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IMA Executive News & Views Blog

Revolutionize Manufacturing with Blockchain

by John Kleb

Sikich LLP is an IMA member…

Blockchain is yet another—excuse the pun—link in the Internet of Things chain that can set manufacturers to outpace their competition. Whereas the Internet of Things connects equipment to the business network and thus to mobile devices, blockchain can take this connectivity one step further. In particular, blockchain can revolutionize how manufacturers manage their supply chains.

Blockchain is a digital ledger technology that can store and record transactions. It’s most commonly recognized as Bitcoin and other cryptocurrencies. However, blockchain doesn’t have to be a cryptocurrency, like Bitcoin. Many industries are already finding applications for it, and manufacturers are only just coming around to the idea for coordinating their supply chains.

BLOCKCHAIN BRINGS TRANSPARENCY AND ACCOUNTABILITY

A manufacturer’s supply chain is often vastly complex, which can make complete transparency challenging. It’s especially challenging when the manufacturer builds and ships new equipment as well as service parts. By entering in each transaction of the supply chain into the blockchain, everyone across the company can see the status of each and every part coming in to the factory. This way, the finance department knows when it’s time to bill for services. Various production departments know when they can proceed with their portion of the order. Most importantly, customer service can easily tell customers the status of their orders.

In addition, the transparency makes it even easier to track down faulty parts. If a company learns after the fact that a part installed in their equipment is faulty, they can look at the blockchain to learn two things almost instantly:

  • which supplier is responsible for the faulty parts; and
  • which customers have the faulty parts.

From there, the company can immediately notify their customers of the problem and bring them in for replacements before they even have a problem. The company can also contact the problem supplier without a delay due to time tracing the source of the parts back to suppliers. As a whole, this process is far more efficient and far less costly thanks to the blockchain tech.

BLOCKCHAIN DOWNSIDES FOR MANUFACTURERS

This tech is still fairly new, and the application possibilities for manufacturers have not fully been explored. It’s early, meaning first-movers will see varying results without crystal clear strategy and long-term vision.

Also, manufacturing firms still using “legacy” ERP systems instead of the cloud will have to completely reorganize their company infrastructure. Since these older systems were created before all this came to pass, that could be a costly endeavor.

That said, however, it will be the manufacturers who embrace new technologies that will outpace their competition by a mile. It may be in its infancy stage and still evolving, but manufacturers that join in before it evolves will be the ones standing out from the status quo when new features and applications evolve.

There’s no time like the present to look into leaving the legacy systems for a complete digital transformation.

 

To view the original article, click here.

 

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WELLNESS

 

CMS Commits to Bundles

by Eric Rogers

BKD LLP is an IMA member…

On January 9, 2018, U.S. Department of Health & Human Services Secretary Nominee Alex Azar made a statement that significantly advanced the payment reform movement. Azar said innovation efforts between providers and the Centers for Medicare & Medicaid Services (CMS) should continue, and even be mandated, if voluntary efforts fail to provide sufficient data to test transformation. The CMS quickly took an opportunity to follow Azar’s confirmation hearing by announcing the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced). The program is structured similar to the BPCI and Comprehensive Care for Joint Replacement (CJR) programs and offers acute care hospitals and physician group practices an opportunity to receive gainsharing payments by successfully coordinating care and reducing CMS expenses incurred during the episode.

Key Considerations

  • There’s only a two-month application window from January 11 to March 12, 2018
  • Claims data and target prices will be provided after the initial application is submitted
  • The program begins October 1, 2018, and continues until December 31, 2023; a second application period is slated for January 1, 2020
  • The program is a retrospective bundle, meaning fee-for-service payments will continue under current methodologies for all providers, i.e., hospital, home health, skilled nursing, Part B, etc., and the episode will be reconciled semiannually against target prices to determine gains or losses
  • Participants can select their own bundles from the following:
    • 105 Medicare Severity-Diagnosis Related Groups will be grouped into 29 inpatient episodes to choose from
    • 30 Healthcare Common Procedure Coding System codes will be grouped into three outpatient episodes to choose from
  • BPCI Advanced will qualify as an Advanced Alternative Payment Model under the Medicare Access and CHIP Reauthorization Act of 2015
  • There will be a 20 percent stop gain and 20 percent stop loss provision to limit excessive earnings and losses
  • The reconciled payment amount will be adjusted with quality indicators

 

To view the original article, click here.

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