Newsmaker - People and Opinions
Multi-facility supply management success stories and failed projects
During the reporting process for our February edition story on
multi-facility supply management we asked integrated delivery network (IDN)
supply chain executives and industry consultants to share some big wins
and horror stories with us. What follows are some insights and
recollections in their own words, which can be a helpful mentoring tool
for any struggling with supply chain challenges in their organizations.
We also share with you their top priorities in 2006.
TIFFIN KACZKOWSKI,
corporate director, materials management,
Oakwood Healthcare System, Dearborn, MI
Success story and failed project:
This project I believe
answers both questions. Reprocessing of ‘one time use’ items is a major
undertaking and needs to be supported by many with in the healthcare
system. When we first tried to roll this program out it hit the wall
immediately. There was a misconception about how the items were being
reprocessed and several staff campaigned to stop the program because of
a lack of understanding. Some of the hospitals were comfortable with the
program and wanted to move ahead but several were just not sure and were
getting mixed messages from their staff.
We went back to the drawing board and redesigned the
program. The first people we reengaged were the infection control staff
and the risk managers. We worked with the reprocessor to make sure that
program would fit our needs and we sent a team to review their
facilities to review documentation on process and certification. Once we
had our critical team members’ approvals, we created a system-wide
reprocessing team that reviewed each item proposed for reprocessing and
made the decision of what items would be placed in to the program.
Next, we worked with the vendor and the reprocessing
team to develop an educational process to make sure that staff and
physicians understood the process used to pick up, clean, disinfect,
sterilize and certify these items for use. Then we reintroduced the
reprocessing program one hospital at a time. Once we achieved success as
measured against our benchmarks we moved on to the next hospital and so
on.
TOM GOLASZEWSKI,
vice president, materials management, Meridian Health System, Neptune,
NJ, and executive director, The Coastal Cooperative of New Jersey
Success story:
Conversion of endo-mechanicals from one vendor to another, resulting in
significant savings. However, great attention to inservicing clinicians,
administrative support and presence in the O.R. were all key to the
ultimate success.
Failed project:
Aggregating/standardizing major equipment purchases. As we move into
2006 we will concentrate on having the right stakeholder project not
only current but anticipated major purchases as well.
DAVE HUNTER,
director of supply chain management, Providence Health System, Portland,
OR
Success story: Our
supply chain management organization is regionally controlled at the
operations level. We are successful with our system supply chain
management strategies when the regional organizations are providing the
basic services at the quality level expected by their local
facilities. If supply chain management does not have the local
relationships in place and providing the products needed in a timely
fashion then system programs will not succeed. We have had many success
stories when these regional needs are being met.
Failed project: The
failed projects do not move forward regardless of the system programs
and support if the local operations and relationships are not
effective. We at the system level can overcome poor operations at the
local level.
BRETT STILL,
regional director, materials management, Providence Health System,
Portland, OR
Success story: I
think [there are] two things in operations. One is hiring, and in many
cases, replacing with outstanding professional materials managers. When
local administration hired the individuals they cut corners or did not
understand the value of investing in the position. I also again,
believe, the service center in the Oregon region has been very
successful.
Failed project: Our
biggest failure is how we originally handled the rural facilities and
their support. We spread our management too lean and did not at first
realize the amount or lack of expertise available at those facilities.
FRED CRANS,
director, materials management, The Finley Hospital, Dubuque, IA
Success story:
The Central Distribution Center in Des Moines [for Finley]. It was
well-planned and has been well-implemented. I would not say that it went
‘beautifully’ — which implies without issue — but it has gone well and
continues to see improvement.
Failed project:
I thought of an initiative that went wrong. It happened about 27 years
ago at [another hospital], but it is a good example of best intentions
gone wrong. I had proposed a centralized patient transportation service
and had gotten the go-ahead from the CEO. I planned the whole thing with
the administrative resident (who is now COO of the system). The big
problem was that the initiative flew in the face of the director of
radiology’s personal desire to keep ‘his’ transporters. The situation
was exacerbated by the fact that in our haste to reduce FTEs we
‘under-planned’ in the people requirements. The result was a service
that worked well on paper, but did not satisfy its chief customer — the
radiology department. It took two full years to get the service to a
point where it was accepted by them. The key learning element in this
case study is the need to accurately predict both demand and
departmental reaction before implementing the change. I am proud to say
that with the exception of computerizing the tracking process, the
function remains in operation pretty much as we set it up.
NICK LINK,
director, contracting, ProMedica Health
System, Toledo, OH
Success story: Whether
we’re developing our own contracts through [Lake Erie Regional
Cooperative or collaborating with Amerinet, we’ve learned we can
negotiate prices lower than the national GPO’s because we can deliver
market share to the suppliers. But it’s not just the pricing. It’s
taking it one step further and standardizing product usage and
eliminating SKUs among the facilities by working closely with our
clinicians/end-users.
