Shattering myths about clinical integration

Feb. 24, 2020

Searching for quick results – in theory at least – a less experienced Supply Chain professional’s perspective about clinical integration easily slips into the tactic of “showing docs the data because they’re scientists” as if this is some mathematical equation on persuasive prowess.

Entrenched Supply Chain veterans, however, know that clinical integration instead calls for developing deep and meaningful business relationships with highly educated men and women who practice medicine and want to ensure their practices remain operational and reliable to care for patients. Certainly data remains a key component of those efforts.

Some contend that clinical integration extends beyond contract compliance, product evaluations and selections, value analysis and other supply chain-oriented functions. And yet it may involve all of these but not be limited to any or all.

From a top-tier Supply Chain perspective, clinical integration encompasses an acknowledgement and understanding of physician, surgeon and nursing needs, a fluid and seamless incorporation of their viewpoints in all discussions and decisions as standard operating procedure and a mutual aim to provide care services to patients.

The question lingers, however, on how deep and far does this philosophy burrow itself within Supply Chain mindsets, and if it remains shallow and near, how fast and long will forward momentum take?

Well, what is it?

Supply Chain seems to vacillate and waver on just what clinical integration means, let alone entails.

David Marcelletti, Vice Chair of Operational Excellence, Mayo Clinic, Rochester, MN, wonders whether the topical squishiness can be traced to a misunderstanding or an incorrect interpretation.

“I believe that it depends on who you ask (i.e., clinical leadership, physicians, nurses, supply chain staff, etc.) because you may get very different answers depending on their perspectives,” Marcelletti told Healthcare Purchasing News. “It also depends on the supply chain maturity of the organization – are you embedded in the practice areas managing supplies with sophisticated processes and systems or are you a contracting and procurement organization [that] drops the supplies off at the department with little to no management at the point of use?”

Marcelletti questions physician involvement in an organization and the process.

“Are there physician leaders partnered with Supply Chain Management, Finance, and/or Revenue Cycle?” he asked. “Are business decisions made by committee, and if so, who’s involved? Is Supply Chain involved in decision making recommending/partnering with the clinical practice or does Supply Chain only supply the data and the execution?”

Much hinges on credibility and the effort to achieve it, Marcelletti insists.

“As with any relationship, it takes a lot of work to establish credibility and maintain that credibility with the clinical practice,” he indicated. “Clinical departments will watch and test the supply chain to see if they are truly serious about ‘clinical integration’ before the clinical department will go all in. A clinically integrated supply chain is not just contracting; it involves all functions across the entire end-to-end supply chain process. Clinical integration is not for the faint at heart and it does not happen overnight. Clinical integration will take years as the supply chain must establish credibility and continuously demonstrate they are a trusted partner with the clinical departments over time.”

But it also could stem from differing perspectives, according to Jimmy Chung, M.D., Associate Vice President, Perioperative Portfolio, Providence St. Joseph Health, Renton, WA, and a member of HPN’s Editorial Advisory Board. The coin is double-sided.

“Often, [Supply Chain Management] assumes that clinical integration means educating physicians about standardization and reduction of variation,” Chung noted. “However, true clinical integration also means educating SCM professionals about meaningful clinical outcomes and how SCM/operational leaders and clinicians partner to achieve the best patient outcomes. Because SCM professionals don’t have visibility or accountability for patient outcomes outside the hospital, they may not realize the total cost implications for each episode or patient.”

Thankfully, Gary Fennessy, Vice President and Chief Supply Chain Executive, Northwestern Memorial HealthCare, Chicago, IL says he doesn’t struggle with clinical integration at his organization.

“For well over eight years we have had a physician adviser on our Supply Chain team to help support our initiatives,” Fennessy said. “In my peer group of supply chain executives I never hear about short-changing clinical integration. Usually [I hear] more about how do we find the right individuals from the clinical side who want to support supply chain initiatives.”

