detailed dialogue with AIIA on inter-operability and standards issues should continue. A healthcare summit is being held for the IT industry under the leadership of AIIA to promote the national interest in terms of what is required of the IT community. Equally important is the necessity to explore the significant IT purchasing budgets that will be needed over 5 years to put in place a world's best health IT system.
2.5 NOIE
PeCC should be made fully known to NOIE and a strategic alliance established.
2.6 Prosthesis
It has always been PeCC's intention to be driven rather than to be the driver. In light of this, a proposal is currently on the table to complete a study and make recommendations as to how the EAN system could reform the management and cost recovery performance of prosthesis consumption. This is a primary concern for the health insurance industry. Solving this problem will assist in making insurance more affordable and attractive to the public. This will be a win for every one, particularly the (Health) Ministers.
This study should be undertaken without delay and with funding from both PeCC and industry sponsors.
2.7 Statistics, Facts and Shared Data
Whether by commissioning a local version of an EHCR report or other varied specialist studies, it is imperative that PeCC obtain consensus as to what constitutes the health industry's purchase, spend and subsidised payment sums.
Much excellent work has been completed in the creation of a data base, primarily for sponsor recruitment. Naturally, as time goes on this data base will grow in importance and will therefore require appropriate funding and management commitment.
2.8 Step by Step SCM
A Teaming Agreement and site program should be put in place to develop point of consumption data capture; the 'cash register' at the bed approach.
A Teaming Agreement and site program should be put in place to reduce the mountains of paper that flow through a hospital's system focusing on better order management, distribution, inventory turns, waste control and material availability.
A Teaming Agreement and site program should be put in place to demonstrate payments standardised with EAN barcoded claims forms. Relevant government agencies could then: 1) classify, 2) categorise, 3) analysis, 4) track, 5) process and 6) pay all legitimate claims promptly and accurately. One of the first actions would be to visit a similar US site.
A Teaming Agreement and site program should be put in place that incorporates the financial, IT and regulatory bodies (PKAF). ECSIG and other emerging e-commerce applications coming on-line cannot operate to full effectiveness until this issue is resolved.
2.9 Web Sites
PeCC should be the catalyst for industry standards and regulatory bodies to form a management group to work with EAN Australia to create this valuable, central catalogue. Once this action is done it will then be up to the industry to cement and continue structure they organise.
One of the original aims of PeCC was to encourage the use of the Internet to bring healthcare people together electronically to exchange common news. This represents a component of the final " C " of PeCC. A strong recommendation is that the Committee find a partner, sign a Teaming Agreement and set up a number of demonstration sites.
A properly maintained, informative and credible website for demonstration site news should be created. This PeCC website could be linked to non sensitive areas of the PeCC database. Also the website should provide linkages to relevant overseas demonstration sites. Another of the website goals should be to allow the public more access to health and pharmacy information.
In concert with recent government reports ('Goldsworthy Task Force' and, 'Spectator or Serious Player'), the PeCC website should play a role in developing healthcare industry SME applications. This should be pursued with industry subgroups such as community pharmacies, GP's and nursing homes as well as the SME's providing general goods and services to the healthcare industry, such as food, linens, stationary, uniforms, etc.
3.1 Education
The training resource problem for SME is a major factor. One very good possibility is the emerging Australia Electronic Business Network, a Commonwealth, State and Territory backed program.
A pharmacist, doctor, nurse or social worker in Port Lincoln or Mt Isa must have the same level of e-commerce capability as those in the big cities. Therefore the whole gamut of workshops, booklets, brochures, Email, Web, press, public meetings, regulatory meetings, and parliamentary committee meetings should be on the agenda.
Industry associations are one of the best vehicles to bring about change. As they are run and funded to look after their members' interests it follows that the elected boards of these associations should become supportive of the PeCC process. Therefore it is critical that the associations be approached to become part of PeCC. A representative, but far from inclusive, list of potential recruits includes:
Australian Information Industries Association (AIIA)
Automatic Data Capture Association (ADCA)
Australian Medical Association (AMA)
Australian Private Hospital Association (APHA)
Australian Pharmaceutical Manufacturers Association (APMA)
Domestic Transport EDI Project (DOMEDI)
Tradegate ECA
Medical Industries of Australia Association (MIAA)
National Office for Information Economy (NOIE)
National Pharmaceutical Distribution Association (NPDA)
Pharmacy Guild of Australia (PGA)
Proprietary Medicines Association of Australia (PMAA)
Pharmaceutical Society of Australia (PSA)
Royal Australian College of General Practitioners (RACGP)
Continuing dialogue between the associations and government training programs is needed to begin planning for future courses to include IT in all professional and trade courses for the healthcare industry.
