New logistics market modeling involves more clinical coordination between Supply Chain, providers, suppliers

As many healthcare services continue to expand and migrate outside of the hospital setting with the momentum accelerated by the COVID-19 pandemic, hospitals and their product and service suppliers face challenges on how to cope with patient management outside of their direct purview while retaining some degree of accountability and responsibility for outcomes.

In short, the post-pandemic healthcare arena poses something of a conundrum for hospitals, and even for the closer-proximity ambulatory surgery centers, outpatient facilities and physician practices, in that patients may be taking more charge of their healthcare (via telemedicine and the like) but the healthcare providers still retain more of the risks.

This poses even more questions for hospital- and IDN-based supply chain executives and professionals that historically have fortified acute and non-acute care facilities with products and services but now must oversee the patient’s home as an extension of their management and service scope.

Supplier-based supply chain experts and observers remain mixed about this transitional development. Some acknowledge the fears and uncertainty with how it all will play out in the long run. Others see the migration as inevitable, so providers need to prepare now. Still, others welcome the moves as viable evolutionary progress that was happening slowly anyway until a global pandemic pushed it forward faster.

The patient’s care continuum represents multiple links in a chain.

“Care does not begin and end in a single visit with a physician,” said Jake Crampton, CEO, MedSpeed. “To make the visit as effective as possible, a patient may need to monitor themselves or have lab testing before or after the visit. Even telehealth visits often end with a pharmacy prescription the patient must collect for treatment to begin. Longer-term remote patient monitoring in acute-at-home or visiting-nurse settings often comes with a large quantity of supplies and DME. For remote care to be successful long-term, coordinating all activity surrounding the visit (whether telehealth or traditional) is the challenge healthcare must solve.

“Each touchpoint and interaction the patient has along their care journey contributes to their overall experience,” Crampton noted. “Even something as seemingly simple as the delivery of a pharmaceutical to the home represents an extension of the care team to the patient. Careful coordination and design are necessary to make each of these interactions high-quality.”

Each link in the chain is unique.

“There are a lot of variables like reimbursement, products, technology and patient/episode of care that everyone is trying to solve for,” indicated Zach Pocklington, Senior Vice President, Medline’s Post-Acute Care division. “We have been working with several large systems to solve these challenges and each one is unique. As CMS puts greater focus on its Acute Hospital Care at Home program, allowing to bill for higher acuity care patients in the home, there is the ongoing challenge of capital expenses for telehealth and remote patient monitoring. In addition, systems need to determine who will monitor those remote patients, and we are seeing more customers facilitate that monitoring through third party vendors.

“To help create efficiencies around patient monitoring, Medline launched a partnership in 2020 with VitalTech, a virtual care and remote patient monitoring platform that assists in improving patient care through continuous patient monitoring that provides real-time data to guide care management,” Pocklington added. “The HIPAA-compliant platform helps improve patient outcomes at a lower cost while reducing readmission rates, providing billing output for the new CMS RPM CPT codes and tracking time spent with patients for auditing and billing purposes.”

Connecting the links is incredibly complicated.

“Expanding the care environment complicates the logistical delivery of healthcare. That said, when we can better serve patients across the continuum of care, we can improve outcomes and reduce costs. It’s important that we view any challenges through this lens,” recommended Chris Luoma, Senior Vice President, Global Product Management, GHX.

“One of the main financial challenges is the increased costs around the last mile,” he continued. “Products will be delivered to multiple locations across geographies. This will require investments in more storage locations, more drivers and more robust technology to track shipments and deliveries. As care moves to a patient’s home, supply chain teams will also need to coordinate around episodes of care, shifting to an ‘all in one box’ approach. This will require the exchange of normalized data to improve visibility, transparency and coordination. The data will also provide historical insight about the most common care episodes that take place in the home, including products used in that care, which will help supply chain teams better prepare for deliveries. Supply chains will also need some level of just-in-time (JIT) inventory in the event something not on hand is required. And the healthcare industry overall will need more supply chain talent on site. We need to nurture and recruit more supply chain expertise for the industry.

“From a technology perspective, providers will need to make investments that extend ERP, inventory or warehousing tools beyond acute care,” Luoma noted. “Suppliers and providers will also need to ensure interoperability among different platforms and normalize the data that’s being shared for consistency and accuracy. This transparency will allow providers and suppliers to collaborate to optimize care delivery and support for each patient. We will also need web-based, user-friendly tools to ensure patients have a familiar, consumer-like experience. The opportunity ahead for suppliers is leveraging data to create greater transparency about real-world evidence. Suppliers can share data that shows which products have been used, where and what outcomes were achieved. This can help inform supply chain team’s decisions on sourcing and stocking.”

Market dynamics must spot and roll with changes.