In fact, Fennessy fully endorses having a physician adviser integrated into supply chain initiatives. He promotes the physician as a “tremendous asset in terms of helping us understand what could the roadblocks be from the lens of the physician or caregiver,” and “further provides clinical validation on assumptions and communications.”

“Organizations should leverage clinical leadership whenever possible,” he added. 

John Cherf, M.D., MPH, MBA, Chief Medical Officer, Lumere Inc., a GHX company, Chicago, and former Chief of Orthopedics, Advocate Illinois Masonic Medical Center, Chicago, sees this as a developing work-in-progress.

“Health systems around the country are seeking physician leaders to support and improve clinical, operational and financial improvement initiatives,” Cherf told HPN. “However, the industry as a whole still has a long way to go before we can declare that we are ‘there yet’ when it comes to operating as a truly clinically-integrated supply chain.

“I predict we will see much greater clinical involvement in supply chain activities over the next five to 10 years,” he continued. “This will be driven by a heightened degree of integration between providers and pressure to act on value-based care market demands. We should expect to see physicians having a greater role in supply chain activities. This will be driven by new payment models and the need to document value with optimal quality and cost to be competitive in an increasingly transparent marketplace.”

Cherf earned 2019 P.U.R.E. designation by HPN for being a Supply Chain-Focused Physician. [For details, visit].

Suzanne Smith, R.N., Value Analysis Solutions Advisor, Lumere Inc., remains optimistic, expressing that the two are drawing closer all the time. “From an awareness perspective, healthcare supply chain professionals have known for a long time that incorporating clinical stakeholders into their workflows is essential,” Smith indicated. “There are excellent role models out there who are willing to share their learnings, but greater industrywide networking and outreach is crucial to getting hospitals even closer to this new paradigm.”
Shaun Clinton, Senior Vice President, Supply Chain Management, Texas Health Resources, Arlington, TX, bristles at the perceived hullabaloo over clinical integration’s role in supply chain operations.

“The healthcare supply chain at its core is clinically integrated and to suggest otherwise or attach a term to it feels wrong,” Clinton asserted. “I’m not 100 percent sure where the [point of view] comes from that says the healthcare supply chain is not clinically integrated. I don’t know of a single supply chain that exists in a vacuum. Demand comes from somewhere. It is some sort of integration with this ‘demand’ that produces a supply chain to begin with. The question for me has always been ‘what level of (and type of) integration is necessary to get the right thing to my customers?” Again — a core tenet of any supply chain.” 

Clinton recalls a hospital Lean project he helped lead many years ago. “When all was said and done and we had mapped out the process from the procurement of an item to its eventual use, it became clear to everyone involved that the only real value-add step in the process was when the item was used in the provision of care. That, more than anything else, convinced me that clinical integration exists as a fact, not a goal, of the healthcare supply chain.”

The clinical integration practices of Mayo and Northwestern as described by Marcelletti and Fennessy, respectively, and the assertions by THR’s Clinton apparently remain well above the norm, however.

“Commonly, we see organizations that believe they are clinically integrated, yet, by our assessment, they are falling short of a truly comprehensive clinically integrated supply chain,” said Daria Byrne, EdD, R.N., Vice President, Clinical and MedSurg Solutions Consulting, Intalere.

“Value Analysis, while a great step towards clinical integration, is not all encompassing,” Byrne continued. “Healthcare organizations have an immense opportunity to place a strategic emphasis on a clinically integrated supply chain. So much of that simply begins with the belief that ‘we can do better,’ ‘we should do better’ and ‘we can do things differently than we’ve done before.’ Healthcare is evolving, and we need to acknowledge that the supply chain function and the clinical function are better with strategic collaboration and a mutual understanding of how both critical areas have the same goal in mind – to drive quality care.”

Much depends on Supply Chain’s influence within a healthcare organization and its focus on issues beyond pricing, according to Erik Axter, Managing Principal, Vizient Inc., Irving, TX.