3.2 Exports
The goal of increasing our regional healthcare exports is being forwarded by PeCC. Through the installation of our SCM technologies (barcodes, on-line catalogues, e-commerce tracking and accounting) into partner sites, we can export not only the personal expertise but also allied products and services. These IT systems will pull through the manufactured goods that populate the catalogues - all traceable by global standard barcodes. Australian and international PeCC demonstration sites would of course be linked to allow the cross exchange of information and bench marking.
The recommendation is to maintain the early PeCC work underway with PNG and Indonesia and follow up on the interest expressed by China and Japan. There are also discussions underway for PeCC to partner APEC in selecting, implementing and maturing demonstration sites of the PeCC model in Brunei. PeCC would be delivering the various participants in a Teaming Agreement covering all aspects of the task: manufacturing, health professionals, inventory project managers, etc. The primary goal would be to research, recommend, implement and hand over a working PeCC site to the owner in the shortest practicable time frame.
3.3 Global Issues
Aside from keeping track of emerging "trends and standards" overseas, PeCC should establish close and regular contact with overseas organisations and individuals who are clearly working on parallel paths.
The two most obvious are EHCR, the US project that is leading PeCC by example and achievement and EUCOMED, the European equivalent of MIAA which is following the EHCR model by endorsing the use of EAN symbology for all medical and surgical transactions.
3.4 GP Desktop PC
Handwritten prescriptions are rapidly going to be replaced by PC printed and barcoded ones. There is a worldwide shift happening with countries like Spain leading the way. Because very few doctors in single or group practice can totally justify the cost of desk top systems solely to transmit data to and from the HIC, there must be IT solutions that address the total needs of a surgery: accounting, scheduling, search engines for medical references, records and files, etc.
Therefore PeCC should establish a Teaming Agreement and demonstration site to assist in this evolution
3.5 Cultural Change
There is concern that doctors and nurses are too busy to use a keyboard to capture data in a timely and accurate manner at the source. There are technological alternatives. Doctors could use voice recognition data entry or PDA pen pads in place of the manual script pad. Nurses could use a device to read the barcodes on wrist bands, prescribed medicines, or the procedures on the clipboard.
A priority action should be for PeCC to promote the emerging work under way. A number of Teaming Agreements are under discussion.
3.6 Public Relations
Relevant documents should be prepared for the Healthcare Professional such as Nurses, GP's, Pharmacists, etc. Similarly there should be appropriate materials prepared for the other professions such as administrators of hospitals, Nursing Homes, etc. Additional publications are needed to impact specific issues, ie "Cost & Benefits". Such a brochure would be aimed at those in the industry charged with making the one-off investments in SCM to give them both offshore and local financial 'proof of concept ' figures.
One important tool missing from the present PeCC effort is an effective press/information resource geared to reach as wide an audience as possible with facts and figures that are relevant and newsworthy
3.7 Transport - DOMEDI
Our anecdotal evidence indicates that a significant proportion of shrinkage occurs outside the four walls of the hospital. While the goods are in transit they may be 'redeployed'. The existing disparity between the three tiers of the hospital IT systems masks the actual arrival, making tracking of all incoming goods impossible. PeCC has begun to attract interest in a DOMEDI transport site. This Teaming Agreement should be pursued as a priority.
3.8 Turnover Orders
Customers buy from wholesalers to receive fewer deliveries and fewer invoices. A manufacturer, on the other hand, wants to deal directly with the customer to maximise their product exposure through shelf space allocation. This is true in both the retail pharmacy and hospital store rooms. Turnover Orders (TO) satisfy both sides. The manufacturers representative visits the customer and takes an order which is then 'turned over' to the wholesaler to deliver as part of the regular bulk delivery and invoicing systems. However because of the existing numbering and identification problems, TO's tend to be manually processed leading to delays and frustration. PeCC should demonstrate the benefits of linking the TO factor into the mainstream of e-commerce/barcoding standards and disciplines.
The PeCC mission was to increase awareness of Supply Chain Management and Electronic Commerce as a cost saving tool to the supply system for hospitals and pharmacies. This was to be carried out during the last 18 months by:
This end term report documents the achievements against these goals.
Supply Chain Management utilises the key features of IT: Global Numbering Standards (EAN), barcoding, and Electronic Commerce to track supplies from manufacture to point of consumption. The benefit of this technology lies in its ability to pinpoint waste. The three-tiered structure of the hospital system with its non-compatible IT systems has made it difficult, if not impossible, to track the actual cost of the healthcare industry itself, let alone the wastage.
