The Strategy Behind the Scenes
Shmulik Bakerman, a former deputy CEO of the Israeli GPO and today VP of IDENTI’s sales, explains in 6 minutes why hospital management will forever have a hard time running an operating room, how it relates to the nurses’ burnout, the disappointment from EDI systems, and the `never ending` fear around transplanting expired and recalled item.
Shmulik: We’re talking about operating rooms that have about 25% unexpected events, coming from the emergency room… a car accident that no one planned for during the day…
The OR is in constant motion. They finish one surgery and immediately start the next. When you look closely, who is in charge of the entire operation? The head nurse, who was never trained to run operating rooms. Logistics and Materials Management do not set foot in operating rooms. I mean this is an environment in which doctors and nurses have exclusive access.
This creates a gap that is supposed to close somehow. Over the years, hospitals have invested a lot of money in ERP systems, thinking that the software will improve efficiencies. So first of all, to implement ERP and EHR systems, which are very heavy information systems, say SAP or ORACLE, is not something suited to the unique environment of the operating room. It’s suitable for warehouses but not operating rooms. And then you ask the nurse to use and report within those systems. These are things she does not know how to do and that’s when you get failures.
For instance, an item is missing. She has to run to the shelves before the operation and start counting and suddenly she discovers that the item she needs has expired or a recall was issued on the item and no one knows the item is on the OR shelf.
We realized that there is a critical problem with documenting utilization in ORs, which is happening at the end of the chain and is the root cause of all the failures at the beginning of the chain.
We come to the surgical environment and say: We have the tools that give you an edge; tools that will allow you to be in control. You no longer need to be anxious that an item may not be in stock, because we reflect what you have and give you the means to manage it much better.
We do not come and say replace your software. You have the best software in the world it’s true, but there is a missing link.
Interviewer: How was the documentation before you arrived?
Shmulik: Today, most usage reporting is documented with barcodes.
Interviewer: With a barcode just like …
Shmulik: Yes, during the operation, a nurse takes a barcode scanner and then she encounters all the problems of the ERP/EHR system. You cannot report because there is no inventory. There is inventory, and suddenly there is no stock, or the part number does not exist in the system—all sorts of things. And at some point, the nurse just says, “leave me alone. I’m done.”
Then we have reporting compliance on the global level. I’m talking about the United States in which only 48% of items used are reported to the EHR. This means 52% are undocumented. It’s like you are not recording anything. What’s the implication of all the items that you are not documenting? One, amazingly, is that you do not know how much a surgery costs. In a private company this is trivial. You always know how much your production line costs. You know how much the product that just came off the line costs. You need this information to price it.
So, this huge apparatus that we are talking about, the surgical department, makes up about 50%—maybe even more—of the total revenue of the hospital and also of expenses. It is also very difficult to manage at the operational level: supplies, unexpected events, and all that stuff. It’s a “black box.” You do not know how much it costs.
We solve this problem from different angle. We came from an angle that no one thought about. We thought to take a photo of the package and extract the information on it. All the nurse must do is place the package under the camera and she gets a green light. That’s it. She has finished her job.
Interviewer: The behind-the-scenes system is actually already inputting the product or item information where it needs to be inserted automatically.
Shmulik: Since our software has a very extensive database—I’m talking about hundreds of thousands of items—chances are a given product will be in our database. If an item cannot be identified, our back office will look for it in the manufacturer’s database. Then we return it through an interface to the ERP system or to the clinical system (EHR) of the hospital and in doing so we have solved the problem.
Interviewer: This is basically closing a circle.
Shmulik: Yes, we closed the circle. Earlier I talked about the aspect of pricing. I talked about the aspect of regulation. Now I talk about the supply chain. If I know from the supply management what I sent to the OR, and now at the point-of-use I know what was consumed, then what is in the middle, is already transparent right? Because I know what is in stock. Even if I do not manage the inventory at the point-of-use, the operating room, I still know through the delta what’s inside the surgical unit’s supply rooms.
If you are able through our system to produce a situation where you reduce OR inventories because you increase their level of certainty, it a) leads to reduced inventories, which means more space in the ORs themselves. Instead of overstocking for unexpected situations, there is now more room for medical usage. And b) You are saving money which allows for better medicine. I mean, you can transition from constraint-based implementation, an all-too-familiar situation, to a world where there is more room for decisions that can improve patient care.
Interviewer: Thank you very much for being with us Shmulik. I wish you again a lot of success. Thank you very much.
