There’s a common theme – or maybe several common threads – interwoven among the mini-profiles of this year’s Elite 11 “Supply Chain Operations Worth Watching” chosen by Healthcare Purchasing News.
Data appear to be the tatting that connects processes and performance throughout a growing enterprise. Perhaps the epitome of the “rock the data” movement rests with the reigning Supply Chain Department of the Year, Tower Health, West Reading, PA, which in a spark of prescience also happened to make last year’s Supply Chain Operations Worth Watching. (See HPN’s August 2019 feature by visiting: https://www.hpnonline.com/hall-of-fame/article/21087717/a-tower-of-able.) Tower Health found creative ways to gather, collect, analyze and react by using scores of data gleaned from internally developed software as well as from external products.
In fact, data seem to be fueling a deep-seeded overhaul of the fundamental tools in supply chain operations, including item masters and tentacles to myriad systems within an organization, such as billing, charge data masters, clinical and surgical systems and electronic health/medical records. Essentially, these facilities foreshadow a pattern that promises to shape the next decade of progressive supply chain development, further closing the loop between administrative, clinical, financial and operational decision-making.
For the 8th consecutive year, the December edition of HPN traditionally spotlights “Supply Chain Operations Worth Watching” by soliciting nominations from all sectors of the industry (providers, suppliers, group purchasing organizations and consulting firms) and conducting background research to determine those that emerge at or near the top.
This year, 11 organizations join 89 other ongoing healthcare supply chain superstars profiled by HPN since 2011, bringing the grand total to date to 100 (although this year two government organizations technically are being counted as one).
Generally, once an organization’s Supply Chain department/team “makes the list” it remains “worth watching” unless its absorbed via merger or acquisition, in which case it’s possible for the “new” crew to make the list (if nominated, of course) under the “new” name because they may be accomplishing more “new” things. For the running list of 100 Supply Chain Operations Worth Watching, visit HPN Online.
As always, if your organization – or one you think should qualify – didn’t “make the list,” be sure to let us know and then plan how to showcase the deserving organization for consideration in the 2020 compilation. The December 2020 edition will welcome noteworthy organizations to join the list of 100 as well as expand to include Sterile Processing Operations Worth Watching.
Take a look at HPN’s latest Elite list in alphabetical order by name for highlights on what they’re doing and why they matter.
Ascension Health, St. Louis, MO
While Ascension Health may be the largest not-for-profit, Catholic, faith-based healthcare organization in the nation, it’s the first to hold all of those distinctions and exercise management over end-to-end supply chain operations at each of its more than 150 hospitals in 21 states and Washington, DC. Ascension’s The Resource Group (TRG) effectively places Operations Management Teams at each location and manages all supply chain associates onsite. During the past year, TRG has pulled back the curtains on some of the progressive and impressive projects being undertaken. (See October 2019 HPN story on “Future-ready Supply Chains for examples.) Among the notable projects either actively running or in development: They implemented a standard enterprise resource planning (ERP) system (Oracle’s PeopleSoft) across all locations, launched a central master data management (MDM) team to cleanse and maintain the item master for accuracy, established a “managed distributor model” by consolidating distributors to one each for medical/surgical, laboratory and pharmacy products as well as extensively rationalizing stock-keeping units (SKUs) to minimize – if not eliminate – carrying excess inventory. Further, TRG established that all purchases must be made via purchase order (PO) to reduce pricing errors and rectify any pricing discrepancies quickly – or no remittance. Meanwhile, TRG also is developing a comprehensive disaster/disruption planning initiative and an integrated surgical experience that matches supply chain process progression to patient migration.
Aspirus Inc., Wausau, WI
The Supply Chain team at Aspirus that spans four hospitals in Wisconsin, four hospitals in upper Michigan and more than 50 other healthcare organizations rallies around a fundamental yet an influential motto that drives their clinically integrated process: “We fill the hands that heal!” Aspirus spent the last several years consolidating, centralizing and standardizing supply chain operations around a system-wide executive and three functional directors, each possessing core expertise in specialized areas, such as operations and logistics; informatics and systems; and strategic sourcing, purchasing and value analysis. Such executive specialization also translates through the ranks of the product purchasing teams and through collaboration with clinical specialists in the areas of cardiology and neurosurgery. Through performance and quality improvement measures and a system-wide ERP (Infor’s Lawson), Aspirus automated its end-to-end supply chain processes, including its item master, earning accolades from GHX and Vizient during the last several years. Aspirus also worked with Medline to develop and implement its “light switch” automated reprocessing application that simplifies and streamlines product replenishment. Supply Chain’s efforts have generated more than $11 million in contract and value analysis savings during the last two years. Supply Chain also played a key role in Aspirus’ participation in Civica Rx, which manages the supply of essential generic medications administered in hospitals, and it leads the organization’s sustainability efforts. Among the sustainability projects spearheaded by Supply Chain: Moving to 100 percent recyclable copy paper, eliminating exam table paper, removing plastic straws in facility cafeterias, reprocessing medical devices and recycling OR sterile wrap. Through Supply Chain’s efforts, approximately 40 percent of all purchases include some form of sustainability attribute. Supply Chain strives to increase that percentage and significantly reduce chemicals of concern throughout the health system.
