A UNSPSC Success Story

Ministry Health Care
Milwaukee, Wisconsin

Ministry Health Care is a values-driven health

Ultimately, MHC selected a leading materials

care delivery network of aligned hospitals,

management system and the need to moveclinics, long-term care facilities, home careahead on a common classification wasagencies, dialysis centers and many otheraccepted. The ensuing investigation revealed

programs and services in Wisconsin andthat the UNSPSC was available as an option

Minnesota.

and appeared to be a viable solution based on
use by others and its positioning as an “openMinistry Health Care collaborates with variousstandard.” Initially the goal was to start at thehealth care providers to offer high quality,

product Segment level and work down to thecompassionate care. The Ministry Health careCommodity level.

network features one of the leading tertiary
hospitals in Wisconsin, Saint Joseph's Hospital

The UNSPSC was accepted, downloaded, andin Marshfield, and provides quality health careother steps were undertaken as needed tothrough its acute and non-acute facilities

classify and consolidate item masters withacross the Central, Eastern and Northerncommon product descriptions for various MHC

regions of Wisconsin and Eastern Minnesota.

entities. An internal item number was also
adopted to reflect revenue code and stock

Trigger event for UNSPSC Implementation.

number.

In May of 2002 the Ministry Health systembegan an assessment of the MMIS that wereAt present, four MHC entities are fullyin use throughout their facilities. The timing of

converted to a single MIS system, a fifth is

this decision was pushed by the fact that one

underway, and the remaining entities will

entity was using an out-dated legacy solution

convert by the end of 2006. For those entities

that would no longer be supported by thenow fully under the same MIS system, the GLvendor. At this point there were 8 different

as well as the item dictionaries have been

MMIS systems being used within the MHC

converted.

facilities. There were different internal
numbering schemes and eight different item

Why and how did MHC use UNSPSC?

masters with line items numbering from 8,000

At MHC there is a belief that there is a very

to 30,000. MHC staff recognized that thesignificant supply chain opportunity offered byinternal numbering and item master disparities

the shared item master. Using UNSPSC towould have to be resolved if they wanted toclassify products across their system has

have a single enterprise-wide information

enabled MHC to look at a specific productsystem for general ledger and accounting

category and sub-category, e.g. implants,functions and to gain the ability to assess what

ophthalmic, to understand what is being

was being purchased by their system facilities.

ordered, how it is being ordered and at what©2005 Consorta, Inc.

1cost. In the classification area of implants

implants and the potential value of using

alone, which could be $5 million to $10 million

UNSPSC for other product areas. With reliable

in annual spend depending upon the definition,

data MHC can take steps to assure price parity

they can now consider standardization,

for the same product among all system entities

inventory issues, and can look to their GPO

and reliable access to the correct contract

agreements to cross-reference thepricing and could likely achieve further savings

manufacturer product options offered and bestby driving consensus among stakeholders topricing tiers available. [Refer to numbering

narrow the number of like products that arecase example on page 3].

purchased and inventoried within the system.

Through the analysis, MHC revealed

MHC is also benefited by the fact that theirconsumption patterns across their system.

GPO also has built the UNSPSC into their data

With price variances identified work could bemanagement systems. Through the GPO

done on strategies for price leveling andglobal catalog and related database, MHC is

opportunities for standardization or further

able to access and sort products under GPO

negotiation. It is widely accepted that suchcontracts and match or download to their item

seemingly straight-forward materials

master by UNSPSC, where the identification is

management decisions will save money, but

complete. By growing the scope and depth ofwithout accurate internal data to support

UNSPSC identification, MHC will be able todecision making and discussion, it is difficult, if

identify new opportunities to take best

not impossible, to engage key stakeholders

advantage of their sourcing relationship.

and manage the necessary organizational

Conversely, using procurement data on items

change.

already purchased, MHC and the GPO cancollaborate to audit for pricing accuracy or for

Through this effort MHC demonstrated

appropriate purchase reporting by the vendor

significant potential for savings in the area ofagainst the negotiated GPO agreement.

©2005 Consorta, Inc.

