The letter “e” — prefix to something or not — tends to align itself with anything related to finance, information technology, strategic planning or sustainability.
In Supply Chain, it stereotypically tends to represent “expense” — or to clinicians disgruntled when they can’t find what they need, “empty,” as in supply shelves.
The Supply Chain team at West Reading, PA-based Tower Health, eludes that designation.
To this august group of professionals, “e” stands for “enterprising,” which loosely translated signifies the freedom to be entrepreneurial within the confines of an established corporate structure.
Some healthcare organizations try to be forward-thinking and future-minded by outsourcing trouble spots to third-party consultants and vendors, or throwing some new automation and software at a challenge and hoping something clicks or sticks.
Not Tower Health.
Five years ago, the Reading (PA) Health System, comprising a 700-bed hospital and other healthcare facilities, operated like many other similar organizations. Since then, Reading has morphed into the six-hospital Tower Health with 116 healthcare facilities in its stable, fortified by a centralized corporate supply chain department that has posted some eyebrow-arching results.
To wit: All processes are electronic and automated, enabling transparent reporting and accountability, according to Rita White, Tower Health’s Vice President of Supply Chain. Product ordering and replenishment has been streamlined, resulting in a 60 percent improvement in inventory accuracy with an 80 percent reduction in stockout occurrences. Supply Chain sources and manages all Operating Room, Cardiovascular and other key area supplies, freeing clinical staff members to devote themselves to providing patient care.
Tower Health debuted formally and officially in October 2017, booking in excess of $27 million in costs savings to date. Today, Supply Chain is embedded into all areas of Tower Health and is an integral part of the patient experience, White emphasized, acknowledging that the transformation did not happen overnight. “It required intense strategic planning, a thorough understanding of organizational goals, and an innovative vision for how Supply Chain can support high-quality patient care,” she noted.
For investing in its own ingenuity, its own people and its own technology, Healthcare Purchasing News selected the Tower Health Supply Chain team as its 2019 Supply Chain Department of the Year.
Recharting the nucleus
Countering any chicken-and-egg relationship, White emphasized that Supply Chain’s metamorphosing changes weren’t related to Tower Health’s emergence and growth.
“Rather, they were reflective of new Supply Chain leadership that brought a new vision for the role of the department,” she indicated. “There was no ‘cause-and-effect’ between the growth of Tower Health and the implementation of the new initiatives. In alignment with the strategic approach of Tower Health, Supply Chain wanted to build solutions that would grow with the health system. If anything, she added, they were running parallel courses.
The Reading-Tower Health Supply Chain caterpillar-to-butterfly transformation started with the team itself as leadership sought to identify “required skill sets beyond traditional Supply Chain experience.” This included requirements that applicants achieve minimum scores on advanced technological assessments even to qualify for an interview. They also needed to demonstrate “innovative mentality, problem-solving abilities, analytical mindsets, project management skills and professionalism,” along with collectively displaying some proficiency in more than 20 different software programs and LEAN Six Sigma principles.
“We deliberately recruited talent with analytical skills, leading to a combination of logical thinking, technical know-how and professional work ethics,” White said. “Supply Chain leadership taught the team pertinent Supply Chain operations, communicated and clarified the ‘ask’ and vision of the initiative, and routinely monitored progress to ensure the solution was ‘staying on course.’ This empowered our team to develop ‘home-grown’ solutions specific to the needs of Tower Health and mine the data to obtain meaningful, informative insights.”
White quickly points out that their efforts do not diminish, but enhance traditional supply chain functions.
“Every time Supply Chain had an FTE opening, we enhanced our staff with additional skill sets, capable of developing, implementing, and maintaining Supply Chain operations based on prioritization,” she said. “By replacing time-intensive, erroneous, manual processes with automated, sophisticated solutions, we were able to enhance the roles of Supply Chain without compromising core functions.
“Healthcare as an industry is changing at an unprecedented rate with enhancements in technology, discovery of new treatments and evolving patient care,” White continued. “To proactively address exceptions, beginning with forecasting throughout the continuum of care, Supply Chain requires continuous access to real-time data from various systems, both internal and external. Traditional MMIS systems do not inclusively address all aspects required of a robust, well-rounded Supply Chain department. Our solutions close the gap between where the ERP system leaves off and the business needs.”
Such a multi-faceted team transcended the traditional Supply Chain silo mentality or even the next-level “multi-disciplinary” definition. The C-suite recognized this, too, actively encouraging any and all ideas, keeping a universal “open-door” policy in place and implementing support-area focused seating that paired groups of team members with different titles and responsibilities together in support of common areas.
“Clinical staff holds daily huddles to discuss patient concerns,” White noted. “While considering this, we discussed the type of advancements that could be made if all the positions supporting an area were seated together, enabling them to continuously brainstorm and strategize while enhancing communication between different supporting roles. This strategy promotes the ability of Supply Chain to provide comprehensive, consistent support to all areas.”
Power in data
Tower Health’s Supply Chain team recognizes and understands the value of data — from desiring it to collecting it to analyzing it to disseminating it. That’s why they operate under the ideology that “whoever holds the data holds the truth,” which they weave throughout their operations, spanning contract negotiations with vendors, performing supply-cost-per-case analyses on OR procedures, or determining ideal PAR levels to minimize waste. Detailed analytics fortify strategic decision-making.
“Supply Chain has a continuous commitment to maintaining data integrity, utilizing [internal] tools to monitor and resolve data exceptions as they occur,” said Ann Paolini, System Director, Supply Chain Business Intelligence. “To ensure the integrity of our data, only a select group of individuals have the security level required to modify the item master. Additionally, any data changes must go through standard, automated workflow processes to obtain approval.”