Anecdotal evidence puts expenditure in the Australian healthcare sector at between $37 and $42 billion dollars with shrinkage at a minimum of 15% or up to $1.5 billion. The USA has benchmarked their own figures with savings as high as $11 billion (of $80 billion) in Defence alone. The huge amount of funds that would be released here in Australia through better management of the supply chain could then be allocated to reduce growing costs while providing high quality of healthcare to an ageing public.
The most important deliverable to date has been the giant step taken by the Defence in requiring that all suppliers meet full e-commerce and Standard Numbering/Barcode compliance by April 1998. Second only in importance is the achievement of ECSIG, which on implementation will provide a single platform for e-commerce based trading between manufacturers and wholesalers. In addition two groundbreaking publications have been produced. The Ballarat Report documents the results of "Alpha One", the first and best practical example of SCM at a hospital in Australia. The equally significant Australian Healthcare Industry Guidelines for Barcoding has become the reference tool for setting up EAN barcoding.
Industry awareness and acceptance has been brought about by such events as the successful Mitch Cooper Seminars and the letters of EAN compliance sent to the 693 suppliers by API, Defence, the Pharmacy Guild, Soul Pattinson and HSA (formerly VHA). The intense efforts by PeCC to physically contact the major players in the industry has resulted in the active involvement of over 75 corporations, government departments and associations.
There are seven Teaming Agreements and three matching demonstration sites in operation or in development. Matching industry funding has totaled $154,000 in actual deposits to the PeCC account at CSIRO. In kind contributions are estimated to exceed $380,000.
The recommendations listed in Section V can be summarised into four categories: structure, funding, leadership and demonstration sites. The PeCC Committee needs to be restructured to capitalise on expertise from all segments of industry, academia and government. Another and very valuable structure would be the creation of a Health Industry Supply Chain Committee (HISCC), to parallel the progress made by retail grocery in developing an industry wide, single EAN numbered electronic catalogue. Thirdly, an advisory board and listing of accredited consultants would function as a para-structure ideally suited to facilitate the export of Australian SCM and e-commerce products and services as well as making them more readily available to SME within Australia.
Industry has demonstrated its willingness to match government funds from the Commonwealth, States and Territories. Industry has also been willing to sign teaming agreements for demonstration sites where their expertise can forward the governments' goals as well as their own objectives. However, there are areas where vested interests make it politically expedient for government to continue to provide funding. It is an absolute necessity that a statistical study such as the USA's EHCR study be conducted in Australia. Similarly, public relations for PeCC and the various demonstration sites should have industry - independent funding. Lastly, the WEB sites also need the financial neutrality of government funding.
Leadership is government's prerogative as well as its responsibility. Selecting the new chairman, implementing ECSIG, driving critical mass with EAN numbering and dealing with global issues can only be determined at a Federal Ministerial level.
In addition to the three operational demonstration sites, there is a very great need to sign teaming agreements with industry partners to develop other sites in these areas: Activity based costing, Billing and Ordering, Claims processing and Digital Signatures; Transport; GP Desktop PC's; Surgery/bedside non-keyboard technologies, Turnover Orders and Exports.
The results of PeCC to date provide compelling evidence that implementation of SCM and e-commerce is both timely and crucial to the continuing financial viability of the healthcare industry. The Price Waterhouse Study recommends that the PeCC initiative be extended into 1999 with government support to finish the task.
The evolution of the PeCC project rapidly gained support and was embraced by a wide range of organisations, friends, patrons and individuals. No matter how compelling the e-commerce/EAN/Internet vision, the present level of awareness and activity rests largely with the combined and cooperative effort of many experienced and energetic champions. A representative but not complete list includes:
CONSULTANTS
Judy Paterson for her knowledge and advice concerning almost everything to do with the real world of the hospital sector.
Ross Davey for the ground breaking work in Ballarat.
Georgia Blomberg for authoring the Ballarat Report, a foundation document that will be widely used and referenced for a long time to come.
Norman Graeve and Warwick Wilkinson for helping PeCC reach both the academic and community levels of the pharmacy profession.
Barbara Knackstedt for her professional assistance in telemarketing and fundraising and, together with Helen McClure, for the creation of a data base that far exceeded our expectations.
INDUSTRY REPRESENTATIVES
Debbie Asplett of Soul Pattinson for her commitment to critically examining the issues and acting positively and practically.
Maria Palazzolo of EAN Australia who has worked tirelessly to transfer the EAN message into the healthcare marketplace.
Deborah Monk of the APMA who organised a pivotal seminar for the supply and manufacturing community to understand many of the issues they face.
Warwick Sutton, then of FH Faulding, for the foundational research work that led to the creation of the ECSIG working party.
