E-commerce solutions take aim at hospital purchasing

By Jerry Zeidenberg

Two Canadian companies are battling for top spot in the newly-emerged ‘e-business’ of connecting hospitals and nursing homes with suppliers of medical and surgical equipment via the World Wide Web.

It’s an ambitious undertaking, and one that could lead to dramatic improvements in the way healthcare institutions conduct their supply-chain management.

That’s because Canadian hospitals and nursing homes purchase a huge amount of supplies – industry estimates peg the figure at up to $10 billion per year. Yet at the same time, healthcare organizations are often cited as the least automated sector of the economy and the one that could benefit most from adopting electronic technologies and business methods.

Ormed.com of Edmonton, and e-Health Market Inc. of Toronto, both plan to deliver web-based technologies that promise to cut costs and improve the efficiency of Canadian hospitals and nursing homes.

Ormed.com – the trade name for Ormed Information Systems Ltd. – recently announced that it will launch the Ormed Medical Exchange (or Ormed X) by January, 2001.

Ormed X will enable hospitals to electronically browse through product catalogs to determine the best prices for products, ask for quotes, and to order and pay for supplies on-line. Altogether, the service will enable hospitals to obtain better prices, speed up deliveries and significantly reduce paperwork.

According to the company, Ormed X will provide healthcare organizations with a one-stop shopping site for their procurement needs, making it easier to discover the range of products available in various categories and to quickly compare prices. Medical supplies – such as syringes, catheters and diagnostic imaging film – can be ordered without the delays of phoning or faxing and waiting for information to be re-entered into the computer systems of suppliers.
“Buyers can perform real-time item sourcing and obtain real-time price quotes,” said Ormed president and CEO Chris Sherback at a recent vendor meeting in Toronto.

He asserted that one of the problems currently plaguing supply-chain managers in hospitals is the paperwork that’s generated every time products are ordered from suppliers. Telephone calls and faxes are most often used to order products, resulting in the accumulation of reams of paper, which pile up at the vendor’s office.

Ironically, even hospitals and suppliers that have adopted electronic data interchange (EDI) often use their computers to generate faxes, which again accumulate as paper and slow down the sending and receiving of products.

“Faxes don’t improve processing at the supplier’s end,” said Sherback, who observed that information sent in this form must often be re-keyed into computers, throwing delays into the procurement process. What’s more, whenever documents are re-typed, there is always the chance of mistakes being made due to human error.

By contrast, the Internet leapfrogs the EDI model by using computer-to-computer communication. When ordering is performed on the Internet, there are no faxes or paper documents that need to be re-keyed. Accurate information can be quickly sent to the appropriate people, and orders can be rapidly put together and shipped.

“Hospitals have told us that their biggest delays occur when information is re-keyed from faxes into computers,” said Neill Orr, vice president of marketing at Ormed. “People make errors, forget to include all of the right addressing information, and sometimes neglect to include all of the proper documentation that’s needed.”

He noted that when using the Internet, information is entered into the system just once, and can then be routed to any number of people in a complete form. Moreover, he said that Ormed’s electronic systems prompt users to include all of the necessary information, so that employees get things right the first time round.

Using computers, ordering can be automatically triggered when inventory reaches a certain level in a hospital, resulting in just-in-time deliveries and replenishment of stock. As an additional step, electronic payment systems can be established – enabling hospitals to reduce their paperwork even further by electronically transferring funds to suppliers.

Ormed is a developer of financial, materials management and administrative software that is used in over 300 Canadian hospitals and healthcare organizations. These institutions purchased $950 million worth of supplies last year.

According to Sherback, a recent survey by the company showed that 69 percent of Ormed’s software customers are eager to join an on-line procurement network. He predicted that 60 to 70 clients will actively participate in the first year of operation for Ormed X, conducting some $250 million worth of transactions over the system.

Ormed has web-enabled all of its administrative and financial software offerings, meaning that hospitals choosing to do so will be able to automatically update their accounting and inventory programs when conducting transactions with suppliers through the Ormed Medical Exchange.

