Quebec hospitals probe EDI to cure supply chain pain

If a test case at a Montreal hospital goes well this week, 75 hospitals across the province will be moving to an online EDI system to improve supply chain efficiency.

The first hospital to use the electronic data interchange product called MediChain is the McGill University Health Centre. It will replace a paper-based system and is expected to save the hospital about 50 per cent per transaction.

Staff currently have to manage inventory by faxing purchase orders to suppliers, then follow up with phone calls and key in data as it comes in.

“”You know what it is with telephone calls – you end up calling the company, you’re on (voice mail), you have to call back. It’s time-consuming,”” said Carole Duhamel, associate director of materials management services at MUHC. “”All this would be avoided.””

Suppliers would discover similar benefits by switching to an EDI system with the hospital, she said, since the paper trail would end for them as well.

“”It allows them to generate the purchase order and it goes electronically, via an EDI transaction, directly into the supplier’s back office system. In return, the supplier sends them back acknowledgement,”” said Irwin Kramer, president and CEO of iCongo, the Montreal-based developer of the software.

The first supplier to sign on with the hospital is Montreal-based Source Medical. MUHC deals with about 45 others. Duhamel said the hospital is in discussions with many of them, but they will come on board only as their own timetables dictate. “”These companies are international or American and they often need approval from their IT departments. We have to give them time,”” she said.

MediChain will be hosted and managed by iCongo. It will be accessed by the hospital via a virtual private network. Using connectors, it can be integrated into existing software, such as ERP, inventory management and accounts payable.

“”It’s like outsourcing your EDI. EDI is an old concept, but it was very difficult to implement and it never took off in Quebec. With this concept of outsourcing it, we feel it will be more successful in Quebec, because it’s less effort on the part of hospitals,”” said Duhamel.

The software was approved by the Association Quebecoise de la Logistique et de l’Approvisionnement du Secteur de la Sante (AQLASS), which represents 75 health-care organizations across Quebec.

A conglomerate of providers attempted to develop an EDI solution for Quebec hospitals last year, said David Pyper, chair of AQLASS’s EDI selection committee. The effort fell flat due to concerns about return on investment, but there was enough lingering interest in EDI to warrant an investigation into off-the-shelf EDI products.

According to Pyper, the organization recently evaluated six competing EDI products and recommended MediChain to its 75 members.

“”(Those hospitals are) waiting for this pilot to work,”” said Duhamel. “”Once that occurs, a lot of them are already in line to develop a contract too. We cannot impose this, but there’s an understanding that a lot of people will follow suit.””

“”I’m sure there’s going to be some resistance,”” said Pyper, who is also a systems analyst at MUHC. “”Resistance is a risk factor in any such scenario. There’s always people who find reasons why it shouldn’t work.””

Language barriers and difficulty with implementation have made naysayers out of some Quebec hospitals when it comes to EDI, said Pyper, but a successful deployment of MediChain at MUHC should make believers of many of them.

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