Top IDNs and the Challenges of Roster Membership

February 21, 2019 at 2:11 am

Group Purchasing Organizations (GPOs) and Integrated Delivery Networks (IDNs) were created with the specific purpose of reducing operating costs for healthcare facilities by enabling them to negotiating purchasing prices more effectively. But consolidation of GPOs and IDNs across the healthcare industry is leading to changes in how suppliers work with these organizations.

The volume of membership data that has to be processed by pharmaceuticals companies has exploded in recent years. Ninety percent of hospitals in the US work with national GPOs, with an average tenure of 11 years as members. Hospitals route the majority of their product purchases (56 percent) through their primary GPO, and 88 percent of hospitals agree or strongly agree that their GPO generates savings from lower prices, according to a survey by Becker’s Hospital Review published in 2017.

The four largest GPOs, Vizient whose annual spend is $100 billion, Premier, annual spend $50 billion, Healthtrust, annual spend $30 billion, and Intalere, annual spend $9 billion, service close to 400,000 members, according to the survey. Adding to that members of wholesaler and distributor channels, and the amount of roster data that companies must manage becomes a formidable challenge.

IDN Name Member
Member Net Patient
Revenue (M)
IDN Integration
HCA Healthcare205$35,497System II
Universal Health Services176$8,337System II
Catholic Health Initiatives153$16,022System IV
Community Health Systems133$12,885System II
Ascension Health132$17,662System IV
HealthSouth130$2,816System II
Select Medical Corporation110$1,982System II
Tenet Healthcare90$14,228System III
Kindred Healthcare84$2,213System II
Trinity Health74$16,516System IV

Source:Definitive Healthcare

This challenge is exacerbated by the variable quality of roster membership data.
Making use of unique identifiers, with wildly varying formats, duplications, and errors, managing this data also means structuring it for efficient use.
At the same time, compliance issues must also be addressed in the price reporting process.

Outsourcing roster data management provides an efficient solution

Meanwhile the IT Departments at both large and small pharmaceuticals companies are occupied with other priorities,
like establishing data analytics. With resources relatively scarce, asking them to provide time for cleaning,
structuring and managing IDN and GPO roster data would pose additional responsibilities and costs that many are not prepared to undertake.

But, even with the best will to address these issues, in-house IT at pharmaceuticals companies is probably not ready
to provide solutions to these issues. They require expertise in areas most companies do not maintain in-house.
This includes assessing whether there are major data gaps, missing fields, inaccurate numbers, or information that isn’t in
the right format and much more. Once those issues are addressed, the data must be compared with third-party data (available in various forms) for validation.
Each aspect of the pharmaceuticals company’s trade class policies and definitions for assignment must be aligned.

Once the data has been structured, it must be reviewed for duplications and errors.
This is done by comparing HIN and DEA numbers. A DEA Registration Number is an identifier assigned to a
health care provider (such as a physician, optometrist, dentist, or veterinarian) by the United States Drug Enforcement
Administration allowing them to write prescriptions for controlled substances. The Health Industry Number is a unique ID for
identifying all healthcare trading partners -- it was created by the industry as a universal identifier of all partners in the supply chain.

This system should have avoided confusions, but instead sometimes increases it.
Wholesalers, payers, and manufacturers all might be using HIN and DEA account identifiers
differently for sales, chargeback, and rebate data. “Cross-walking” this data to third-party files for verification is,
again, time-consuming and expensive.

Further validation is still necessary. Every pharmaceuticals producer has unique rules for determining which GPOs and IDN’s fit its roster.
Modification of the data in real time should be possible, although this can involve a deep dive into manufacturer rules for acceptance and
the relevant characteristics of the GPOs and IDNs. This involves a lot of know-how that manufacturers may not have accessible in their IT Departments.

The Outsourcing Advantage -- Cutting-edge applications for a comprehensive data management strategy

As pharmaceuticals firms outsource their GPO and IDN roster management,
they can obtain a direct and significant increase to profit from these operations.
Accurate data translates directly into return on investment, because so much time is saved from unprofitable use of the data.

Further, a specialist in this area can add value with data enrichment, making the data more robust and useful.

Outsourcing offers cutting-edge data cleaning and processing applications that enable rapid changes to the roster data set.,
And, because outsourcing providers employ specialized and proprietary know-how, they can provide these services at a much lower cost than any IT Department.

What’s more, the specialist outsourcing provider can help pharmaceutical companies to adapt their IT to this kind of new solution.
Many pharmaceuticals companies do not have this kind of expertise in-house.

For example, contracting applications are complex and often beyond the scope of in-house IT.
Contracting involves the whole range of industry stakeholders, and there are many in the pharmaceuticals value chain.
Managing contracting also involves a slew of different systems and processes. To manage all this, an outsourcing provider can
bring skills and technology to the table that inhouse IT Departments badly need.

To manage operations of this large scope, the most applicable system design and implementation are required.
The outsourcing provider can assist in documenting requirements, configurations, customization,
etc. as well as working with developers to assure the outcomes.

With these skills, outsourcing providers can also help to adjust strategic objectives.
The pharmaceuticals supply chain is complex environment with many established processes and procedures.
Fixing objectives based on clearly quantified impacts is not easy, and the outsourcing provider can help thanks to its long experience and specialized skill set,
providing reliable quantified statements of impact which can be used confidently to make strategic decisions.

Given all the changes that the US healthcare value chain is undergoing,
an outsourcing provider can help with every aspect of data management, offering considerable savings and greater efficiencies to pharmaceutical companies.