“It’s easy for supply chain professionals to short-change the idea of formal clinical integration when they aren’t in a position to challenge organizational precedent and inertia in the effort to reduce non-value added variation in goods and services,” Axter said. “They understand that price reduction on their current mix of supplies and services will only take an organization so far, and the key to unlocking value beyond price is through clinical integration. Thus far, few health systems have truly moved beyond giving Supply Chain a savings target as opposed to setting cost and performance improvement goals at the service-line level where Supply Chain is one of many contributors. Until there is a true push to align the incentives of the physicians with that of the overall organization, they have a right to be skeptical.”

Axter also acknowledges the difficulty of Supply Chain integrating itself within clinical and top-tier administration issues.

“Transforming a supply chain into a trusted partner entity within an organization is a complex and multi-step process that needs an executive-supported strategy,” he noted. “It also requires an organizational investment in creating a physician decision-making body, having credible informatics for physicians that show opportunity beyond price, setting expectations for all involved so they are collectively accountable to drive performance improvement as well as a measurement platform.”

With healthcare providers aiming to deliver higher-quality care at lower costs to remain financially solvent, along with value analysis and clinical integration both essential to optimizing care delivery, Supply Chain’s roles during the last decade have had to evolve, observed Shannon Candio Hunt, Vice President of Academic Initiatives, Premier, Charlotte, NC. In fact, their roles and responsibilities have shifted from contract management and the logistics of ensuring adequate supplies to focusing on total cost of ownership and outcomes, she added.

“While clinical integration once called for a primary focus on negotiating the lowest-acquisition cost, today it is imperative that Supply Chain professionals broaden their roles to incorporate the total cost of ownership and outcomes, including elements such as: reimbursements, patient experience, trusting physician partnerships, organizational improvements, outcomes-driven data, key performance indicators, safety, infrastructure to manage risk, patient outcomes, and disposable and capital equipment costs,” Candio Hunt said. “Healthcare providers are recognizing that unless clinical integration is prioritized, mounting market pressures may force them to act differently or close.”

Further, she indicates from her research that recent information points to industry reimbursement cuts that exceed $250 billion during the next decade as inpatient revenues continue to decline.

Lumere’s Cherf believes supply chain professionals see the value in clinical integration, but they often don’t know where to begin to bring about the shift.

“It’s highly likely they have been burned in the past when trying to institute change among physicians, do not have access to or an understanding of data that physicians need to properly engage, lack a physician champion or lack institutional incentives for collaboration,” Cherf listed. “The framework for clinical integration simply has not been developed in many systems. Developing an operational process is one of the biggest stumbling blocks supply chain professionals face and must be cleared before true improvement can be achieved. The most important thing to remember is that physicians care most about improving patient outcomes – demonstrating how this can be improved through a greater degree of collaboration between supply chain and clinicians is key to establishing a healthy partnership.”

Lumere’s Smith concurs, citing “previous failures, lack of executive support, competing priorities, fear of upsetting physicians, and belief that suppliers have the stronger relationships with physicians all contribute to a lack of forward momentum,” as culprits clotting process improvement.

Cutting through clutter

Clinically integrating the supply chain need not be so complicated operationally beyond personality clashes. Some teams – such as Fennessy’s at Northwestern – incorporate physician advisers for active decision making. Other teams – such as Chung’s at Providence St. Joseph – have physicians on staff. Still others rely on their group purchasing organizations (GPOs) that employ physicians and clinicians as consultants or other external, third-party expertise from independent consulting firms and even suppliers that have physicians and clinicians either on staff or on call.

But they shouldn’t be rubber stampers, turf builders or window dressing.

“Adding clinical advisers or leaders on the Supply Chain staff is one solution but it must be done with a definite purpose, and the clinician must be aligned with organizational goals,” Chung urged. “Developing an internal structure that is accountable for total value of care that includes both clinicians and SCM leaders would be more successful.”

