The Ultimate Item Master: Three Elements of Data Transformation

The item master is the bedrock of a supply chain. Without active maintenance, it can put patient safety and revenue at risk. When correctly maintained, the item master can significantly decrease labor and supply expenses. It can also improve fill rates, increase reimbursements, reduce risk to patient safety, improve analytics and reporting, and lower off-contract and non-file spend.

With the healthcare industry data churn rate at 30% and the average exception costing a hospital a minimum of $7.61 (per 2022 Vizient study), data accuracy requires a strategy focused on data transformation.

Three Elements of Data Transformation

Data Normalization: The selection of standardized descriptive terms that ensures the correct identification of a product and all its related attributes.

Data Enrichment: The addition of key attributes that provide extended knowledge about a product — size, composition, product recall status, GTIN, HCPCS coding, and more.

Data Attribution: The consistent alignment of product data to enable functionally similar or equivalent comparison.

Three Tactical Best Practices for Building the Ultimate Item Master

1. Evaluate the spend and lock it down. Pull a purchasing history report for the past 12 to 18 months and identify the most frequently purchased items — that is the item master foundation. Eliminate items no longer in use, discontinued, or duplicated. Evaluate all items not on contract and understand the average, high, and low price points to inform GPO, distributor, or manufacturer negotiations. Ensure data is cleansed, normalized, and classified by category using UNSPSC, with unit of measure, HCPCS, revenue codes, and GTIN all attributed. Evaluate the data each department can access and create a formulary-driven purchasing process that makes it difficult to order the wrong item.

2. Focus on product description and price. For automation and accuracy, people need to find the right product at the right price. Ensure product descriptions are normalized to a specific standard — ten words is the industry best practice. Identify the correct buy units of measure based on usage by location and verify the correct contract price with GPO, distributor, and manufacturer. Use consistent product classification: UNSPSC and GMDN deliver greater automation and more accuracy than home-grown identification systems.

3. Focus on recalls and invoice matching. Measure the percentage of invoices that accurately price-match. Evaluate lines that do not match and fill in missing billing codes to reduce denied claims — this is always a hard-dollar savings opportunity. Understand whether a product is on recall at the point of purchase, before it hits the warehouse.

Solidifying processes to maintain the item master is part of building the ultimate item master — but so is having a data partner that understands the evolving healthcare landscape. Normalized data is the foundation, but formulary-driven procurement is the key to item master performance.

Genesis Data is built to deliver all three elements of data transformation at scale — across millions of items, 35,000+ vendor catalogs, and nightly FDA recall and GPO contract feeds. Request a free Data Analysis to see exactly where your item master stands today.