In pursuit of foundational fusion

According to the American Hospital Association (AHA) clinical integration is the coordination of patient care across conditions, providers, settings, and time in order to achieve care that is safe, timely, effective, efficient, equitable, and patient-focused. I would define the traditional supply chain aggregation strategy as multiple members who aggregate purchase volume and market share to be viewed as a single entity in order to maximize contract savings on supplies, devices, equipment, pharmaceuticals, and purchased services.

For these two concepts to work together we need to be more innovative, prescriptive and coordinated. Supply aggregation of the future needs to focus on clinical integration and standardization as well as maximized contracting.

As we prepare for the coming year there is one thing we know for sure: Supply costs continue to increase.

The Association for Healthcare Resource & Materials Management (AHRMM) recently projected that the cost of medical supplies will surpass labor as the biggest expense for hospitals and health systems by 2020. Though a staggering prediction it is not all that surprising in today’s environment. We certainly will not win this battle around the price of individual supply items. Our best strategy against ever-rising costs is to continue the work to standardize care and clinically integrate supply chain to aggregate our volume and compliance against this war on supply costs.

Partner with practitioners

The clinical integration of supply chain begins when Supply Chain partners with practitioners around the episode of care. If we look at those incidents that are our highest costs and work to achieve the highest standards of care to improve outcomes we can — and will — impact the overall delivery of care.

Catheter-acquired urinary tract infections (CAUTI) represent a simple example. Everyone is combating this event and looking for ways to reduce the cost and occurrence. We often start with the products and throw dollars at a bandage-type solution resulting in more costly supplies. When that doesn’t work we go further upstream and look at occurrences trying to isolate the cause of the infection, the techniques used for insertion and care, the type of patients with the highest occurrence, the specific location in the facility that has the highest incident, etc.

Using an aggregation-oriented strategy, we can leverage the clinical expertise of the aggregation membership to bring together strategies and approach. We discuss at the aggregation level what is and is not working. We solve the problem with more informed data, evidence and expertise. This is obtained through clinical experts aggregating across multiple facilities. From there we go even further upstream to our supplier partners. We approach them with our clinically integrated strategy that includes best practices and then work to standardize product, adding the volumes and commitments of an aggregation unit.

Think like a manufacturer

As the AHA defines clinical integration, we approach this in the coordination/aggregation of patient care across conditions, providers, and setting to achieve an effective outcome. Aggregations can start with evidence-based research, establishing standards of care across multiple providers and working with our suppliers to co-create, educate and distribute the product that will support the leading standard of care. As a result, our aggregation groups work with supplier partners to reduce the number of catheters for the facilities in our aggregation unit by standardizing on the best catheters at the best unit price and help educate our practitioners on the care standard that has been proven most effective and is a standard across our aggregation unit.

This represents a truly innovative approach to combat increasing costs across the healthcare continuum. We are standardizing care, standardizing manufacturing, standardizing distribution, lowering overall costs and improving outcomes by reducing an incident like CAUTI. We also reduce the labor hours at each of our aggregation members’ facilities by having only a few experts participate and collaborate to establish the highest standard of care for all. In many aggregation units there may be a small number of members that represent a much larger body of members to drive value for the entire group.

I continue to believe that the key success factor for supply chain management of the future is through clinical integration that is evidence-based and focused on reduced variation of practice and product. It is not, nor ever has been, about getting clinicians to comply with a contract.

We need to reverse-engineer the process. We need to start with the episode of care. We need to reduce variability in practice and then move to the reduced variability in the products required to achieve the highest quality and outcomes. I know that value will prevail both clinically and financially. Through an aggregation and clinical integration strategy we can not only wage a war on cost but make a substantial difference in the care of the patients we serve. Here is to a bright and bold 2017.