2

System objective: aggregate volume and establish sourcing routines by Commodity
Classification
An example of aggregating implants by commodity classifications.
Items for which
UNSPSC has been Identified$121,940,428

Medical Equipment andAccessories and Supplies
UNSPSC starts with 42$72,180,473

Surgical Products
UNSPSC starts with 4229
$21,634,875■ Medical Equipment &■ Surgical products (UNSPSC■ Surgical implants &Accessories & Supplies(UNSPSC starts with 42)$72,180,473

startswith 4229)$21,634,875

expanders & extenders &surgical wires & relatedproducts (UNSPSC startswith 422955)$13,588,347

Surgical Implants & Expanders & Extenders & Surgical Wires & Related Products
UNSPSC starts with 422955
42295507-Surgical bone stimulators ($8,345,358)
42295504-Ophthalmic implants ($1,511,246)
42295501-Neurosurgical implants ($1,450,303)
42295515-Human tissue implants ($576,412)
42295505-Urological implants or sets ($419,103)42295516-Surgical silastic implants for general use ($414,006)
42295513-Surgical adhesion barriers ($274,796)
42295511-Surgical implants & expanders & extenders & surgical wires & related products ($188,147)
42295512-Oral maxillofacial implants or sets ($124,448)
42295503-Synthetic tissue implants ($107,491)
42295500- Orthopedic implants or surgical wires ($58,155)
42295506-Surgical mesh or tissue barrier products ($35,434)
42295510-Implantable infusion ports or accessories ($33,215)
42295508-Surgical implantable shunts or shunt extenders ($29,735)
42295502-Cardiovascular implants ($19,559)
42295514-Otolaryngology implants or sets ($934)©2005 Consorta, Inc.

3

For More Information
To learn more about this UNSPSC Success Story, please contact John Hatzenbuhler, MHC
Director of Supply Chain Management, hatzenbj@ministryhealth.org.
Reference Information:
1.

What is the UNSPSC®?
The UNSPSC® (United Nations Standard Products and Services Code®) is the result of amerger of the United Nations' Common Coding System (UNCCS) and Dun & Bradstreet'sStandard Product and Services Codes (SPSC). It was launched as an open standard inFebruary 1999. As an open, global standard, use of the code is free of licensing fees. The
UNSPSC allows companies to consistently classify the products and services they buy andsell. The UNSPSC is a hierarchical set of product categories.
Example:Hierarchy: Category Name (Code)
Segment: Medical Equipment, Accessories, and Supplies (42.00.00.00)
Family: Wound care products (42.21.00.00)
Class: Wound packing products (42.21.04.00)
Commodity: Packing strips for wound care (42.21.04.02)

2.

Why is the UNSPSC important?
The UNSPSC initiative is important in providing free and open standards that can be used
across many industries. It provides a standard set of guidelines and parameters whereby,
when utilized and managed properly, an organization can group like products. This can prove
useful for analysis, organizing, finding items, and ordering products.

3.

Who manages the standard?
GS1 US™, formerly the Uniform Code Council, Inc. ® (UCC®), leaders in facilitating efficientinternational business, has been selected by the United Nations Development Programme(UNDP) to serve as code manager of the United Nations Standard Products and Services
Code (UNSPSC).

©2005 Consorta, Inc.

4

About the Coalition for Healthcare eStandards, Inc.
The Coalition for Healthcare eStandards, Inc. (CHeS) is a group of leading
healthcare purchasers, suppliers and distributors advocating for the adoption ofuniform industry standards for supply chain transactions over the Internet.
Formed in June 2000, members of the Coalition include AmeriNet, Consorta,
Global Healthcare Exchange, MedCenterDirect, Medibuy, Neoforma, Novation
and Premier. This group represents nearly 80 percent of the healthcare providers
in the United States. Visit www.CHeStandards.org for more information about theCoalition.

About GS1 US™
GS1 US, formerly the Uniform Code Council, Inc.® (UCC®), is a not-for-profit
organization dedicated to the adoption and implementation of standards-based,
global supply chain solutions. Under its auspices, GS1 US operates three wholly
owned subsidiaries, EPCglobal US™, RosettaNet, and UCCnet®. GS1 US
manages the United Nations Standard Products and Services Code® (UNSPSC®)
for the United Nations Development Programme. EPCglobal Inc is a joint ventureof GS1 Us and GS1 (formerly EAN International). GS1 US-based solutions,
including business processes, XML standards, EDI transaction sets, and the bar
code identification standards of the EAN.UCC System are currently used bymore than one million member companies worldwide. For more information about
GS1 US, please visit: www.gs1us.org. GS1 US is headquartered in
Lawrenceville, NJ USA.

©2005 Consorta, Inc.

5©2005 Consorta, Inc.

04/05