Failed
project: It’s one thing to
standardize commodity and clinical items, but it’s another thing to
standardize on physician-preference items. We know this is our biggest
expense-reduction opportunity in our system. We’ve tried on occasion to
standardize physician-preference items with little success. We’ve
learned that as we came together as a system, the physicians did not
necessarily come along with it. You definitely need a physician champion
to make it work and on those occasions when we tried to standardize, it
was absent that element. You also need to answer the physician’s
question of, ‘What’s in it for me?’ Much has been written in the
literature about answers to that question and, we are looking at some of
those things.
JAMIE KOWALSKI,
healthcare supply chain consultant,
Milwaukee
Success story:
An IDN implemented a computerized order entry and communication system
for both the acute and ambulatory customers that was so user-friendly,
it facilitated data capture, and ultimate building of a common catalog.
Once that was in place, it was possible to identify total supply spend,
duplication, non-standard products and pricing, and to begin to harvest
savings opportunities.
Failed project:
Just the reverse of the above. An IDN that identified itself as a ‘big
enterprise that buys a lot of supplies,’ selected and implemented a
‘commercial/industrial’ materials management information system
throughout. Not only did it not match the true unique characteristics
and operating requirements of a healthcare facility in the in-patient
setting, it was a total mismatch for the ambulatory setting. Materials
management lost credibility and the opportunity to capture the data and
information needed to reduce spend and total expense, as well as the
opportunity to build support and rapport with users, who must help drive
the changes and achieve the savings.
MIKE RUDOMIN,
Mike Rudomin, vice president, supply chain
consulting, Owens & Minor Inc., Glen Allen, VA
Success story:
Well, one strategy I recommended to an IDN
that was very successful – and is much more common today – was for
materials management to deploy ‘materials coordinators’ to each of the
material-intensive clinical departments throughout the system. These
folks were responsible for helping the department manage their supplies
and their support included inventory and/or PAR level management as well
as assistance with non-stock requisitions and purchases. For example,
one person was assigned to oversee supplies in all of the O.R.s
throughout the system, one for all of the cath labs, etc. Once the
program proved its credibility, the department managers and supervisors
were only too happy to have the burden of supply worries removed from
their daily routines. Materials management, of course, was happy to
provide this support since the reduction in supply problems and
‘emergencies’ from these departments in turn made its life easier. And
the IDN as a whole benefited from a more efficient and effective supply
chain as well as better utilization of the clinical/management staff in
these departments.
Failed project:
I was once brought into a scenario in
which two dissimilar organizations in the same large city merged as part
of an effort to develop an IDN that provided a very broad array of
services. One hospital was an academic medical center and the other was
a successful community hospital, and neither medical staff was happy
about coming together under the same roof. The physicians at the medical
center looked upon those at the community hospital as unsophisticated
general practitioners who could ‘handle the easy stuff’ while the
community hospital doctors saw those at the medical center as academics
who ‘couldn’t diagnose and treat a sore throat without ordering an MRI
and three consults.’ There was an effort underway at the time by the
medical center’s purchasing department to force the community hospital
to use the medical center’s GPO contracts, which in most cases provided
better pricing but also required a change in vendor and product. Not
surprisingly, the community hospital docs resented (and resisted) what
they saw as this effort by the medical center to force change upon them
and that fueled an attitude of further resistance to other IDN attempts
at change. From my perspective, while I certainly understood
purchasing’s desire to implement supply cost saving opportunities across
the IDN, I nonetheless felt that a significant error was made in failing
to work with the community hospital medical staff to understand their
perspectives or try to gain their cooperation. A good supply chain
management strategy that failed miserably because of a lack of insight,
planning and experience.
Top priorities in 2006
HUNTER: Providence
Health System is merging with its sister organization Providence
Services on Jan. 1, 2006, to form Providence Health & Services. My No. 1
goal this year will be to assist in the development of an effective
supply chain management program within this new organization which will
be some 45 percent larger under the combined organization.
STILL:
Support and assist in implementing system office strategic
initiatives. Aggressively resolve physician utilization issues in the
area of implants. Improve of diversity contracting programs.
KACZKOWSKI:
Continue to develop methods to work with our physicians as partners in
the selection of products in key spend areas, i.e., orthopedics and
cardiology. Expand the influence of supply chain management in key areas
such as O.R. and cath labs across the system.
GOLASZEWSKI:
Further expansion and development of our cooperative contracting arm
(Coastal Cooperative); capitated agreement for cardiac implants; further
expansion of our reprocessing program.
CRANS:
Refining and continuing to improve the dedicated distribution center
experience. Implementing a third-party service and maintenance program.
LINK:
Drive expense reduction through
standardization of physician preference items. Develop new and better
reporting of supply-chain performance metrics.
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