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Rapport EUROHCS, European Hospitals and Clinics supply

On trouvera ici le rapport de conclusion du programme européen Tedis - Eurohcs consacré à l'informatisation des procédures d'achat hospitalières. C'est l'exemple de ce qui pourrait être rapidement généralisé dans les pays européens si, comme le soulignent  les rapporteurs, une volonté politique forte soutenait les projets de commerce électronique dans le domaine de l'achat public :
If no big push is given to Electronic Commerce for public procurement at the higher political level of decision, at the time that the EURO is about to be put in circulation, there is a risk that Electronic Commerce will principally benefit to US companies.
Baquiast 25.03.1998

magda.van-noordenburg@sap.ap-hop-paris.fr
Cc: jean-francois.penciolelli@sap.ap-hop-paris.fr

25 Mars 1998

Suite à une demande de M. Jean-François Penciolelli, j'ai le plaisir de vous envoyer ci-joint le rapport final du projet EUROHCS, mené dans le cadre du programme TEDIS de la Commission Européenne.

Ce rapport est constitué de deux parties : une présentation générale du projet, avec notamment les difficultés rencontrées lors du développement et la mise en place d'un système harmonisé pour l'approvisionnement des hôpitaux par EDI, et une partie consacrée aux expériences des différents sites pilotes de nos partenaires européens.

Vous pouvez, si vous le souhaitez, publier la première partie du rapport
Magda van Noordenburg

Assistance Publique - Hopitaux de Paris
D.E.S.I., Service Etudes  
3, avenue Victoria 75100 Paris R.P., France
Tel.: +33-1-40.27.56.90
Fax: +33-1-40.27.30.90
E-Mail: magda.van-noordenburg@sap.ap-hop-paris.fr

EUROHCS

EUROpean Hospitals and Clinics Supply

FINAL REPORT

december 1997

THE EUROHCS PROJECT

Scope of the project

EUROHCS is an acronym which stands for EUROpean Hospital and Clinics Supplies.

This project had the ambition to establish the framework of a European electronic system for procurement, logistics and material management of products, goods and services in the healthcare domain.

The intended users of the system were the manufacturers and the distributors of products, goods and services on the one hand, the healthcare service providers, in particular public and private hospitals and clinics, on the other hand. Electronic commerce for pharmacists and individual healthcare professionals was not included in the scope.

The project had to develop pilot sites on a national basis, but it was clear that these pilots were all supposed to follow the same basic principles of implementation and involve, as far as possible, the same suppliers, especially those which have a multinational activity.

In order to elaborate these basic principles, a co-ordinated activity was at the core of the project, under the responsibility of the Prime Contractor - Assistance Publique - Hôpitaux de Paris, which had designated Jean-François Penciolelli as the EUROHCS co-ordinator.

The EUROHCS project has been managed within the framework of the TEDIS programme of the European Commission (1987-1994).

The partners

A first phase of this project had involved four countries, and one partner for each of these countries namely:

· France: Assistance Publique - Hôpitaux de Paris (prime contractor);

· Spain: Consorci Hospitalari of Catalunya;

· Denmark: a software company having outstanding achievements in health-care computing, Kommunedata;

· Netherlands: SIG Services b.v., a non-profit organisation developing services and computing solutions for healthcare institutions.

At the occasion of the kick off meeting of EUROHCS phase one, the officers representing the TEDIS program suggested that a second phase of this project could be presented for additional funding, in consideration of the importance of the project, directly related to the importance of the healthcare sector - in terms of social impact as well as in terms of budget.

According to this suggestion, the initiators of the project presented a second proposal, which purpose was firstly to enlarge the scope of the project (more sophisticated EDI scenarios) and secondly to involve more European countries.

The second phase of the project had been accepted, and the new partners included:

· France: a second consortium of 74 hospitals, the SIRIF (Syndicat Interhospitalier de la Région Ile de France);

· Spain: a hospital in Madrid, the General Hospital Mosteles, playing a leading role in the healthcare sector and having thus a demonstration effect;

· Germany: three healthcare institutions, Institut Reinbeck e.V., the Justus Liebig University of Giessen and the Medical University of Lübeck;

· Austria: the EDI organisation Austriapro and the hospital Stockerau;

· EMEDI, the Pan-European user group for EDI in the healthcare sector.

