One of the challenges the Departments of Defense and Veterans Affairs face when collaborating on a joint initiative is the interoperability of our respective data systems. George and Ira Gershwin’s “you say to-may-to, I say to-mah-to” may work for fun song lyrics, but differences in how we electronically describe medical products wreak havoc up and down the healthcare supply chain. The differences increase costs to taxpayers and potentially impact the quality of care for our veterans and servicemembers. Military and veteran hospitals are increasing their use of information technology and there is a potential cost savings to having clear visibility of ordering and contracting processes. Therefore, it is now more important than ever that hospitals and suppliers speak the same language.

Other large industries in the U.S., such as retail, hardware and grocery, have discovered ways to electronically talk about their products using the same format, minimizing confusion, order errors and redundancy, and significantly increasing their bottom lines. Thanks in large part to a Joint Incentive Fund program between DoD and VA, the healthcare industry is following in step. We are on the verge of implementing a system that will enable everyone in the supply chain to use a common set of global data standards accessed from a synchronized platform. Participating manufacturers, distributors, information systems and providers will be able to use the same information, in the same way, at the same time, every time.

The program serves as a model of how data synchronization can work in the healthcare industry as a whole. As of December 1, 2008, these federal data sync efforts have resulted in more than $30 million in total savings, with over 50 percent of the total saved in calendar year 2008 alone. More than $17 million of purchases have been processed online as opposed to manually.

Product Data Bank

Through the use of custom software, participating VA and DoD hospitals are documenting additional savings opportunities each month. The software pulls product, purchasing and contracting data from a robust data source known as the Product Data Bank (PDB). Containing more than 1.4 million master items from over 6 million records and growing, the PDB serves as a single, authoritative source for synchronized medical product information for DoD and VA.

The PDB produces clean, high-quality data that is available for military and VA hospital item masters and contract catalogs. VA and military healthcare facilities at home and abroad, including those in combat theaters such as Afghanistan and Iraq and newly participating locations such as Africa and Kuwait, are able to quickly identify and research products and alternatives that can reduce costs. This allows the user to focus on opportunities to leverage existing supply contracts, leading to savings that previously would have been impossible to find due to the disparate, incomplete and outdated nature of the data housed in hospitals’ IT systems. For example:

The average price for a certain intravenous set shows $115 for DoD and $75 for VA per unit, representing a potential for DoD to save $240,000 a year based on average usage, or 34% on that one item alone.

The average price per unit for pre-washed sterile gauze shows $110 for VA and $65 for DoD, representing an opportunity for VA to save up to $350,000 a year, or 40% on that one item alone.

Eighty VA and DoD hospitals are participating in the program and using the software tool regularly. By the end of 2009, most, if not all, VA and DoD sites are expected to be participating. In addition, two major distributors and more than 20 mutual supplier partners are already contributing data for the PDB.

Industry-Wide Solution Still Needed

While the government’s results are exciting, the work serves as an interim step until an industry-wide solution for synchronized, consistent and accurate product data becomes available. Such a “product data utility” could drive efficiencies and savings to the entire healthcare supply chain. In 2008, the industry made major progress with the endorsement of a single global source of true product information for healthcare. Participation in an ongoing DoD-sponsored pilot of a specific standards system grew to more than 50 healthcare leaders from hospitals and supplier organizations. This pilot project serves as a key resource for industry players who want to know more about how data sync works and its benefits.

Several name brand healthcare organizations, including leading group purchasing organizations, hospitals and suppliers, have publicly announced support for using specific standards (For more information on the standards, visit http://www.gs1us.org)—the same ones that are being tested in the DoD pilot—and are communicating their plans for implementation with deadlines between 2010 and 2012. It appears that healthcare is finally on a clear, unified path toward using the same product language with the goals of reducing costs, increasing efficiencies and improving patient safety. For the federal government, that means better care for our troops and veterans, during both peacetime and contingency deployments.

For more information about the DoD/ VA data sync program, contact Kathleen Garvin, program manager, at Kathleen. Garvin@dla.mil.