Clinical Business Solutions Clinical supply management
success in 2006

by Eileen McGinnity

A new year brings new possibilities – possibilities for change and for improvement.

Supply chain is the second largest source of expenditures in your hospital. Subsequently, your role as a supply chain professional is necessarily high-profile. Are there ways that you can raise your game in the coming year?

As in most areas of hospital management, successful clinical supply oversight is a relationship business. Constant communication and relationship-building are the foundation for making notable financial strides in your supply chain, both for commodities and for clinical preference items.

Hospital executives, vendors, physicians and other clinicians all play an integral role. Often, materials managers are the administrator’s linchpin to broker détente among the parties. As one materials manager in a large health system in the Southeast says, success in clinical preference supply management is a result of balancing "the triangle"– the sometimes delicate relationship among the three parties of hospital, vendor and physician.

Relationships are not built overnight. Credibility is earned, not conferred. As you shake off the holidays and plunge into 2006, consider the following building blocks of clinical supply effectiveness and develop a strong and balanced "triangle" in the process.

• Building relationships with physicians, key clinicians

In our consulting experience with clinical programs across the country over several decades, one of the key attributes of successful materials managers is this: They have some level of personal relationship with the key physicians in the hospital. Not only does this materials manager know them by name, but he or she also has a good idea of the physician’s volume of cases relative to the program, the physician’s hobbies (coaching soccer? fishing? cars? rock climbing? playing drums?), the physician’s preferred vendor and his or her level of loyalty and the reasoning behind it. The successful materials manager has had a one-on-one conversation with these key physicians at some point in the last six to eight weeks.

This type of interaction contributes to success in two ways. First, it gives the materials management professional great credibility by providing an ongoing view to the challenges and demands that physicians face daily in clinical practice. But it also puts a human face on physicians who may be characterized by others as "high maintenance" individuals. There is no other business quite like the hospital business. It’s difficult to be effective without understanding the sometimes obtuse or adversarial dynamic of clinicians and business people.

Second, it enables the reverse: Physicians can regard materials managers as healthcare professionals, too – albeit at the business end of healthcare – whose knowledge and point of view support the hospital’s mission of serving its physicians and community. It takes time, but the payoff can be tremendous. We have seen materials managers wield tremendous organizational power once they have learned to approach physicians as fellow professionals and, dare we say it, peers in our complex industry.

With that, consider these suggested building blocks of success in the management of "high-end" clinical preference items this year:

• Create a clear line of sight and communication with your C-suite.

It bears repeating: Supply chain is second only to labor in terms of expense for virtually every acute care healthcare provider in the U.S. The challenges faced by materials managers have a significant ripple effect on the financial viability of the entire organization. For this reason, materials management commands attention at the "C-level" (CEO, CFO, COO, CNO, CMO).

It is not a lack of humility to expect the C-suite to recognize the key role of the supply chain professional and elevate it within the organization. C-level executives are in a position to endorse the role of supply chain by recognizing successes and opening doors.

Of course, the quid pro quo is that the procurement executive earns respect through demonstrated competence and continuous adherence to a high standard.

• Legislate supplier access to clinicians in your facilities to reinforce that your organization speaks with one voice.

Centralized purchasing processes and fully implemented vendor access policies strengthen your organization’s control of product quality and pricing.

• Coordinate an effort at the front end of product choice.

A defined "technology product review and selection" program includes clinicians and procurement professionals. The result of this due diligence is that patients can receive proven and effective therapies for their conditions. Engage end users of the product and organizational resources such as Security personnel to ensure that the selection process is maintained and not subverted.

• Put competition before partnership to control supplier negotiations.

Never forget that every supplier encounter is really a negotiation. To think otherwise is to be naïve. But it needn’t be adversarial either. Empower yourself with accurate and defensible data and benchmarking to stay in control of the negotiation. Bear in mind that "data" includes qualitative information such as the position of key physicians regarding their clinical preference item selections and vendor relationships. By completing the internal due diligence, including educating and leveraging the C-suite, you can be confident in estimating the "walk-away" positions of the hospital and the suppliers. HPN

Eileen McGinnity is president of Aspen Healthcare Metrics, a national clinical service line consulting and benchmark data firm, based in Englewood, CO. Visit Aspen Healthcare Metrics’ Web site at www.aspenhealthcare.com.

January
2006