Atlantic Health System, Morristown, NJ
The Supply Chain team at Atlantic Health may have performed all of its operational requisitioning electronically for more than 15 years, but its Strategic Sourcing team of 11 analysts helped develop a mobile, Web-based “Analystic Toolbox” using a Microsoft Access-based front-end application to create SQL-based queries to identify expenditures and facilitate cost-saving efforts as well as help them gain expertise in a variety of product and service categories. Supply Chain’s informatics group also uses contemporary business intelligence tools to help plot price points and contract consistencies against invoices and product delivery service efficiencies. Supply Chain also dedicates seven cross-trained Sourcing Customer Care Representatives as the key points of contact for all hospital departments who average 430 POs per day with an average of 1,300 lines. Meanwhile, Strategic Sourcing participates in the organization’s “innovation incubator” group to discuss and explore ways to service clinical partners and work with external suppliers and service companies. Atlantic Health hosts an annual “Supplier Relations Days” event that serves as a type of internal trade show that reinforces customer service and teamwork internally and externally with suppliers. It also gives staffers a chance to see and touch products sans packaging for a better understanding on how they are used.
Avera Health, Sioux Falls, SD
The Supply Chain team at Avera Health pushed the centralization, consolidation and standardization into overdrive by uniting what had been five item masters covering 26 facilities, 261 inventories and 25 OR modules in 18 months. From there Supply Chain pressed for the accuracy of supply procedure charging, linking it to item utilization and reimbursement potential, rolling out updates as the organization implemented a new EMR platform. Supply Chain justified these efforts through revenue integrity improvements from procedure coding and product and service consumption patterns. Supply Chain also extended its value analysis process deeper into physician service lines and other clinical areas to improve processes for product and service line evaluation, selection and usage with an emphasis on clinical evidence as well as cost.
Baptist Health Medical Center, Little Rock, AR
Baptist Health’s Supply Chain team has been working to create and improve a clinical integrated supply chain process that relies on interdisciplinary alignment and participation from clinical, finance, IT and administrative leadership to solve pervasive challenges throughout the organization. One of the projects they implemented involved automating supply-related procedures in the specialized clinical departments of interventional radiology (IR), electrophysiology lab (EP) and the cath lab. Through radiofrequency identification (RFID) they have reduced the value of clinical products lost or missing by more than 80 percent, identified more than $900,000 in products that have languished on shelves for more than one year (to be used or swapped out before expiration), decreased the rate of products wasted (as in opened but not used) at the point of care by more than 15 percent through clinical practice workflow improvements, increased charge capture by more than 35 percent and reduced on-hand inventory by more than $1.4 million.
Charleston Area Medical Center/CAMC Health System, Charleston, WV
The Supply Chain team devoted considerable expertise and resources to enable electronic requisitioning for all departments and real-time updates on order status, which also facilitated automated purchase order (PO ) creation. Supply Chain dedicated a single full-time equivalent (FTE) to concentrate on inventory issues and data integrity, linking the expense and revenue areas as part of the daily routine. Charge captures increased nearly four-fold even as monthly revenue more than doubled to $750,000. Supply Chain also worked with Data Management to reduce significantly the number of invoice discrepancies that show up at the receiving dock. CAMC’s warehouse and linen teams collaborated to eliminate duplicate deliveries to customers via cross training and workflow improvements. Supply Chain also implemented an eight-step clinically integrated value analysis process that factors in outcomes evidence and supplier credentialing. They also developed a gainsharing program with neurologists that generated cost savings as well as a funding pool for necessary equipment and services. What’s also noteworthy is that CEO David Ramsey earned a S.U.R.E. award from HPN (for CEOs who Support, Understand, Respect and Empower supply chain performance) in 2006 just six years into his C-suite tenure. Ramsey continues in the role.
