Integration's A Priority For Cardinal Health

When nurses at the University of California San Francisco Medical Center remove medical supplies or drugs from dispensing cabinets on patient floors, the transaction automatically kicks off a number of electronic interchanges. The removal of the drug or bandages gets recorded in the medical center's patient billing and inventory systems. If the use of the drug or bandage brings that floor's inventory for that product down to a certain level, a reorder is electronically sent to Cardinal Health Inc., UCSF Medical Center's surgical, medical, and pharmaceutical distributor. A replenishment from Cardinal is delivered by the next day.

Through this integration and collaboration, UCSF Medical Center over the last couple of years has eliminated millions of dollars in inventory that it would otherwise need to store, says John Cunningham, director of the medical center's materials management. And by automating and integrating these processes, the health-care provider has also eliminated time, paperwork, and errors that were inherent in its previously manual materials-management processes.

"The returns of this just-in-time materials management are significant," Cunningham says. By freeing up nurses and other clinicians from counting inventory and reordering stock manually, providers have more time at the patients' bedsides. "It reduces errors, and it closes the loop in supply-chain processes, billing, and accounting. It's all more efficient," Cunningham says.

While many health-care providers continue to struggle to electronically share clinical data, distributors of medical products such as Cardinal Health are helping many hospitals and other providers better manage their supply chains and everything that goes along with those processes. The ultimate goal is to improve patient safety through the elimination of errors.

In addition to Cardinal Health's LogisticSource materials-management services used by UCSF Medical Center, the $51.1 billion-a-year health-products and -services distributor has an array of other integration offerings in its technology-driven OneSource suite. These include the recently introduced ProcedureLink, which lets hospitals electronically and automatically coordinate surgical, medical, and pharmaceutical supplies needed for individual patient procedures; and SafetySource, which helps improves patient safety by integrating information related to drug prescribing, ordering, dispensing, and administering, as well as patient monitoring.

"Integration and collaboration gets to the fiber of what we're all about," says Dr. Bruce McWhinney, Cardinal Health's senior VP of clinical affairs. "We work with customers to accommodate their needs so they can collaborate internally and with us," he says.

Cardinal Health's products and services are aimed at helping health-care providers better integrate their own internal systems such as lab, pharmacy, and scheduling systems, which are often internal silos, says Cardinal Health CIO Jody Davids. But the company also is placing a major emphasis on getting its customers connected with Cardinal's systems to facilitate more efficient and accurate supply-chain management.

Cardinal's repertoire of products and services has grown in recent years through the acquisition of a number of best-of-breed companies, including Pyxis, a manufacturer of automated drug and supply dispensing units such as those being used at UCSF Medical Center. As a result, Cardinal is no stranger to integration efforts: It has been melding its internal systems with those of the companies it has acquired so that customer relationships are simpler and more efficient.

"We do our own integration from a customer perspective," Davids says. "We want customers to feel they're doing business with one company." Cardinal Health also takes care to serve its health-provider customers based on their specific needs, whether they're clinics, nursing homes, rehabilitation centers, or hospitals, and whether they're independent organizations or part of a large chain. "Health care is a very fragmented industry," Davids says.

Over the last year or so, Cardinal Health has continued to make it easier for customers to buy from its many different businesses, Davids says. For instance, through improvements to Cardinal.com, the company's E-commerce portal, customers can order products online from multiple Cardinal businesses, yet receive a single order and invoice. A dashboard feature was recently added to the portal, allowing C-level health-care executives such as hospital CEOs and CFOs to better track their spending (see "Tech Innovation Keeps The Doctor In," InformationWeek, Sept. 22, 2003). This all helps in the company's mission to present a more integrated face to customers, Davids says.

Over the last 12 months, Cardinal also launched a Web-based products outlet store that lets its warehouses auction inventory overstocks and slow-moving items to other companies. "We offer our customers flexibility and scale," says Jim Egan, Cardinal's senior VP of information technology for its pharmaceuticals-distribution business. "We'll do anything to accommodate their specific integration needs."

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Illustration by Brian Stauffer