Tower Health’s Corporate Supply Chain was formed largely by the need to standardize operations at all facilities and integrate member hospitals under a single enterprise resource planning system, according to Paolini. Tower Health’s ERP from Infor integrates human resources, payroll, procurement, finance and accounts payable. Supply Chain’s item master interfaces with Epic for both patient documentation and billing. Tower Health also incorporates GS1 supply data standards, such as the GTINs, via the Food and Drug Administration’s Global UDI Database site.
Supply Chain also earned the respect and trust of the C-suite, according to Mark McNash, Senior Vice President, Support Services. (See sidebar on Tower Health innovations.)
“By replacing manual processes with an automated, standardized workflow, leadership requires only a simple internet connection to be aware of all pertinent information throughout the capital process,” he said.
Before Tower Health could unwrap its unified brand identity in October 2017, the six systems had to jump through a few hoops. In the new era the corporate supply chain office would oversee product ordering, contract management and negotiations, strategic decision-making; and process management; local inventory functions, such as receiving, PAR replenishment and management of facility inventory levels would be handled by the facility’s Supply Chain team.
With that point of reference they needed to consolidate key suppliers and IT horsepower.
“The data [were] reviewed over a six-month period to create a single item master, which did not come without its challenges,” she recalled. “The acquired hospitals’ data had never been data-cleansed and was missing various item attributes. Now that we have integrated into a single ERP system, processes are being implemented to ensure a continual cycle of validating and cleansing.”
Plus, the item master conversion needed to predate the future rollout of their electronic health record and OR system from Epic as they wanted to plug the item master into it easily and seamlessly.
The consolidated item master challenge? They wanted to combine six independent, autonomous item masters — in a single day. And they did it.
“The ERP integration of the six Tower Health hospitals was a prerequisite for our Epic go-live this August,” said Michelle Trupp, Senior Vice President and CIO. “The health system agreed to an ambitious big-bang approach — all hospitals went live on our ERP system the same day. Incorporating and cleansing data from five new hospitals was a phenomenal task that no individual or department could manage alone. The collaborative efforts of IT and Supply Chain placed the foundation for a seamless and successful transition.”
White indicated that Supply Chain and IT currently are discussing future project development together.
To assist the blossoming and burgeoning Supply Chain team’s transition, departmental leadership created in Microsoft OneNote a comprehensive 300-plus-page manual that detailed all department activities.
“Supply Chain involves many moving parts, requiring complex processes and effective utilization of resources,” White noted. “Thorough documentation coupled with comprehensive training is often the most effective and rapid way to onboard new employees and train current ones on new processes and tools.”
They selected Microsoft OneNote as “the main documentation platform because it is an easily accessible tool that is available as part of most Microsoft Office packages and supported by IT,” White said. “This allowed the manual to be readily available to all team members, beginning at onboarding, which made it ideal for providing new team members with training materials. OneNote easily allows multiple people to view and update its contents simultaneously and offers a versatile home for a variety of training documents.”
Like many supply chain departments, Tower Health’s team recognizes and understands the value of fulfilling its mission to clinicians, its primary customer base.
“We listened to the needs of the clinicians, determined the best ways to provide them with the needed support with a strong focus on being proactive instead of reactive, and consistently strove to go above and beyond the expectation,” White acknowledged.
To support Tower Health’s physician community, Supply Chain “reinvented” value analysis with its iVAT program. Why the lower-case “i?” iVAT includes the innovative design of interconnected sources to establish the integration of data resources into intelligent, analytical tools to drive informed decision-making to promote high-quality patient care, improved operations and positive financial outcomes, according to White.
Here’s how it works, according to White. iVAT is a corporate program with representation from each facility, incorporating Skype meetings to ensure maximum participation across all locations. A steering committee comprising executive leadership provides oversight to the program and ensures alignment with the strategic priorities of Tower Health. Because Tower Health doesn’t operate any local Value Analysis committees independent decisions are not made at individual facilities. To bridge the gap between corporate and local departments, Supply Chain dashboards leverage Tower Health’s intranet, which is available to all facility locations. To ensure easy access to tools at all facilities, Supply Chain developed a user-friendly, easy-to-navigate intranet site that forms a centralized portal and provides a single-point of access for all Supply Chain tools and team rooms via a dashboard.
“By working collaboratively to assess and coordinate our procurement activity at the system-level, the iVAT program impacts and benefits every associate and patient at Tower Health,” McNash said.
For each initiative, Supply Chain provides members of the iVAT collaboratives a detailed report called a “Prospectus,” which includes a summary of the data, including total financial impact, market share, key stakeholders and proposed item conversions to the SKU level across the Tower Health enterprise, according to White.
“Physicians respond to data, and the analysis of clinical financial data is integral to the collaboration of key stakeholders in improving patient care and identify savings opportunities,” said Gregory Sorensen, M.D., Executive Vice President and Chief Medical Officer. “iVAT utilizes an automated infrastructure to pull information from multiple sources, including Epic and [Infor] and structure it into meaningful, standardized information, promoting strategic decision-making.”
Tower Health was one of five founding member health systems that formed a regional group purchasing organization called AllSpire that works with HealthTrust as its national GPO.
“This project has significant importance to Tower Health, not only because of the adverse impact ‘unknown spend’ has in accurately identifying cost saving opportunities, but also because of the need to support our integration efforts to bring six hospitals together into a consolidated ERP system and a single unified Item Master,” Paolini said. “Throughout ERP integration, we were in a period where we did not have visibility into the data of the acquired hospitals except through HealthTrust data feeds. We were reliant upon HealthTrust data to begin the integration process until all hospitals operated on a single ERP system.”
To date, the project has reconciled approximately $30 million of unidentified spending, she added.