For some time, industry analysts have noted that hospital purchasing has been plagued by inefficiencies, and could be vastly improved by the adoption of electronic technologies such as enterprise resource planning (ERP) software and Internet-based ordering and communication.

One U.S. study concluded that 48 percent of the processing costs in the healthcare supply chain were avoidable – amounting to a whopping US$11 billion out of a total of US$23 billion.
Pundits say that similar improvements could be made in Canadian hospitals and nursing homes, many of which have not yet modernized their purchasing systems.

The situation in the United States and Canada may soon change. Market-research company Millennium Research Group, of Toronto and Boston, has studied the U.S. hospital system and forecasts that Internet-based procurement is about to surge. By 2004, total medical equipment procurement over the Internet will grow to US$27.3 billion, representing 31 percent of all hospital purchasing, according to a recent report by MRG.

That’s up from just US$114 million in 1999, a mere 0.2 percent of the overall marketplace.

“This represents a compound annual growth rate of nearly 200 percent for the period 2000-2004,” says the MRG report. “This figure consists of growth rates well over 300 percent at the front-end, tapering back towards 60 percent at the end of the forecast period.”

While Canadian hospitals don’t adopt new technologies as rapidly as their U.S. counterparts, Internet-based purchasing is expected to take root here, too, because of the cost-savings and efficiencies that can be obtained.

Meanwhile, many companies in the United States are scrambling to establish on-line medical exchanges, in a bid to grab brand awareness and market share in the early stages of this industry.

A June survey by MRG found that 60 percent of U.S. hospital purchasing managers were already able to identify MediBuy and Neoforma, two of the major Internet-based medical exchanges in the United States. Only 12 percent of managers were not able to identify the names of any online healthcare exchanges.

Other major online exchanges in the United States include Broadlane and empactHealth, along with the Global Healthcare Exchange, which has been set-up by 23 medical suppliers, including Abbott Laboratories, Baxter International, GE Medical Systems, Bayer Diagnostics and Johnson & Johnson.

In Canada, e-Health Market, of Toronto, is also seeking to bring hospitals and suppliers together with an Internet-based system.

In August, e-HM (found at www.e-hm.com) launched the first phase of its system, which consists of on-line sourcing, product comparisons and benchmarking. The benchmarking component shows what groups of hospitals in various regions of the country are paying, on average, for medical and surgical supplies.

In a second phase, e-HM plans to add an on-line Request For Quotes (RFQ) system, enabling hospitals to send out sophisticated requests for quotes to many suppliers at once. A third phase, to be released some time in the future, will connect the computer systems of hospitals with suppliers, allowing real-time updates of inventory and accounting systems. e-HM president Val Ornoy says the company has developed process management tools over the past few years that will streamline the procurement process for hospital purchasing staff.

“We can reduce the time spent on many tasks,” said Ornoy. “For example, instead of duplicating a requisition for supplies each month, a manager could have a regular ‘basket’ of products ready to go.”

That basket – perhaps of radiological goods – could be slightly altered each time. But with a click of a button, the selection of products could be sent out to five to 10 vendors with a request for a quote.

The result? The hospital quickly obtains the best price available that month, and all of the relevant information is transmitted back and forth by computer. That enables the order to be processed quickly and accurately.

e-HM plans to charge hospitals an annual subscription fee to be part of the system. Ormed Medical Exchange will not charge fees, but the suppliers that participate will pay 0.25 percent to 4 percent of each transaction cost to Ormed, depending on volumes, services and margins.

For the vendors, benefits include access to a significant customer base and a streamlining of their own paperwork – which is expected to result in cost reductions. “About 75 percent of the orders currently received by suppliers are on paper and have to be re-keyed,” said Sherback.

BACK TO TOP OF PAGE

PET scanning takes off worldwide, but Canada continues to lag behind

By Andy Shaw

There’s something about Canada that doesn’t scan. Or at least want to, despite the availability of the latest and greatest medical imaging techniques ever developed.

