The Journal of Healthcare Contracting

Name Game... Standard Needed for Product Identification

It seems so simple - assigning every medical product a unique number, recognized and used by all the players in the supply chain. Yet the so-called universal product number has eluded the medical-surgical industry as surely as if it were the Holy Grail itself.
Steve Wigginton, Neoforma's executive vice president, calls it a "social security number for products." And its absence costs everyone in the supply chain dearly, daily.
The lack of such a number means that buyers can't tell how much of a certain product they're buying. Hence they have difficulty standardizing or taking full advantage of contracts. Distributors and manufacturers haggle over the correct amount of rebates owed the distributor, while GPOs and manufacturers have to finesse the whole administrative fee issue.
Not only has the industry found it difficult to implement a universal product number, it has also failed to institute a universally agreed-on classification system, or taxonomy, for products. "Without an absolute identification at the most elemental product level, it becomes difficult to categorize products and sustain that categorization over time," says Wigginton.
All this is not to mention the failure to arrive at a universal system with which to refer to customers, or buyers.
The industry's failure to arrive at standards has created the need for data cleansing and maintenance services, such as those offered by Neoforma and Broadlane. Still, the amount of technology development needed to provide such services is enormous, given the number of providers and sellers in the industry. Far better for the industry to agree on three things:

How to identify buyers.
How to identify products.
How to categorize products.

To be sure, work continues on all three fronts. A variety of organizations are involved, including the Coalition for Healthcare Standards www.chestandards.org, the Uniform Code Council¨, www.uc-council.org, the Health Industry Business Communications Council www.hibcc.org as well as others.

Identifying buyers. The Health Industry Number System, or HIN, is a randomly assigned, nine-character, alphanumeric identifier for each healthcare provider facility in the United States. It is assigned by HIBCC. According to the organization, the HIN system was designed to allow subscribers the ability to customize HIN use with their specific trading partners while still maintaining standard formats the rest of the industry can recognize.
Meanwhile, the Uniform Code Council has established a Global Location Number (GLN) Registry for Healthcare. According to UCC, the GLN is a globally recognized identification number used in the EAN.UCC System to identify legal entities, trading partners and customer locations in electronic commerce activities. Expressed as a 13-digit data structure, the GLN provides globally unique identification of a functional entity, such as a nursing station; a physical entity, such as a warehouse or a hospital wing; or a legal entity or trading partner, such as a specific company or supplier.

Identifying products. A universal product number can be either the UCC/EAN System's Global Trade Item Number (GTIN) or the HIBCC's Supplier Labeling Standard.
HIBCC maintains the UPN Repository, a master catalog of medical-surgical products, which now includes more than 250,000 items. Each product at all levels of packaging is assigned a unique UPN, consisting of either the HIBC-LIC (Labeler Identification Code) or UCC SCC-14 primary data structure. The HIBC-LIC primary data structure includes the manufacturer's LIC, manufacturer-assigned product number, packaging level indicator and a link character. The UCC/EAN primary data structure consists of a packaging level indicator, UCC/EAN manufacturer ID number, manufacturer-assigned product number and a check character.
Meanwhile, the Electronic Product Code (EPC) is a unique number that identifies a specific item in the supply chain. It is stored on a radio frequency identification (RFID) tag, which combines a silicon chip and an antenna. Once the EPC is retrieved from the tag, it can be associated with dynamic data, such as from where an item originated or the date of its production. For more information, visit www.epcglobalinc.org.

Categorizing products. The United Nations Standard Products and Services Code (UNSPSC) provides an open, global standard for the classification of products and services, including medical-surgical products. It is a hierarchical classification with five levels, each with its own unique number. For more information, visit www.unspsc.org. According to UNSPSC, a product and service coding convention does all of the following:
Allows computer systems to automatically list similar products under a single category. When a person is searching for the category, he or she finds precisely the things being discovered and nothing else.
Facilitates expenditure analysis. When every purchase transaction of an enterprise is tagged with a common set of product identifiers, purchasing managers are able to analyze enterprise expenditures.
Brings a measure of control and uniformity for the purchaser. Codes bring a single, uniform view of all expenditures in a Healthcare provider or company. They tie together all departments and divisions, including business functions such as purchasing and settlement.