The partners agreed that the suppliers to be involved in the project would be selected by each entity responsible of pilot sites, due to the obligation to determine locally which suppliers would be ready and willing to participate in these pilots. However, it was recommended to select, as far as possible, subsidiaries of the same companies.

Time scales

According to the terms of the contract with the Commission, the EUROHCS initiative had to be developed in several European countries in a context which had to fit with national exigencies, in particular those imposed by the public sector where the hospitals belong to, more or less regulated by the Ministries of Health and governed by the very specific rules of public expenditures.

For this reason, and due to political interference regarding the use of information technologies in hospital computing, it has been difficult to respect the initial time scales.

Delays were obtained from the Commission in consideration of the reasons justifying these delays.

Other factors have delayed the progress of the project, without prejudice for the final achievement of the pilots.

During the phase 2 of the contract, the initial German partner of the EUROHCS project cancelled it's participation because the organisation was faced to the necessity of reengineering totally it's core application. This unpredictable event was not compatible with participation in the EUROHCS project, and the partner preferred to withdraw. Further to their suggestions of potentially interested partners, three German healthcare institutions, the Justus Liebig University of Giessen, the Medical University of Lübeck and Institut Reinbeck E.V. became successfully involved in the project.

Also during the phase 2 of the project, the parliament of Lower Austria decided to introduce the service oriented cost system for all hospitals. During four months, all other initiatives were delayed.

With the permission of the European Commission, it has been acted that the project needed more time to develop and implement it's EDI solutions.

THE EXPERIENCE OBTAINED

Despite the usual difficulties encountered by ambitious projects such as EUROHCS, this project has been very useful to all the involved partners and it will continue after the termination of the contract with the European Commission.

The difficulties that the project met - both at a European and at a national level - are worthwhile to mention, since they indicate what the barriers are to a European electronic commerce system for hospital and clinics supplies management.

A consensus on how to proceed

The project revealed a large consensus between the EUROHCS partners regarding the basic assumptions that such a European system should fulfil.

Firstly, all partners agreed that using electronic commerce systems to manage the procurement activities of hospitals and clinics, including stock replenishment, logistics and materials management, makes sense, i.e. they are convinced, from their experience, that it will generate short term returns on investments provided that the involvement is obtained of a sufficient number of partners on each side (hospitals and clinics on the one hand, suppliers and logistics services providers on the other hand). The critical mass is needed to obtain return on investment.

We are here faced to a classic problem summarised by the metaphor of the chicken and the egg . Who will start? According to us, the starter should be the hospital and the decision should be taken at the level of the European Commission. This point is discussed later in this report.

Secondly, there is a large consensus on how to develop electronic commerce systems for hospital supplies management.

Electronic commerce messages

During the first phase of the EUROHCS project, the EMEDI organisation has developed a first set of EDIFACT messages for hospital supplies and which has been examined by the EUROHCS project. It appeared quickly that the use of the set of EDIFACT messages developed by the EAN organisation for the distribution sector (known as EANCOM messages) could satisfy the needs of hospitals, provided that some adaptations of these messages were made. Another advantage of these EANCOM messages is that they are available in the national language and customised to national requirements.

Identification of hospitals within commercial EDI messages

It has been recognised that it is necessary not only to uniquely identify healthcare structures in electronic commerce systems, but also to identify their subdivisions, in particular those where products are being delivered. Ideally, a directory of these entities (hospitals and their subdivisions) should be available and organised at European level, using the X500 standard and its simplified protocol (LDAP). Some hospitals in Europe, for example in Germany, are perfectly satisfied with the use of the EAN International Location Numbers, whilst other hospitals would apparently prefer to, or are compelled to, use identifiers established by authorities such as the Ministries of Health.

Identification of products

Automatic identification of goods and products is considered as an indispensable tool of electronic commerce. It helps the matching of the information flow with the flow of goods and products, and it is a real necessity for good materials management, not only between buyers and suppliers but also within each category of these partners. There is a large consensus concerning the use of EAN systems for automatic recognition of goods and products, provided that EAN takes into account the very specific needs of hospital supplies.