“Even at the level of MRI (magnetic resonance imaging), there are more MR scanners in the city of New Delhi than there are in all of Canada,” says Dr. A.J.B. “Sandy” McEwan, a professor of oncology at the University of Alberta and head of its nuclear medicine division. As president of the Canadian Association of Nuclear Medicine (CANM), Dr. McEwan feels the country’s dearth of positron emission or PET scanners even more acutely. “The recent Fraser Institute report that gives an overview of medical technology in Canada in relationship to the rest of the developed world shows that we are 27th in MR and in PET we rank below that.”

Indeed, as a well-documented CANM brief reveals, there are only two PET scanners in the country capable of full clinical use. One is at McMaster University in Hamilton, Ontario and the other is at the University of Sherbrooke in Quebec. These are the only scanners that can image body functions over the entire patient. Other PET scanners do exist, but they are used mainly for research purposes and are restricted to examinations of the brain, such as the one at the Montreal Neurological Institute, or the heart in the case of the Ottawa Heart Institute.

CANM views this shortcoming as a large chink in Canada’s armor against cancer and its costs. Notes the CANM brief:

PET has been in clinical use since the early 1990s. However, Canada lags significantly behind other G7 and most of the OECD countries in the provision of PET services. This technology can visualize the biochemical processes altered with disease before changes in gross anatomy are detected through traditional diagnostic techniques such as x-rays, CT scans or MRI.

The brief goes on to say that thanks to its proven early-warning capabilities, PET is now in routine use in most European countries and the United States, where it is saving lives and the enormous expense of cancer care started too late. But not here.

Why?

“Well, my facetious answer is, I don’t know,” answers the British-born and trained McEwan lightly. “There seems to be a systemic reluctance here to introduce new technology, which is crazy when you consider the amount of new medical technology that has actually been developed in Canadian universities.”

But McEwan then goes on to speculate with insight why PET in particular has been ignored in Canada. One reason is bad timing, he says. Until the mid 1980s, PET technology limited it to research of smaller areas such as the head. Scanning apertures were small, computers laboured long at processing even the smallest images, and the cyclotrons needed to produce the radio-active trace elements PET uses were huge and hugely expensive. And as with all new medical technology, there were Doubting Thomases about PET’s abilities.

“But then the technology began to change,” says McEwan. “Companies started to produce wider aperture scanners so that the whole body could be scanned. Computers also began to do the intensive re-constructions of images that are required. Cyclotrons became smaller and less expensive. And most importantly, at Duke University and at several sites in Germany, researchers began to show that the FDG tracer we use, which traces glucose metabolism, could image cancer. That got industry’s interest and in the early 1990s the whole technology started to take off.”

But that’s unfortunately when, says McEwan, Canada was mired in what he terms its “healthcare deconstruction.” That meant there was neither the political will, nor the money, nor the enthusiasm for adopting large new technologies. What prevailed at the time was the management consultant view that Canada didn’t need more technology – only more barefoot doctors and they will eliminate ill health in 20 years, observes McEwan wryly.

Meanwhile, the world is proceeding apace with PET adoption. In 1991 there were 20 PET centres worldwide. By 1997 there were 200 and will rise to an expected 250 by next year. Still Canadian health ministry authorities have remained skeptical about PET’s cancer diagnosing capabilities, says McEwan, refusing grant requests and asking for more “Canadian” evidence and research data – as if somehow Canadian humans were built differently from others.

“If you want evidence, you just need to look at St. Thomas’s and Guys hospital in London, England,” says McEwan. “It put in a (PET) scanner in 1991. When they started, they anticipated doing 800 to 1,000 scans a year, now they are doing close to 2,000 scans a year. But what’s more interesting the workload has changed. When they started it was just 20 percent oncology. Now it is 80 percent.”

