Learn. Lead. Connect.AHRMM delivers the information and resources you need to succeed.

Growing Together

Helping Each Other

Chapter Affiliations

� Diamond Affiliates

� Kansas Association for Healthcare

Resource & Materials Management *

� Mid Atlantic Society for Healthcare

Materials Management

� Western States Healthcare Materials Management Association *

* Indicates those chapters that have advanced to a higher level of affiliation in 2012.

Why AHRMM?

Why I joined and became active in AHRMM:

�To learn

�To network

�To share what I have learned

Mission and Vision

� MISSION

AHRMM strives to advance healthcare through supply chain excellence by providing education, leadership, and advocacy to professionals in hospitals, health systems, and related organizations that are accountable to the community and committed to health improvement.

� VISION

To advance healthcare supply chain excellence though the provision of education, the sharing and cultivation of knowledge, and continuous advocacy for the profession.

Why AHRMM Now?

The Harsh Realities

8

The future is unclear, but some things are certain:

Hospitals and providers will be reimbursed on value, not volume.

Hospitals will need to survive on Medicare reimbursement levels.

Healthcare costs must come down.

The Bottom Line: Hospitals and healthcare providers need to better understand what drives Quality AND Cost

Turning Healthcare on its Head

Providers and suppliers need to change their business models

Providers need to make money by keeping people OUT of the hospital

Suppliers need to make money while selling LESS of their products

Both providers and suppliers need to work together to improve operational performance and increase visibility to key data on cost and quality drivers

The Cost Quality Equation

10

Hospitals and providers will be reimbursed on value, not volume.

Under healthcare reform, healthcare providers will need to report on value delivered:

VALUE = COST + QUALITY

•What role do products play in lowering total cost, while improving quality?

•Can a more expensive product reduce hospital acquired infections or readmissions?

We need to accurately capture data at the point of use to understand utilization and value

It’s Time for the Supply Chain to Get the Respect it Deserves

11

Healthcare Supply Chain

Supply Chain: The Historic View

Order Takers/Placers

Box Movers

Why is the Supply Chain Important?

40-45%

Total hospital operating expenses represented by supply chain

2022 Year supply chain costs will supersede labor costs at a leading IDN

50-80%

Contribution of some implants to procedural costs

$1,000 Additional revenue to have same impact as $1 in OPEX reduction

5-15%

Potential SC cost reduction with better supply chain management

2-4%Better operating cost ratios for providers investing in back office

automation

Total Cost of Ownership

14

Total cost of ownership is a philosophy for really understanding all supply chain related costs of doing business with a particular supplier for a particular good or service.

- World Class Supply Management, 2003

Price Paid for a Product or Service

Cost to Procure Logistics

Inventory Costs

Cost Quality Equation

Cost to ServeEnterprise wide View

Systems Thinking

15

“Hospitals need to understand what drives our

costs and often we don’t. Manufacturers, on the other

hand, have industrial engineers and performance improvement staff who use

scientific formulas instead of anecdotal data to manage

their supply chains.”

Nancy LeMaster, VP, Supply Chain, BJC HealthCare

Collaborative Models

Providers Physicians

Payers Suppliers

Meaningful Use

BOTTOM LINE: Compliance with meaningful use will eventually include electronically capturing standard medical device identifiers.

Failure to meet Meaningful Use of EHRs will decrease reimbursements beginning in 2015.

Currently, only pharmaceuticals required to be documented in EHRs as part of meaningful use.

FDA and the Office of the National Coordinator for Health IT already working on future requirements for documentation of medical devices using the UDI.

GS1 Global Healthcare Conference

Sydney, Australia, 20-22 March 2012

�>320 delegates from 33 countries (compared to 40 delegates at the 1st

such conference 7 years ago)

Key Themes

�Cost and quality are global issues

�Global regulatory eyes on US FDA UDI rule

�Global manufacturers moving to GS1 standards

�Real success requires an industry wide collaborative effort

To download presentations:

http://www.gs1.org/healthcare/news_events/200412/post

AHRMM on Standards

� Healthcare Supply Chain Data Standards

� Supports the use of GS1 standards to regulate operations

between all trading partners in the healthcare supply chain.

� GS1 standards are used by 90% of companies and organizations

worldwide.

� Involved through participation with various organizations and

GS1 Workgroups including the leadership team.

� Sunrise Dates

� 2010 GLN Sunrise

"Adoption of GLN in Healthcare by 2010”

� 2012 GTIN Sunrise

"Adoption of GTIN in Healthcare by 2012”

� Learn more about healthcare data standards

on the AHRMM data standards website:

www.ahrmm.org/standards

Learning Together

Let’s earn our CMRP Together

I will give a donation to the WSHMMA charity of choice for every WSHMMA CMRP certification received this year.

See You in San Antonio

� AHRMM Annual Conference & ExhibitionAugust 5-8, 2012

� Interactive educational sessions led by industry leaders

� Largest exhibition of its kind

� Face-to-face networking opportunities with peers, vendors, and association leaders

� 2012 marks the 50th anniversary of AHRMM’s Annual Conference & Exhibition