The concept of a virtual item master (VIM) is not new, but the pace at which government agencies are working to create, implement, and operationalize a VIM shows how challenging it is to properly build one and start realizing its value.
The VIM is a single source of truth for item and price data that can feed clinical, financial, and operational workstreams. The VIM also increases the visibility of the contract portfolio so requesters do not have to search spreadsheets or disparate legacy systems to determine which contract items they can purchase.
Limiting visibility and access to a specific set of spend categories – typically, only clinical products – is an outdated concept and creates barriers to improving spend-under management. Access to all spend categories in a single platform is critical to driving compliance and utilization as well as reducing friction in the purchasing process.
The Virtual Item Master’s Value
Creating and properly managing a VIM that adopts industry best practices and through which requesters can seamlessly interact using a modernized platform that has a simple UI and UX will empower them with relevant and accurate information that will support their purchasing decision.
The value of a well-managed, enriched, and harmonized VIM with contract pricing provides the ability to shape demand at the point of requisition. It also extends supply chain’s control across an expanding continuum of care (acute, non-acute, clinics, offices, and direct to patient). It also provides the ability to:
- Predict demand based on user patterns and clinical activity
- Match spend to diversity and Environmental Social and Governance (ESG) objectives
- Increase transparency to the contract portfolio
- Operationalize the contract portfolio
- Support standardization and syndication of line-item data to clinical subsystems and business processes
- Share item attributes, metadata, and prices with downstream systems and work processes
Keeping the Virtual Item Master Accurate
The VIM is not a static database of item and price information – rather, it is dynamic and requires close management to keep it accurate and up to date with new agreements and changes to current ones. Organizations that have a large number of contracts should store them in a system that not only can manage large data sets but can also interface with a front-end purchasing system in a seamless and automated way.
The VIM is typically a large data set for most organizations, but that does not mean that all the contract line items in the VIM need to be available to the requester for purchasing. If you can monitor and predict demand based on user patterns and clinical activity, you can determine the right timing to publish a contract.
For example, the VIM may have multiple contracts for the same item, but on different agreements. In this case, the supply chain team can work with clinicians to determine which contract not only meets its needs from a clinical perspective, but also which agreement supports the organization’s strategic goals and objectives pertaining to rebates, tiered pricing incentives, volume commitments, or simply the one with the lowest prices. This type of flexibility and control enables supply chains to be nimble and responsive to shortages and other disruptions in real time without giving up on their strategic goals and objectives.
Shifting the Advantage
Government agencies that embrace the concept of a VIM and work with their acquisition teams to create processes that operationalize it will enable their organization to shift the advantage to the buy side of the equation and give them a better position at the negotiation table when the contract is up for renewal.
Using the right system to support and access the VIM creates a gateway for data flowing into your supply chain and the broker for perfect orders flowing out of the supply chain. And finally, managing and improving this process and the data is the gateway to modernizing the supply chain.
About the Author
Ted Dagnal is the Vice President of Government Strategy at Prodigo Solutions responsible for all public sector initiatives and programs. Ted has been shaping supply chain best practices in the commercial healthcare industry for more than 20 years, working with some of the largest health and research systems in the country. He is passionate about bringing industry lessons learned, as well as more than 20 years of leadership service as a former U.S. Army officer, to actively help government clients transform and secure their supply chains and data in a federal environment.
Ted is leading the effort to rationalize the Supply Chain Master Catalog for the Department of Veterans Affairs to improve their data quality, enrich item attribute information, and improve contract utilization. He also led the FedRAMP authorization and ATO approval process for Prodigo’s Marketplace platform at VA.