Roger James, then with HSA/VHA, for his unfailing enthusiasm and industry knowledge in support of PeCC.
The following executives have contributed significantly to ECSIG:
Alan Spaul, API
Ken Hudspith, HSA
John Ioannou, Sigma
Malcolm Thorpe, FH Faulding
as well as Debbie Asplett and Warwick Sutton mentioned above.
GOVERNMENT REPRESENTATIVES
Peter Moore and Craig McGrath (DIST), Phil McCrea (CSIRO), Gil Burdelmayer (HIC) and Sepp Babler (Centrelink) have all contributed mightily to getting the project this far.
Alex Sawicki from MMV has been an unfailing friend and supporter.
Alan Hands, Garry Farmer, Peter Cubit, Major S. Shaddock, Mandy Cramer and Group Captain R. Peck from Defence have played a steady and progressive role in developing the aims of the PeCC Project.
Sally Glass of NSW Health has only recently become involved but is significantly accelerating the exposure of the PeCC process within NSW. We also mention the assistance of Lisa Oltorf of the NSAHS.
PeCC STEERING COMMITTEE
The following organisations were represented on the steering committee through December, 1997
CSIRO
Department of Administrative Services (now part of the
Department of Finance and Administration)
Department of Defence
Department of Health and Family Services
Department of Industry Science and Tourism
EAN Australia
Health Insurance Commission
Multi Media Victoria
Pharmacy Guild of Australia
Tradegate ECA
The APMA and the APHA were observers.
OTHER ORGANISATIONS AND CORPORATIONS
Over time the Steering Committee has had the valued contribution of several representatives from AIIA, APMA, and especially Jenny Laffey of APHA for her constructive advice and support. In addition, the following companies and government bodies had given much appreciated assistance.
ANZ Bank
APEC - Asian and Pacific Economic Cooperation
Astra Pharmaceuticals
Australian Data Capture Association
Australian Medical Association
Ballarat City Council
Central Coast Area Health Service - Gosford
Central Sydney Area Health Service - Peak Purchasing Council
Chase Manhattan Bank
Computer Science Corporation
Department of Foreign Affairs and Trade
Grocery Manufacturers Association
Health Communication Network
IBM
ISSC (now Global Service Australia)
Medical Industry Association of Australia
Monash University
National Farmer's Federation
NSW Health
Optus
Paramedical Software
Pharmaceutical Society of Australia
Price Waterhouse
Proprietary Medicine Association of Australia
Royal Australian College of General Practitioners
Royal North Shore Hospital (North Shore Area Health Service)
Technology Resources of Australia
Virtual Logistics Operations Pty Ltd.
AeBN Australian electronic Business Network
ABL Australian Business Ltd.
ABOL Australian Business On Line
ADCA Australian Data Capture Association
AMA Australian Medical Association
APEC Asian and Pacific Economic Cooperation
APHA Australian Private Hospital Association
API Australian Pharmaceutical Industries
CCAHS Central Coast Area Health Service
CSAHS Central Sydney Area Health Service
DEMONSTRATION Working site, not a PILOT/TRIAL
DOMEDI Domestic Transport EDI Project
EAN European Article Number; global association for universal standard product numbers
EANNET Electronic Codification Catalogue
ECSIG Electronic Commerce Special Interest Group
EC-VAN e-commerce - value added network
EDI Lapsed description of e-commerce
EHCR Efficient Health Consumer Response, USA Report
EUCOMED European equivalent of the MIAA
GISCC Grocery Industry Supply Chain Committee
HCOA Health Corporation of Australia
HIC Health Insurance Commission
HISCC Health Industry Supply Chain Committee
HSA Hospital Supplies of Australia, formerly VHA
INTRANET Intra-company on-line exchange of information
MIAA Medical Industries of Australia Association
MMV Multi Media Victoria
NFF National Farmers Federation
NOIE National Office for Information Economy
NPDA National Pharmaceutical Distribution Association
NSAHS North Shore Area Health Service
PDE Portable Data Entry (terminals)
PGA Pharmacy Guild of Australia
PKAF Private/Public Key Authentication Facility
POS Point of Sale
PMAA Proprietary Medicines Association of Australia
PSA Pharmaceutical Society of Australia
RACGP Royal Australian College of General Practitioners
RF Radio Frequency Wire Free PC terminal
SHRINKAGE Lost, wasted or stolen goods; cost of goods paid for but not used
SCM Supply Chain Management
SME Small to Medium Enterprise
TGA Therapeutic Goods Authority
TRANSIGO Commonwealth Electronic Catalogue to be used by all federal government departments for purchasing
VHA Victorian Health Association, now HSA
VLO Virtual Logistics Operation Pty Ltd