Read the transcript of this interview below:

I’m Scott Koegler, at GS1 Connect, for 2012.  I’m here with Michael Innes and we’re going to talk about health care, EDI, GS1, the standards, implementations and I think I’ve said everything I know about what you’re going to talk about.

Michael Innes:  Fantastic!  So as I mentioned, Kaiser has been on this journey to adapt to GS1 standards for about 18 months now.  We think that standards are critical to not only our basic supply chain processes but addressing a lot of issues that face health care today.  So, health care as a whole has double digit growth on cost curves.

Scott Koegler:  Right.

Michael Innes:  They also have diminishing Medicare and Medicaid reimbursements; so top line is getting affected.  We also see a lot of things coming out of the recent health care reform legislation, like accountable care organizations which basically are reimbursement rates to prove that care that we’re delivering is providing a certain level of outcome.  Kaiser really wants to take the data that’s inherited into a basic supply chain process and add more value to it; deliver it down to the point of care so clinicians can use it and it has a life beyond what is currently being looked at today. 

Scott Koegler:  So the challenge isn’t just bringing that data in, obviously standardizing it prior to receiving the data; and then the systems that handle that.  What kind of challenges are you seeing with those internal systems?

Michael Innes:  So internally within Kaiser, there are a lot of business processes which support the clinical side.  So we often see there is a need to, first of all, understand the different systems; there are scheduling systems for our patient rooms; there are revenue systems; there are patient record systems and at the end of it, there is also basic ERP, which handles our procured repair basic business functions.  So one of the big challenges we’ve had was:  A. Understanding what systems support what processes; and then taking that and understanding how do we move the data; the G10, the GLN; those components of GS1 into our system and have it feed everybody these other pieces that is so integral to making these other pieces work.

Scott Koegler:  So Kaiser Permanente is a single organization but I have to imagine there are multiple systems even within the same discipline?

Michael Innes:  Yes.  Kaiser Permanente is the largest, they call it integrated delivery network, or IDN in the nation.  So it has over eight million members that we service; revenues in excess of $60 billion; it’s made up of about 36 unique hospitals; 500 medical office buildings and a various number of office and back office types of functions as well.  So, inherent to each one of those businesses, they may have just a slightly unique different system or configuration which makes pushing a standard out from a centralized location, a challenge, but we are working on it.  And I think the value proposition that we have is really the need for this standard.

Scott Koegler:  In general, are you approaching this from a systems point of view in replacing systems; modifying?  Are you going toward a common standard set of applications and kind of following that?   Are you looking at systems like SAS or cloud base to give you kind of like a central overview of central repository; that kind of thing?

Michael Innes:  Yeah, so we are looking at cloud based applications and we also chose to support GS1 standards because the fact that their infrastructure was also partially cloud based.  We saw that as being able to leverage some of our current applications and also the general movement toward a cloud based environment.

Scott Koegler:  That’s obviously not a short term proposition?

Michael Innes:  No. 

Scott Koegler:  No.

Michael Innes:  It has to demonstrate a specific ROI as well as not disrupt operations.

Scott Koegler:  Is there one specific point that you’re driving to at the moment?  Is there one main objective in this project over all?

Michael Innes:  Yes.  The strongest value proposition we have had, we started with a typical inventory ROI that we felt GS1 standard could provide.  That’s generally accepted, but when we got into the clinical world and addressed some of the problems that our clinicians had with simply scanning an item, something that you take for granted in the grocery store everyday, and all the clinicians had either gone to the store the day before or the night of, and they are wondering why, as a supply chain organization we can’t provide an environment and capability to have that ease of scanning.  There’s multiple barcodes on a package, and if they are lucky enough to say, scan the right one, will the data be synchronized in our item master to pull all the relevant information; descriptions, unit of measure, price; all of which populate the health record.

Scott Koegler:  Right.

Michael Innes:  If we saw that GS1 provided the most value and had the most traction in the industry.  And we also looked outside the industry.   We like to take best practices in retail and consumer packaged goods in food services, grocery; and so all that being considered, that’s the prominence standard that we are going to adopt and have been adopting; and really wrapping it in the context of facilitating bar coding.  So we started at the point of patient care and really driven our manufacturers to understand that they really need to put a GS1 standard bar code on a package to enable our clinicians to scan it.  Then we have all the infrastructure behind it to support that and we begin to come a step closer to the grocery store model, which is what I consider very efficient in that area.

Scott Koegler:  Right.  So down to unit level?

Michael Innes:  Yes.

Scott Koegler:  Great!  Well you certainly have your work cut out for you.

Michael Innes:  I do.

Scott Koegler:  That’s a good thing.

Michael Innes:  Yes.

Scott Koegler:  Well thanks a lot for your time.

Michael Innes:  Thank you for having me.