“The corporate hospital supply chain team may no longer be involved with the non-acute supply chain model,” posited Doug Heywood, Managing Partner, RDA. “The non-acute market used to be viewed as ‘secondary,’ but this is quickly changing. The non-acute market will use different information systems, ordering systems. The staff involved with the ordering and put away will not be supply chain staff, but most likely clinical staff or front office staff. The large nationally based non-acute organizations have their own standalone information systems separate from the hospital.

“The hospitals do a better job of getting clinicians out of the supply chain business,” Heywood acknowledged. “The hospitals have the staffing infrastructure to have Supply Chain staff perform supply replenishment functions. Non-acute locations are smaller and have less staff. Unless it’s a large non-acute location, most have a difficult time justifying staff dedicated to Supply Chain functions.

Since the data will reside on a different information system, or on the distributor’s information system, managing and analyzing trends will be more difficult,” he said. “It will become more critical to measure performance using comparative industry indicators rather than benchmarking against internal indicators. Large hospital IDNs will develop their own internal analytics that have the ability to grab large data sets from multiple information systems. RDA has developed Demand Logic that has the ability to pull data from multiple information systems and perform analytics across the acute and non-acute locations, multiple distribution channels as well as comparative analytics.”

The changes are normal and should be welcomed.

“Prodigo Solutions views provider supply chain extension into home health as natural and achievable,” insisted Michael DeLuca, Executive Vice President, Operations, Prodigo Solutions. “Provider Consolidated Service Centers (CSCs), for example, can and likely should be used to support these models and ensure patients piece of mind that the medical surgical supplies and DME needed at the end of the visit are ordered through their process, their technology, their system. Supply chains can extend functionality like provider-operated marketplaces to allow the home health clinician to request, order and specify delivery to homes, either through a contracted distributor, third party logistics provider or common carrier.

“For example: Today roughly 25% of the largest IDNs by net patient revenue (NPR) order their medical/surgical supplies through Prodigo’s Marketplace. Simply extend that functionality to allow home health clinicians or patients themselves to order from contracted suppliers through that same portal (via credit card). Essentially take the B2B model and extend it to B2C. It’s a natural extension that allows healthcare providers to capitalize on their expertise and leverage their supply chain sourcing and inventory management functions. And it keeps supply orders in their circle.”

Reconfiguring operations is more organic and pervasive.

“With more care (low and high acuity levels) occurring outside the hospital walls both virtually and in person, many hospitals and health systems are not just merely re-orienting their hospital supply chain to the home,” observed Philip Parks, MD, MPH, Vice President, Healthcare Innovation, at-Home Solutions, Cardinal Health Inc. “Instead, the coordination and delivery of care, goods and services is configured based on the clinical need and the level and type of care occurring in the home. For example, if a patient is receiving care for congestive heart failure in their home versus as an inpatient, the care is typically coordinated by physicians, nurses and/or paramedics in a ‘command center’ that manages ‘virtual service lines’ of patients ‘admitted’ to hospital level of care in their home. The healthcare provider services and tasks, medications, supplies and DME must be fulfilled. Some of these categories of goods and services come from the hospital resources, and others are coordinated through outside partners such as Medically Home, a technology enabled hospital-at-home company based in Boston, MA. [Cardinal Health strategically invested in Medically Home in January 2022.] Other companies in this space include: Biofourmis, Contessa, Dispatch Health and Current Health.

Financial/reimbursement challenges: “From a reimbursement perspective, hospital-at-home programs are currently enabled for Medicare members through a CMS waiver that is linked to the public health emergency,” Parks continued. “Most commercial payers are not currently providing reimbursement for hospital-at-home programs. Early indications are that Medicare Advantage plans are establishing contracting and coverage for hospital-at-home programs. On the positive side, these programs have been shown to provide care at a significantly lower cost versus inpatient admissions.

Operational Challenges: “An evolving operational and regulatory challenge is formally establishing quality measures for virtual care, telehealth and hospital-at-home programs, as well as regulatory standards that are needed to ensure and guide quality and safe healthcare delivery models. Change management including people, processes and technology is a heavy lift for hospitals and requires full alignment and commitment from leadership teams, clinical leaders and all service lines involved.

Collaboration and teamwork: “When a hospital or health system decides to launch a hospital-at-home program, the hospital clinical and supply chain teams work closely with the external goods and services providers to develop a roadmap and playbook. This playbook is comprised of clinical care pathways (aligned with DRGs) and a care and supply chain coordination and delivery plan with agreed upon service level requirements, redundancies to ensure resilience, and a plan for technology enablement and integrations (EMRs/EHRs, supplier EDIs/interfaces). The playbook is then simulated to test and discover defects before going live with real patients. The configuration of the supply chain to support care in the home usually involves a combination of services from hospital and external goods and service providers including from pharmacy, imaging, laboratory, respiratory therapy, medical supplies, DME/oxygen, nursing, physicians, paramedics, discharge planning and social work.”