It is worth to mention that in some countries pharmaceutical product labels are made with proprietary standards (in France for instance), while in other countries EAN codification is used for these same products. It will be necessary to analyse this issue more thoroughly (as has been done for France in the last intermediary report of EUROHCS), to understand how it will be possible to reach an agreement on harmonisation of codification of pharmaceutical products at a European level.

Electronic catalogues

The importance of electronic catalogues for product ordering by hospitals is generally accepted. This is mainly an achievement of the EUROHCS pilot developed in the Netherlands, which concentrated on the subject of correct product data (electronic catalogue). The use of the Internet will probably be an efficient means of disseminating product information (electronic catalogues), although this does not preclude the use of EDIFACT messages. In fact, EDI and Internet have to be intimately associated, and different techniques can be combined to compose a global system which deserves the label of Electronic Commerce, using EDIFACT and Internet techniques between the partners. This leads to the next item of agreement.

EDI and Electronic Commerce

The concept of EDI has to be part of a new paradigm, Electronic Commerce. EDI is the means to exchange blocks of information, agreed on beforehand, related to a particular business need associated to a business practice. EDI is more applicable to Business to Business information exchange than to Business to Consumer. EDI solely does not cover all the needs of the commercial partners. The exchange of unstructured information by means of electronic mail systems and the use of Internet WEB based techniques, are necessary to guarantee the success of the automation of the supply processes in the healthcare domain.

The evolution of the techniques on which electronic commerce is based, in particular for the EUROHCS partners, occurred during the last phase of the project, in particular during the year 1997, and this evolution is still in progress under the auspices of the CEFACT.

EDIFACT and Internet

While some experts are announcing that EDIFACT is a standard without a future and that it will be replaced by more modern techniques, the conclusions of the EUROHCS project are quite different. EDIFACT based solutions are the reality of today, and they offer outstanding features when they are sensibly applied and when efficient solutions are used. Too often EDI systems are developed using insufficiently qualified software. The EUROHCS project has produced a document describing the minimum set of specifications for a good EDI systems (gateways and client software well suited for small entities participating in the project). The market provides such solutions, at a reasonable cost. A factor of success of EDI applications lies in the choice of appropriate solutions. It is not correct to depict EDIFACT as a complicated standard when the problem comes from the inadequacy of the solutions integrated.

Moreover, today, EDIFACT and HTML can be easily combined in harmony, which allows companies to deal both with business partners with whom strong links have been established (plain EDI between applications) and with business partners with whom weaker links are established.

In addition to the possibility of working simultaneously and coherently with EDIFACT and HMTL, EDIFACT experts are working on future versions of this standard which will take benefit of the new standard for WEB systems, namely XML.

The XML/EDI working group has made proposals which are promising in terms of new and more sophisticated EDI solutions based on future versions of EDIFACT.

EDIFACT has established firmly a great deal of business practices, which can now be used to stabilise electronic commerce relations, which is definitely a real business need because, in the short and medium term, applications cannot be adapted permanently.

Lastly, EDIFACT message implementation guidelines - when correctly produced - incorporate business rules which explain all requirements that each occurrence of a message type must satisfy; efficient EDIFACT solutions do comply with these rules and the progress permitted by the use of XML (see the XML/EDI contribution) can be easily taken into account by the EDIFACT community, provided that this community accepts to incorporate possible enhancements of this standard. Such an evolution would be preferable to the situation which would not take into account all the progress made by EDIFACT, the importance of the installed base and the services rendered by the efficient tools based upon EDIFACT. There is no reason why this standard should not be able to evolve.

Barriers to overcome

The deployment of a European procurement and logistic solution applied to hospitals and clinics supplies has to overcome three categories of barriers.

Difficulties to involve suppliers

As mentioned before, the intention of the EUROHCS partners was initially to find a limited number of international companies, of which the national subsidiaries would have been associated in each country to the pilot experimentation.

In this way, it would have been possible to obtain a global view of the situation of these companies confronted to these experiences, and to take into account their requirements for harmonisation.