Mayo Clinic’s Marcelletti recognizes that incorporating physicians in any of these ways at least advances clinical integration. After all, his organization is physician-led.

“SCM executives should seek to partner with physician leadership to do just that – partner and be seen as a trusted business adviser to the practice,” he noted. “When picking a physician to partner with, it is important to select one that has the time and interest in working with Supply Chain. Mayo Clinic has experienced very positive progress by engaging physicians in a formal leadership role within Supply Chain as well as developing strong physician relationships in the practice areas that we rely on as part of the decision making process along with supply chain professionals. We have also found a big benefit to clinical integration is to move SCM staff out of the back office and reside in the clinical practice. Physical presence goes a long way to build relationships.”

Intalere generally offers four initial recommendations to drive clinical integration in the supply chain, according to Byrne.

First, is to simply establish a shared purpose and common vision with key stakeholders from both functions. “Champion buy-in from all constituents and allow them to witness the strategic emphasis that has been placed on supply chain-clinical collaboration,” she said.

Second, allow clinicians (physicians and nurses) to have a seat at the Supply Chain table. “Clinical subject matter experts, specifically clinicians at the bedside who are still caring for patients, should have a voice in supply chain decision making, especially when decisions impact the delivery of care,” she recommended.

Third, both functions need a solid foundational understanding of the other. “When onboarding new employees, especially clinicians not familiar with the supply chain function, they need to be introduced to the inextricable link between supply chain and clinicians,” she said.

Finally, [facilities] need to acknowledge that novice clinicians who comprise a significant population of the clinical staff may not be familiar with the supply chain function at all. “We need to emphasize a clinically integrated supply chain culture as we onboard and discuss processes on clinical units allowing these impressionable minds to understand that without one another, we cannot provide safe, quality care,” she added.

Vizient’s Axter acknowledges that each organization remains unique in how its clinicians interact with supply chain but the path toward mutual visibility and support can be closely tied. “It’s an effort that requires diligent planning with the long-term objective clearly defined, broadly communicated and supported by senior leadership,” he indicated.

Still, a typical pathway, according to Axter, starts with developing a thoughtful supply chain transformation strategic plan that often includes the following critical elements:

  • Internal assessment of supply chain talent, operations, data capabilities and foundational elements to support a paradigm shift
  • Crisp alignment with an organization’s overall strategy
  • Visibility and support from the executive team
  • Scalable data capabilities to provide comprehensive total cost, outcome and economic informatics to support informed decision making
  • Consideration for incentive alignment from the clinical enterprise
  • Diagnostic clarity on what’s currently in place and how to re-shape, re-structure or re-build entirely

Axter recommends demonstrating to the organization that a sound plan exists as the first step. Next, ensuring credible informatics to fuel the performance improvement conversations beyond price should be second. Finally, it’s imperative that the organization is told and knows that these efforts are designed to achieve “non-value-added variation reduction,” he advised.

“Establishing the right structure, data, process and expertise for your organization is essential, and this is where assistance from clinical integration experts outside of your organization can be helpful,” he said. “They have seen what works and what doesn’t based on a unique environment or culture and can help facilitate and expedite results. They can also help craft the messages, set unbiased goals and targets and drive sustainable performance improvement measures.”

Hospitals needing to reduce costs safely while improving outcomes is quickly becoming standard operating procedure, according to Premier’s Candio Hunt. That’s why clinical integration efforts must extend beyond products.

“Supply chain purchases typically account for 15-30 percent of hospitals’ operating expense,” she noted. “According to market research, more than 10 percent of this spend could be cut through a successful value analysis program focused on improving standardization and utilization management. Premier is seeing clinical integration yield cost-savings and stronger organizational alignment when these multidisciplinary value analysis teams, which include physicians, expand their scope outside of just products and services, focusing on overarching improvement opportunities.”  

About the Author

Rick Dana Barlow | Senior Editor

Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].