Settlement at Consumption: How Point Of Use Scanning Will Eliminate the Bill Only Mess for the Orthopedic Industry
‘I’ll gladly pay you on Tuesday, for a hamburger today….”
- Wimpy from Popeye
In the orthopedic device industry, sales reps play a well documented and important role in facilitating the logistics for surgery - everything from ordering and managing the delivery of the equipment to supporting surgery to making sure the equipment is reassembled properly after surgery.
While this symbiotic relationship between the device rep and the healthcare providers has helped deliver the best care for patients, it has had some negative business ramifications for device companies. Probably the most pernicious of these is the dreaded “bill only” payment system.
“Bill only” in the orthopedic industry refers to “order/replenish now, pay later”. It is driven primarily by situations where the device rep documents during surgery what was used and then immediately ordering re-stock for sets and trays post-surgery. In this case, “chasing the payment” from the hospital becomes the responsibility of the sales rep. The rep is responsible for documenting what was used, and then responsible for getting payment.
Imagine busy reps, or teams of reps, supporting hundreds of surgeries per month. Then imagine how fast the list of surgeries that need payment chased might grow. Now you understand why this is a burden on the orthopedic device business model. Hundreds of cases might be outstanding and needing payment - case to cash can be terrible, messy and a HUGE financial drain on device companies. And quite honestly its a pain for the field reps and field managers as well. Ask ANY of them.
Sometimes when looking at the problem one industry has, it makes sense to look at how other industries have solved similar problems. In this case, it helps to look at how the retail industry solved a very similar problem to the “bill only” system that plagues the device industry.
How the Cash Register Solved The “Bill Only” Problem for the Retail Industry.
If you had gone to the grocery store a hundred or so years ago, there is a very good chance you went to the store and bought on credit. The stores were small and local, and a running tab on what you used was kept. The store owner would be responsible for chasing periodic payment on “the tab”. Like the device industry now, it was “deliver now, pay later”. And it was horribly inefficient and time consuming.
The invention of the cash register changed all this. The purchasing agreement between business and customer was shifted: It moved to ‘pay at time of consumption” from credit. Implicit in this arrangement is one big understanding: what was being bought, the price and the quantity are all agreed upon by the seller and buyer at the point of consumption. For this to happen there needs to be a “source of truth” at the point of sale. In retail this source of truth was a cash register, and with modern technology the methodology for settling the transaction is point of sale scanning. Its called settlement at consumption.
It is inarguable that point of sale/point of use scanning has been the biggest modern miracle for modern retail in every industry, delivering efficiency and financial benefits for both buyers and sellers.
And it will do the same for the device and healthcare industry. Summate has brought point of sale scanning, the “source of truth”, to the operating room. It provides settlement at consumption. Scanning is 100% accurate, the pricing is 100% accurate, and the PO goes automatically with the order at the end of the case with circulating nurse approval. Everybody wins.
Scanning at point of use in the sterile field will eliminate the “bill only” payment system for the orthopedic industry, benefitting both buyers and sellers.
The Summate ScanTrakker System™ is the cash register for healthcare and orthopedic device industry. Placement of an ScanTrakker at busy customer sites creates incredible advantages for your customer and also for your business efficiency.
It’s time for orthopedic device companies to put Scan in the Plan™.