The hospitals involved in the EUROHCS pilots usually do not exchange information neither with other hospitals, nor with suppliers established in countries other than their own. It is therefore impossible to obtain requirements for more European harmoni-sation of business practices from the hospital side.

When the partners of each EUROHCS pilot site were reviewed, it appeared that some company names were often mentioned, in particular Johnson & Johnson, Baxter, 3M Healthcare, or more generally speaking US companies.

In general, European suppliers have been reluctant to participate in the pilot experiences, with noticeable exceptions (Mölnlycke for example).

The EUROHCS partners have contacted European professional organisations of companies involved in hospitals supplies, with the idea to associate them in the project.

The EUCOMED organisation (European Confederation of Medical Devices Associations) has answered the letters sent by the EUROHCS co-ordinator and expressed its theoretical interest in the project. A meeting of one day has been organised in the EUCOMED premises in Brussels.

However, no concrete support has resulted from this, despite positive contact with EUCOMED, probably because the organisation estimated that the hospitals involved in the EUROHCS project had limited strength and negotiation power.

Regarding the European Federation of the Pharmaceutical Association (EFPIA), the letter sent by the EUROHCS co-ordinator was not even answered, and no contact has been established.

Contacts with individual pharmaceutical companies in favour of the establishment of a European system, gave information which might explain the attitude of the EFPIA. The pharmaceutical industry is involved in national EDI systems, mainly used for the management of supplies between the pharmaceutical industry and the wholesalers which supply individual pharmacies. These systems have no links with hospitals or are not well suited to work with them, due to the large number of different commerce links where hospitals have to deal with. Hospitals cannot accept a different, proprietary, EDI system for pharmaceutical supplies only. Therefore, the pharmaceutical industry would have to accept less proprietary systems and organise a migration towards open systems. Another reason has been put forward: it seems that prices of pharmaceutical products differ notably from one European country to another, and suppliers would fear that a European systems would reveal this situation and stimulate bargaining. It would be useful to analyse this situation more precisely in order to estimate the importance of these barriers and take proper initiatives to overcome them.

Difficulties to involve hospitals

The authorities which supervise the management of public hospitals, namely Ministries or local authorities, have not always recognised the interest that lies in electronic commerce for the management of hospital supplies.

Supplies management is often seen as an ancillary activity, and more attention is paid to activities directly related to healthcare applications. Whilst it is legitimate to consider that hospitals are basically dedicated to healthcare provision, it is not exact to infer that only healthcare related activities are the sole ones that deserve attention.

As any other activity, healthcare provision consumes resources and produces services and - in some cases - products. Therefore, a hospital has to be managed efficiently. When attention is paid to the resources that a hospital buys to incorporate them in the provision of healthcare services, it is clear that the part of the budgets devoted to hospital supplies requires a sound and economic behaviour.

Building a reporting activity upon an electronic commerce system which provides aggregate information on the way money is spent for all products incorporated in the healthcare delivery process, is highly recommended. Such aggregate information can reveal opportunities to cut costs and to evaluate the efficiency of the ordering process. This is amongst the goals and the results of an electronic commerce system. The rationale of such reporting systems is clearly demonstrated by an EMEDI/EUROHCS document produced recently (EDI Implementation Manual for Hospitals Logistics, May 1997).

The fact that EUROHCS did not succeed in convincing ministries to support officially this project is not surprising, since there is no commitment at national level regarding public procurement and supplies management by means of electronic commerce (exceptions are Sweden and Denmark), and no real overall European project of this kind exists.

In particular, the European SIMAP initiative is a very restricted one, limited to the electronic collection of call for bids and tenders for their insertion in the diaries legally announcing them according to the European regulations of the public contracting behaviour.

In contrast with the situation observed in the United States, the administrations in Europe do not play a leading role in the introduction of electronic commerce practices in the member states. Even when such initiatives exist, they only affect the national level and do not pave the way for the harmonised practice of electronic commerce at a European level.

In other terms, the addition of initiatives in each country, initiatives which are still insufficiently promoted, do not result in the elaboration of a global system which would define the generalised practice of electronic commerce techniques:

· by almost all companies supplying public administrations,

· using open and standardised solutions applicable at least within the whole European market,

· and paving the way for the practice of electronic commerce between companies for activities involving other buyers than public administrations.