Such evidence of high use by cancer specialists may have helped convince granting agencies in Alberta to give PET a full-body chance at the Cross Cancer Institute, in Edmonton. Supplied by ADAC Laboratories Canada, of Markham, Ont., the new PET scanner will perform both clinical and research activities under the direction of Dr. McEwan

“We’ve got funding from eight sources now and we should be operational within a year,” says McEwan. “What’s really helped is that PET scanners have dropped to the level of a good CT scanner (in the $1million dollar range) and are no longer three times the price. Licensing our cyclotron is proving more complicated than we expected.

“But once we do, experience in Australia, the United States and elsewhere suggests we’ll be able to supply isotopes at a reasonable cost to other centres in Western Canada. So places like Calgary and Saskatoon will be able to get into PET scanning for just the price of a scanner and the necessary room renovations and not need a cyclotron too.”

Finally, positive emissions out of Canada.

BACK TO TOP OF PAGE

Children’s Hospital makes use of telehealth for genetics consultations

By Kim Garwood

OTTAWA – The first-ever nationwide genetics dysmorphology rounds were held in June, thanks to the use of telehealth technology. What’s more, the development could mark the beginning of a national telehealth genetics service, say organizers at the Children’s Hospital of Eastern Ontario (CHEO).

One quarter of Canada’s clinical geneticists crowded around computer workstations at 12 different genetics clinics across the country for the multi-site session. Each group hooked into the conversation using video teleconferencing equipment. Using the technology to exchange photographs and expertise, the participants discussed cases involving individuals with multiple physical differences and anomalies.

“The response to the session has been overwhelming,” says the session’s coordinator, Kathy Crone, systems and telehealth manager at CHEO. “Plans have already begun for CHEO to host these rounds on a regular basis.”

The genetics rounds provide an opportunity for isolated experts to connect and share ideas and information about difficult-to-diagnose cases. Few and far between, geneticists are usually forced to work in very small groups, and count themselves lucky if they are able to compare notes with one or two others. The telehealth technology is a substantial improvement, making it possible to create an instant network of geneticists.

Explains clinical geneticist and virtual “host” for the rounds, Dr. Judith Allanson: “It gives us comfort to talk to other experts, even if they are also unable to make a diagnosis. It helps us make sure we haven’t missed anything.”

Dr. Allanson was a catalyst for the telehealth-genetics initiative at CHEO, importing the idea from colleagues at Hôpital Necker in Paris, France, where the technology is used to communicate with centres at a distance. The link with Paris provided the impetus for CHEO’s first genetics telehealth conference this spring. The success of that session inspired the Genetics Program to explore the possibility of using telehealth to bridge distances within our own borders.

“I thought it was the perfect tool for a country the size of Canada,” Dr. Allanson says.

Improving services for patients and families in rural and remote locations has been a key goal of the telehealth project since the technology was first acquired by CHEO in January. Members of the genetics team anticipate that the technology will improve accessibility of services, especially for patients and families in Northern regions, such as Sudbury and Thunder Bay, where outreach programs are already in place.

“For many people in Northern Ontario, it’s a day-long drive to a clinic, and even then, it’s an outreach centre that may not have a geneticist on staff all the time,” Dr. Allanson points out.
In many cases, telehealth could reduce these travel times significantly. Eventually, families will be able to connect with experts for diagnosis, investigation, management, or follow-up by simply “plugging in” to computer workstations at their local clinics.

“The technology is especially important to CHEO because of the links we have with the 17 rural hospitals in the Eastern Ontario region,” says Dr. Alasdair Hunter, also a clinical geneticist at CHEO. However, Dr. Hunter points out that for now he would like to see telehealth used as an “add-on” tool for genetic counseling, rather than as a strict replacement for face-to-face consultation and treatment.

One stumbling block is the complex-looking machinery, which can be intimidating to users. Dr. Hunter thinks it will likely take some time for both healthcare providers and families to feel comfortable with the technology and how it works.

“Some patients may be a bit camera-shy,” he notes. “The more ‘friendly’ they can make the technology the better. It has to become as real-life as possible.”

Making the technology more “real-life” is also a priority for participants in the June Rounds. Organizers anticipate that a combination of technological advancement and more experience with the telehealth equipment will foster smoother turn-taking and less formality between the participants.