Departments of Defense, Philadelphia and Veterans Affairs, Washington (DoD/DVA)
When the U.S. Department of Defense in the mid-1990s opted to convert its distribution and logistics operations to a private-sector model using distributors as prime vendors from the older and more archaic depot system (the Department of Veterans Affairs followed suit soon after), the industry saw this as a monumental transition. Not only did it reinforce the business legitimacy of distributors and that private-sector practices could be applied anywhere, but it also emphasized the allure of big-dollar savings it could bring to a government organization that sorely needed it. Now that both agencies have long entrenched themselves in private-sector supply chain practices (and their civilian and military architects inducted into Bellwether League’s Hall of Fame for Healthcare Supply Chain Leadership), the agencies are embracing private-sector IT practices to fuel logistics activities. Both the DoD and DVA announced plans to swap the DVA’s current supply chain IT infrastructure with the DoD’s model for medical/surgical and other healthcare facility-related supplies. With the transition, both DoD and DVA hospitals and healthcare facilities will access a centralized ordering system. This conversion also runs parallel to the agency’s rollout of its Cerner electronic health record (EHR) initiative. DVA’s proposed 2020 budget includes nearly $37 million earmarked for its “supply chain modernization” effort.
Freeman Health System, Joplin, MO
Freeman Health has been concentrating on mastering a blend of benchmarking and contracting for several years now. Working through its group purchasing organization (Vizient), Freeman Health’s Supply Chain team identifies the top 10 benchmarking opportunities at its disposal and works to negotiate and reduce its overall price index with specific suppliers and product categories. Through effective communication, teamwork and contract standardization Supply Chain has reduced variation among commonly purchased items, managing prices and transaction processes more efficiently, reducing rogue purchases and items not in the item master and managing purchasing data throughout the enterprise. What’s also noteworthy is that when a tornado ripped through Joplin nearly a decade ago, destroying competitor Mercy St. John’s facility (which since has been rebuilt as Mercy Hospital Joplin), Freeman willingly served as one of several devoted product and service relief and triage facilities to bolster Mercy St. John’s staff and patients.
Hartford HealthCare, Hartford, CT
The Supply Chain team at Hartford Healthcare launched a rapid turnaround effort designed to achieve certain financial targets, streamline operations, drive clinical integration and implement innovative business models with senior executive leadership support all in the span of a single year. Now Supply Chain is tied to Hartford’s overall expense management strategy with its performance directly wedded to the organization’s business strategy. Among the improvements: Supply Chain redesigned the organization’s Procure-to-Pay procedures by expanding contracting to support all non-labor expenditures, transitioning the Accounts Payable function to Supply Chain, standardizing contract service delivery throughout the system and improving the procurement process in terms of service. This also included creating a clinical value team structure, deploying a Supply Chain Business Intelligence strategy from outside healthcare, expanding the capabilities of its ERP (Oracle’s PeopleSoft), implementing a system-wide purchased services strategy and governance structure and hiring a physician adviser who reports to Supply chain to help drive physician alignment and clinical expertise. During the last fiscal year, Supply Chain achieved a 42 percent improvement in savings, a 93 percent improvement in requisitions without a PO, a 65 percent improvement in credit reconciliation and a 15 percent improvement in cost avoidance.
Hunterdon Healthcare System, Flemington, NJ
The Supply Chain team at Hunterdon has focused on centralizing sourcing and contracting through its participation in Captis, a collaborative organization (supported by Vizient and Mayo Clinic) that aggregates member support to drive clinical effectiveness and economic efficiency. For the last two years. Hunterdon’s efforts have generated $2.3 million in savings through the fulfillment of contract commitments and standardization of products and processes. The Supply Chain team concentrated on correcting and standardizing data to control expenditures and reinforce data quality and completeness. They created a virtual item master to eliminate duplicates, rogue and non-essential items to limit pricing discrepancies, improve transactional efficiencies and reduce costs overall. Through a GPO-facilitated pharmacy aggregation program, Hunterdon generated more than $300,000 in savings via standardization practices by the end of the second quarter alone.
The University of Kansas Health System, Kansas City, KS
Setting up consolidated service centers (CSCs), and self-contracting and self-distribution programs have been corporately fashionable for the last few years even as many acknowledge the three lack universality as a solution. But the Supply Chain team at The University of Kansas Health System opted to swim upstream, reversing course in a way, consolidating operations. They closed their 40,000-square-foot warehouse and returned to working with a distributor (Owens & Minor) to handle bulk, stockless and physician preference item products. By integrating disparate supply chains within the organization (including 120 ambulatory departments and facilities operating independently) and shoring up distribution partnerships, Supply Chain was able to book $4 million in bottom-line savings. Participating in Captis (Vizient) helped them generate more than $40 million in expense reduction and revenue enhancement for supplies, equipment and services during a two-year period. Supply Chain also linked its IT capabilities with the OR through Epic and GHX.