Aggregate Spend/Sunshine Act: Change is Inevitable….are you ready?

The Comment Period for the Physician Payments Sunshine Act closed last week.  Now everyone is waiting to see how it will play out and what will be included in the final legislation.  We, at Business & Decision Life Sciences are no exception.

In addition to the “nuts and bolts” of the changes i.e. what payments are now to be accumulated, payments made to which parties, how reporting will change, etc., I think it is relevant to consider the impact of change on the organization and the people who are required to incorporate the changes into their routines.  I think sometimes, the focus on the technical elements of change overshadows consideration of the impact of the changes on the people.  If the impact of how the change impacts the people is not considered, success of the change can be limited. 

Change experts often refer to the need to assess where the organization is in terms of readiness to make changes.  I found a great tool that assesses change readiness in the form of a brief questionnaire called The Change Readiness Audit (found in The Change Management Pocket Guide which can be purchased from the authors at http://www.changeguidesllc.com/). It can be used formally as a questionnaire completed by employees or informally as a discussion tool at the management level (don’t forget that input from employees can be very different than management’s perceptions!).

This Change Readiness Audit includes questions that cover a range of sub-areas including:

·         The Vision or Business Case for the change

·         Engagement of resources

·         Leadership involvement and commitment

·         How effective will the implementation of the change be

·         Sustainability of the change

As with many tools, this one can be tailored to fit a particular situation.  Regardless of how it is tailored, once completed, the assessment can help to pinpoint areas that need attention in preparation for the anticipated change, including, but not limited to, those related to the Sunshine Act.

Integrated ERP and CRM in Life Sciences

As many of you all know, over the last few weeks we've organized a couple of webcasts looking at the integration of ERP and CRM systems ("Leverage Your ERP & CRM Data to Make Faster, Smarter Decisions" and "How To Integrate Product, Customer and Patient Data"). This is as part of a series of five webcasts we are running related to enterprise systems.

The last two webcasts have looked not only at the advantages of integrating ERP and CRM systems, but also the use of master data management, business process orchestration and business intelligence tools.

There are some good questions the came out of yesterday's webcast session and unfortunately we didn't have time to answer them all during the live webcast. 

As we promised we've reproduce the unanswered questions and our answers here our blog.

Q. Can you say more about why some life sciences companies are keen to get into healthcare management and what they are doing?

A. We talked about this quite extensively in one about earlier webcasts () but basically were seeing a number of life sciences companies move more into healthcare as they see their traditional profit margins being increasingly squeezed. Moving into healthcare has several advantages such as:

• Opening sources of new revenue
• Ensuring better health outcomes for patients

In the case of this latter benefit this means that patients are more likely to continue using the regulated companies drugs or devices, thereby ensuring an on-going revenue stream. At a time when many payers (whether these are insurers or governments) are increasingly looking to pay based upon results it makes sense for life sciences companies to ensure that patients are complying with their medication regimes and treatment is successful.

In the case of yesterday's webcast were seeing a number of life sciences companies increasingly extend the use of their CRM systems to incorporate the use of patient and healthcare management.

Q. Can aggregate spend reporting be built into CRM systems?

A. It is certainly possible to build aggregate spend reporting based upon information that is held in CRM systems. For small to medium life sciences companies with only a single CRM system, these systems may indeed contain all of the information required to produce accurate aggregate spend reports. However, where there are multiple CRM systems data usually needs to be aggregated across the systems and as we saw yesterday's webcast there are also advantages in terms of integrating information from the ERP system such as cost information and expense data.

For those of you specifically interested in this topic we'll be talking more about aggregate spend in a webcast in the New Year

Q. With such a focus on external patient facing activities, easy ERP system becoming less important?

A. The traditional reasons for implementing ERP systems have never gone away. Those of us remember the days of early MRP and MRPII implementations understand the significant benefits that such functionality brings. For small to medium life sciences companies who do not currently leveraging ERP system there is considerable return on investment from implementing core ERP functionality. This should really be the primary reason for acquiring and implementing a new ERP system.

However, we are seeing ERP systems become increasingly integrated across the enterprise and not just in areas such as manufacturing and operations. While ERP systems are just as important as ever, they are becoming more and more integrated into the enterprise applications landscape.

For a company that has no ERP system implementation of a new ERP system is properly one of the most important things the company can do in terms of investment in IT. However once the basic ERP functionality has been implemented there are a number of additional end to end business processes that can be facilitated by integration of the ERP system and it is perhaps true to say that additional manufacturing functionality may not be the most important extension of functionality.

If you have any remaining questions please do get in touch and for those of you who missed the webcasts the recordings are still available on the Business and Decision Life Sciences website (see Past Events). We do hope you'll be available for the rest of the webcasts where we were looking at some interesting topics such as

• How to leveraged software and system integration activities for cost effective validation
• How to integrate good record-keeping and document management with your ERP and CRM systems
• How to plan for successful ERP and CRM systems as a regulated company