“We facilitated the rounds as we would a regular meeting, but it would be much more efficient if there were some way participants could let us know when they have something to add,” says Crone. She refers to one participant’s recommendation during the rounds that a game-show style buzzer system be used. “It takes some time to go around to all twelve sites in sequence, and you miss out on conversations when you switch from location to location.”

While organizers iron out the etiquette for telehealth conferences, the Genetics Program is already setting its sights on the next telehealth project: a national curriculum for genetics residents. CHEO and other hospitals are exploring the possibility of collaborating to develop a telehealth-based education system for the small number of genetics residents scattered across the country.

“It’s a reality that our time and resources are stretched. We see a huge potential for telehealth to improve our systems of education,” says Anne Zimak, operations director of the Genetics Program at CHEO.

At the moment, each hospital’s genetics program takes responsibility for developing the curriculum from start to finish – an enormous task to take on for the training of just one or two students at a time. In the proposed plan, each hospital would develop and contribute several modules to the course of study, and residents from various centres could tune in to a different hospital each week.

“A shared curriculum would not only reduce the time and work associated with curriculum development, but it could also form the basis for a national, standardized education program for genetics residents,” Zimak explains.

In the coming months, the genetics team will continue to set up rounds events like the pilot session in June. CHEO organizers anticipate that other hospital-based genetics programs will join the conversation, along with continued participation from the twelve sites that attended this time.

While the national genetics network continues to expand, CHEO’s top priority is using the technology to improve accessibility and service quality for patients and families in the catchment area.

Says CHEO’s Crone, “That’s what telehealth is really about-bringing health care as close to home as possible.”

BACK TO TOP OF PAGE

Baycrest establishes first centre for geriatric knowledge transfer

By David Goldstein, PhD

The recognition that intellectual capital represents the “new wealth of organizations” has not yet had the same dramatic impact on the healthcare sector as it has had on the business and corporate sectors. Yet, in a very real sense, the wealth of a healthcare organization lies as much in intellectual capital as it does in the facilities and equipment found in a traditional healthcare setting. Recognizing this new reality, the Baycrest Centre for Geriatric Care in Toronto has established what is arguably the first Centre for Knowledge Transfer in Canada. The goal of this new Centre is to capture the extensive geriatric and gerontological expertise at Baycrest and disseminate that expertise in a variety of ways to as many audiences as possible.

The value of intellectual capital in healthcare, and in long-term care (LTC) especially, is increasing rapidly. As our society ages – and this is the case in virtually all developed economies – the need for LTC will grow dramatically. Indeed, the staggering cost of LTC for the aging baby boomers of North America has prompted many thoughtful observers to call for new programs and practices that will enable boomers to “age in place” and age in a more healthy and productive fashion than ever before.

This cultural shift from aging as a medical issue to aging as an issue of self-maintenance means that healthcare workers will become, increasingly, knowledge workers. The traditionally corporate-centred challenge of identifying intellectual capital and using it to maximum advantage in the marketplace is rapidly becoming a challenge for the healthcare sector as well.
How do we capture the intellectual capital found in our organizations and how do we use it to maximize the health of our “customers”? Specifically, how does a long-term care organization capture the expertise of its staff – healthcare aides, nurses, geriatricians, psychologists, social workers, and other professionals – and transfer that knowledge to an aging population in the interests of promoting healthy aging? The concern with how to transfer knowledge – both through commercial channels and through “giving it away” – has added yet another term to the growing lexicon of the information age – knowledge transfer.

The Baycrest Centre, an affiliate of the University of Toronto, houses a hospital, a long-term care facility, the internationally-known Rotman Research Institute, and numerous day programs and outreach services. The Baycrest Centre has approximately 1,500 staff and cares for more than 2,000 clients and residents on any given day. Clearly, the amount of intellectual capital in a setting such as Baycrest is enormous and the task of capturing and transferring that knowledge is daunting. How does knowledge transfer work? Can it work for your organization?
In this article, we’ll discuss how an LTC might choose to catalogue, analyze and disseminate knowledge.

