This year’s Bellwether League Foundation Leadership Forum focused on the expanding role of the healthcare supply chain. The event, held at Marquette University on October 2, was moderated by Carl Meyer, who was inducted into the Bellwether Hall of Fame for Supply Chain Leadership in 2019. The panel included two other Bellwethers both inducted in 2022: Ed Hisscock, senior vice president for supply chain management at Trinity Health, and Tom Lubotsky, Vice President, Supply Chain at Allina Health in Minnesota. They were joined by two healthcare distributor executives: Sue Czajkowski, Vice President, Technology, Innovation and Clinical Products, Owens and Minor, and Kyle McMullin, Marketing Director, Medline Industries.
While each of the panelists brought varying perspectives and experience to the panel, they were relatively aligned when asked about the evolving challenges for supply chain professionals and how their own organizations are rising to meet the demands for a more affordable and equitable healthcare system. I have summarized some of their comments below:
Both Lubotsky and Hisscock spoke to how the supply chain can play a greater role in addressing health disparities that disproportionately plague the poor and communities of color. For years, health system supply chain leaders have sought to increase the percentage of their spend with diverse suppliers, generally defined as those owned and operated by traditionally underrepresented groups, such as women, minorities, veterans, and persons with disabilities or identifying as LGBTQ. More recently, those efforts have shifted to direct more of that spend with local suppliers who employ individuals from disadvantaged communities. Having a satisfactory job that pays a livable wage is considered one of the most important social determinants for good health.
Lubotsky spoke about the importance of collaboration among healthcare providers, noting how a health system serving patients on the westside of Chicago created a shared laundry business that employed individuals in the community. You can read more about how supply chain’s role in supporting health equity on Chicago’s west side in the June 2021 and December 2022 issues of Value.Delivered., accessible on hpnonline.com.
As a distributor, McMullin spoke to how Medline is evaluating if it has not only the right mix of diverse suppliers but also products that can meet the health needs of diverse populations. In late 2020, as the world witnessed higher rates of disease and death from COVID-19 among minorities, the FDA called on healthcare manufacturers to include more diverse populations in clinical trials to understand the efficacy of products on all patient populations.
Expanding Care into the Community
The global pandemic also accelerated the trend toward more patients being cared outside of the acute care hospital and in particular in their homes. This move presents a logistical challenge, given the exponential increase in delivery points for medical products. In recent years, Owen & Minor has made investments that have expanded beyond its traditional acute care distribution business to support more direct to the patient in home care. The company is now working to create more synergies between the two to support more seamless care across the continuum. Medline is on a similar journey.
Both Allina and Trinity are also making changes to support care in the home. Trinity now delivers not only medical products to patient homes, but also the technology to support remote care, including electronic tablets and Bluetooth enabled scales and blood pressure monitors. The supply chain must also manage the reverse logistics to retrieve those devices when such care is concluded. Allina, meanwhile, has expanded the number of hubs where nurses visiting patients in their homes can pick up necessary supplies, which they say can vary based on the patients’ changing conditions. This is particularly true for hospital at home programs that treat higher acuity patients than those receiving more traditional home care.
The question being studied by both Lubotsky and Hisscock is what is the best path to provide such services in the most efficient manner, either on their own or with an outsourced partner.
Leveraging Data and Technology
For all four speakers, mining data is key to answering these and other questions. McMullin noted how payor mix further complicates the issue. As an example, he described how a physician could prescribe a particular piece of durable medical equipment for a patient being treated at home but that depending on his or her insurance, the exact product and DME supplier could be dictated by the payor. Differing classes of trade – from hospital to home- can also impact the price a provider is paid and/or reimbursed for certain healthcare products, especially pharmaceuticals.
Hisscock also emphasized the importance of data to both understand and reduce the cost to serve. In other industries, he says suppliers know how expensive it is to serve different customers, which in turn can impact the price paid. In contrast, he says cost to serve is not well understood by healthcare suppliers, beyond the fact that selling, general and administrative (SG&A) costs are much higher in healthcare. The best way to tackle cost to serve, he says, is by getting better at predicting and sharing demand with suppliers. Czajkowski agreed, adding that investments in artificial intelligence and data science can help manage the growing complexity (from demand forecasting to logistics), while also automating more repetitive tasks to allow for time to work on more strategic initiatives. While Hisscock encouraged his peers to hone their supply chain expertise, he agreed with Czajkowski who called for more cross functional collaboration across supply chain, financial, and clinical and other functional leaders to manage the myriad of variables that impact our respective ability to deliver what patients need, when and where, to optimize health.