Insight into spend visibility is essential for decision-making within finance and supply chain in health systems. Spend visibility provides information for leaders to make supply decisions, evaluate their procure to pay processes and gain insight into usage and product waste.
The benefits of spend visibility are endless, but health systems and hospitals struggling to gain true visibility.
Learn why your health system leaders need spend visibility in part one of this blog series.
Health systems create and hold a large volume of data from various sources in various forms. Spend data can be structured or unstructured, dark data, and often rendered invisible by issues due to system controls. It is stored in numerous places such as a hospital’s ERP system, GPO, EDI, or payment systems. Analyzing such dispersed data is complicated and takes manpower and time to gather, report, and monitor to make informed decisions.
True visibility cannot be achieved with missing or incorrect data. Often hospitals make purchases without complete supplier data in their systems. For instance, ERP systems may not contain the contract, TIN, or W-9. Not only does missing data such as this put an organization at risk of payment errors, but it is also difficult to analyze data to draw actionable conclusions.
While inaccurate data can hinder any process or reporting, two notable instances prevent health systems from achieving clear spend visibility.
Data entry is prone to errors, including keying errors and imaging errors. For example, a supplier such as TAG, Inc. could be keyed in various ways such as TAG, TAG Inc., or The Audit Group. Variations such as these contaminate data, expose an organization to payment risks such as duplicate payments and affect spend data and limit visibility.
While data input causes inaccurate data, intricate organizational structures also prohibit spend visibility. For example, large vendors like Cardinal Health have several divisions making it difficult to match an invoice to the correct Cardinal Health vendor entry – especially if different divisions entered using the vendor’s name and no other specifications. On top of that, suppliers often merge or become acquired, causing health system staff to update and consolidate vendors in contracts and ERP systems frequently.
TAG TIP: Read more about potential errors polluting your spend data and causing duplicate payments.
It is difficult to place the responsibility of commodity classification into one person or department’s hands. With so many products and services being purchased across a health system, the classification of many goods is done in error or in a continuously growing category of “Miscellaneous.” Incorrect classification and a list of miscellaneous purchases do not provide accurate visibility into category spend.
TAG TIP: Utilization of classification standards such as G10 and Universal Standard Products and Services Classification (UNSPSC) allows for alignment of product spend across the health system.
Leaders need accurate data to make accurate decisions.
John Weiss, TAG, Inc. CEO
Since cleansing data is labor-intensive and time-consuming, the priority of regular data maintenance often gets pushed to the back burner. This puts them at risk of financial leakage and loss of holistic spend visibility.
TAG TIP: TAG recommends performing a vendor master cleanse every two years while stressing the importance of maintenance between cleansings. TAG also recommends performing an item master cleanse annually.
Ready to cleanse your vendor and item master?
With 30+ years of dedicated healthcare experience, TAG has the expertise to cleanse your data and the manpower to fill in any missing information. Message TAG to get started now.
Without correct and comprehensive data, leaders cannot effectively make actionable decisions.
TAG can help your health system gain spend visibility using its turnkey analysis and expertise in healthcare P2P processes. Get one step closer now by reaching out to learn more.