Creating a catalogue or a “knowledge inventory” for your organization is the first step. This inventory should include not just a list of programs, services, and products but also an inventory of staff expertise. The inventory of staff expertise could be conceptualized as a form of institutional “yellow pages” – if someone wanted to know something about topic X, they should be able to look in the inventory and find out who on staff is knowledgeable about that topic.

The decision about whether someone is indeed knowledgeable about the topic is sometimes problematic, of course, and different organizations have coped with this in different ways. One option is to allow staff to volunteer this information by choosing to list themselves in a directory of staff expertise.

For example, some universities create a list of faculty and staff who are willing to be interviewed by news media on topics of their choosing. Large corporations, such as BP Amoco, have developed electronic systems of knowledge sharing where employees create their own home page on the company intranet, listing those areas of expertise and experience that they are willing to share with colleagues.

After a catalogue or knowledge inventory has been developed, the next step is to analyze its contents. Are there areas of overlap in staff expertise that could lead to productive collaborations?

Are there gaps in your organization’s expertise that you were not aware of? Are there resources available that staff members do not know about?

How many times have staff developed a document or spent long hours tracking down information only to find out that someone else in the organization had already done the report or had the information in their desk drawer?

It may be the case that your organization needs a resource room or an intranet that would make information more readily available on an “as needed” basis. It is surprising that many organizations would not hesitate to develop and maintain an inventory of equipment and supplies, but have never considered the value of developing and maintaining an inventory of knowledge resources.

At Baycrest we are attempting to go a step farther by capturing some of our staff’s expertise in a series of modules that will then be posted on our intranet. These modules will summarize staff knowledge on roughly three-dozen key topics (for example, memory loss in the aged, how family caregivers of the elderly can cope with stress, and so on.)

With these modules in hand, it is hoped that staff physicians, psychologists, nurses, and other professionals will not be burdened with multiple requests for the same basic information. In addition, these modules can form the “knowledge base” for a variety of other ventures, such as a call-in centre (should one be established), feature articles for newsletters, responses to requests from journalists and students, and the like.

Once your organization’s knowledge has been catalogued and analyzed, the process of dissemination can then be examined. While dissemination can be for either commercial purposes or for public service purposes, we will focus here on the latter process. How does a healthcare organization such as the Baycrest Centre “reach out” beyond its traditional boundaries so that important information about healthy aging can reach as many people as possible?

At Baycrest, and no doubt at other healthcare sites as well, a great deal of knowledge already is captured in one format but is usually not transferred into others. For example, if your healthcare site offers grand rounds or a colloquium series or a workshop, what becomes of those presentations?

Are they captured in some way or are they one-time events, of value only to those who happened to be in attendance? A key principle of knowledge transfer is that rounds, in-service workshops, and other presentations should be captured – and turned into journal articles, summarized on a website or intranet, streamed on the web, or broadcast via telehealth technology. It is unfortunate that many informative and stimulating presentations are delivered to audiences of a few dozen or less when thousands of others could profit from that knowledge.

At Baycrest, a formal Centre for Knowledge Transfer (CKT) has been established to facilitate this process. For example, medical and other staff often make informative presentations at Grand Rounds and in workshops but don’t have time to do anything more with the material. The CKT at Baycrest is, in effect, an extra pair of hands that can help turn the presentation into a journal article, summarize the content for a newsletter or a website, and so on. In addition, new information technologies can be used to augment more traditional ones; e.g., a newsletter can be put on a website as a pdf file.

In closing, one lesson from the Baycrest experience is to value the expertise in your organization. It is probably more extensive than you realized. Capture it, organize it, disseminate it – and both your organization and society at large will be the better for it.

David Goldstein, PhD, is Director, Centre for Knowledge Transfer, Baycrest Centre for Geriatric Care in Toronto.

BACK TO TOP OF PAGE

HOME - CURRENT ISSUE - ABOUT US - SUBSCRIBE - ADVERTISE - ARCHIVES - CONTACT US - EVENTS - LINKS