Difficulties in pilot experimentation

Some minor difficulties have been observed in the pilot experimentation, but they were not the consequence of the techniques of electronic commerce as such, but rather a consequence of the condition in which the applications of the partners were, before considering their use in conjunction with an electronic commerce system.

CONCLUSIONS AND RECOMMENDATIONS

Despite the problems encountered, the EUROHCS partners have learned a lot from the project in which they participated thanks to the funding obtained from the European Commission.

The contacts taken from the beginning of the EUROHCS project with the EAN numbering organisations, both at the national and at the European level (EAN International) have been very fruitful. EUROHCS has been in phase with an initiative taken by EAN International to promote the use of electronic commerce systems and efficient consumer response for the management of healthcare supplies, called Healthcare Collaboration Project.

This EAN initiative offers the opportunity to balance the ongoing activity in the United States regarding the development of electronic commerce for hospital supplies. Europe will thus be in a situation of negotiation if, and this is not impossible, hospital supplies follows parallel lines in all countries of the world.

The credibility of the EAN work is assessed by the quality of the documentation produced to improve administration, logistical and supply processes in the healthcare domain. As a result of the first phase of the Healthcare Collaboration Project, a document has been produced called Bar Codes & EDI for healthcare providers. The EUROHCS partners have been associated to the production of this document, bringing their own experience to the collective work.

EUROHCS partners have confirmed their willingness to continue to exchange their views and their experience after the conclusion of the project (in fact after the conclusion of the contract with the European Commission).

On the other hand, EAN International is interested in involving in it's Healthcare Collaboration Project, hospitals which have - although a limited, at least a concrete - experience of electronic commerce applied to the management of their supplies.

In consequence of that, an agreement has been signed between EAN International and EUROHCS, according to which the EUROHCS partners will continue to co-operate in the framework of this project.

EAN and EUROHCS will mutually benefit from this agreement, the former having a liaison with a group of hospitals located in different countries and real life experience, and the latter having an organisation where expertise, methods and tools for implementing electronic commerce systems can be found.

In the framework of it's Healthcare Collaboration Project, EAN brings together companies and organisations such as EUCOMED (the European Confederation of Medical Devices Associations), EUROHCS, HOPE (Hospitals for Europe), EAHM (the European Association of Hospitals Managers), the Standing Committee of European Doctors, EMEDI (European Medical EDI),....

The willingness of the EUROHCS partners to commit themselves to the work co-ordinated by EAN does not preclude their support to their own associations of electronic commerce users.

Finally, the EUROHCS partners are convinced that this project has been useful for the promotion of electronic commerce in the healthcare domain.

But it's limited success in real implementations leads them to address a recommendation to the European Commission.

Whatever the success of the co-ordinated activity of a group of hospitals like in EUROHCS may be, and whatever the expertise acquired in the framework of the EAN project dedicated to healthcare electronic commerce systems may be, it remains clear that few convincing results will be observed unless there is a real commitment of the hospitals managers in favour of the use of electronic commerce for the management of hospital supplies.

This commitment does not seem possible if the authorities which define the healthcare policy in each member state (in clear the Ministries) and at the European level, do not support or, preferably, give the right impetus to an initiative which goal would be to develop steadily electronic commerce for hospitals supplies. The purpose of such a system would not only be to use this technique as a means to manage correctly the process of supplies, but also as a means to spend sensibly the budgets dedicated to the healthcare expenditures.

The commitment of the Ministries of Health itself is depending upon the development - at the European level - of a larger programme promoting the use of electronic commerce in all European administrations for a large percentage of their expenditures, exactly as it is done in the United States.

Such a programme should have the goal to harmonise the practice of electronic commerce at the European level, in order to have national systems that do not suffer from incoherence, which would not be a good result for European companies.

If no big push is given to Electronic Commerce for public procurement at the higher political level of decision, at the time that the EURO is about to be put in circulation, there is a risk that Electronic Commerce will principally benefit to US companies.

index "banque d'idées"
index du rapport