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The Ten People to Watch
Current responsibilities include:
Brian Bravo: When I first joined Broward Health, there was little electronic functionality within the supply chain. We were using Lawson for enterprise resource planning, but we also did a significant amount of manual work. I engaged Global Healthcare Exchange (GHX) to help us automate our ordering process and implement full electronic data interchange (EDI). Today, we work with over 100 vendors on EDI. We also are using GHX to implement an electronic Web-based requisitioning system (Catalyst) with a built-in process flow, which permits greater compliance with our purchasing policies. I have successfully rolled out this system to all of our 950 departments (976 users) in our IDN. Catalyst interfaces with Lawson, [providing us with] a true electronic purchasing environment, from requisition to delivery. In addition, [I helped] implement a new GPO and redesign our supply chain system. In December 2007, we chose MedAssets to become our primary GPO. We began implementation in January 2008 and finished converting all of our pharmacy, med/surg and food and nutrition contracts by the end of the first week in June. We literally converted all of our pharmacy contracts overnight. I made a call on a Thursday, and by Saturday, we had moved all of our contracts. This was only possible with the support of MedAssets and McKesson, our pharmacy distributor. JHC: Describe a project you are excited to implement. Bravo: Our partnership with MedAssets continues to unfold. Our next step is to roll out the MedAssets S.I., a Web-based system that analyzes all supplies purchased, receivables and contracts, and then aggregates this data into a format we can [work with]. The result is a more cost-effective supply chain and greater contract compliance. We also plan to roll out MedAssets’ CrossWalk system, which links our supply cost data to our patient charge data. Finally, we will use the MedAssets CIF system to help us standardize our supply chain data. JHC: What is the most important quality you look for in a supply partner? Bravo: Many suppliers deliver good contracts, but few deliver true partnerships with no hidden agenda. Medline has demonstrated outstanding partnership qualities by placing patient care as their number one priority. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Bravo: The cost of raw materials is going up, fuel prices are at a record high and healthcare faces tremendous cuts. It’s only a matter of time before suppliers will have to increase their prices to remain viable. It will take skill on all sides to determine the best course of action and [successfully] manage future contracts.
Current responsibilities include:
John Gaida: It is most challenging trying to reduce expenses in the implant arena. We have had some luck reducing orthopedic implant costs in one of our larger hospitals. [At times, Gaida and Texas Health Resources have found it more effective to seek to obtain the same price for every brand of a specific implant, rather than telling physicians they can only deal with one or two vendors. In some cases, the IDN attempts to set pricing as a percentage of reimbursement, so that as reimbursement goes up and down, the price of the product fluctuates as well.] JHC: Describe a project you are excited to implement in the near future. Gaida: There actually are two projects I am excited to begin. We are trying to incorporate programs with GHX, Premier and the Association for Healthcare Resource & Materials Management to see if we can truly find comparable [services] to what we do, in order to improve our performance. In addition, we are centralizing clinical engineering programs across our system. We have begun to create a system-wide program that consolidates this function in order to reduce costs, and better control and standardize services. JHC: What is the most important quality you look for in a supplier partner? Gaida: Integrity. That means, doing business in an ethical way, which supports the goals of the health system. This goes for every rep and corporate leader in the company. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Gaida: Payers entry to the field. We have heard that third-party payors are beginning to look at contracting directly with the manufacturer for some implants. If this really happens, it will greatly change the face of implant purchases.
Current responsibilities include: Mike Hildebrandt: While serving as the director of materials management at High Point Regional Health System, I won the VHA Supply Chain Leadership Award in 2006. The Leadership Award was the result of several innovative cost savings initiatives ($2.5 million), featuring Supply Chain Scorecards, capitated programs, GPO compliance, supplier partnerships and spotlighting the role of the clinical RN in supply chain. JHC: Describe a project you are excited to implement in the near future. Hildebrandt: I am very excited to work with Arizona State University to conduct a research project entitled, "Health Information Technology for Supply Chain Management - Best Practices and Implications for Hospital and Health System Performance." This project is designed to correlate the level of IT sophistication with supply cost performance results. In addition to this project, Scottsdale Healthcare System is actively supporting the AHRMM/SCMetrix ™ national supply cost benchmarking program. JHC: What is the most important quality you look for in a supply partner? Hildebrandt: In looking at supplier partners, the most important qualities [we consider] are trust and integrity. In an ideal situation, the health system and vendor partner should be able to share strategic goals and objectives, meet routinely to ensure success, and collaborate and establish win-win scenarios. Owens & Minor has exemplified this type of partnership. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Hildebrandt: I believe that in the next five years, health systems will strive to reduce costs and improve processes by reducing the number of overall vendors and establishing key strategic partnerships with progressive vendors.
Current responsibilities include:
Vance Moore: The most rewarding efforts for me have been the degree of business integration that we are seeing with both our hospital customers and our trading partners. This integration has led to the development of a supply chain council, which helps determine the future focus within the supply chain. [Our] participative approach has led to recent successes, such as our private label program, "Mercy - the Mark of Quality." This program allows us to work directly with manufacturers to develop products that meet the needs of our Mercy customers, while at the same time reduces much of the SG&A expense traditionally built into the costs of traditional branded products. In addition, the development of a system formulary for pharmaceutical products has driven a 45-percent reduction in total SKU’s and over $2 million in bottom line savings. JHC: Describe a project you are excited to implement. Moore: As our business model has matured, it has gained interest from other IDNs. This interest and potential collaboration with other like-minded IDNs is very exciting to me. In the past, I think we often depended on commercial parties to create new solutions to solve our problems, but today I think there is a true belief that we can take more control of the supply chain. It is my hope that IDNs can come together, challenge the existing model and commit to driving out unnecessary cost. In addition, we are focused internally on a couple of major initiatives, including the execution of a self-manufacturing operation for custom procedure packs integrated with our consolidated service center, and the development of standard protocols for utilization management across the system. JHC: What is the most important quality you look for in a supplier partner? Moore: I look for trust [first and foremost]. I also look for several key attributes, including good listening skills, a long-term mentality and simplicity. We are a one-product, one-price type of organization. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Moore: We will see an increase in the corporatization of provider networks. Most large IDNs are investing in corporate ERP systems, [and we are seeing] significant variation across networks in product use and pricing. As providers drive out variation, they will create more defined contracts that will reward trading partners that prove the clinical, operational and financial value of their products and services.
Current responsibilities include:
William Mosser: Two years ago we started working with our perioperative team at Temple University Hospital, our academic medical center, on the redesign of their inventory management program. From the beginning, our approach was to help the perioperative leadership understand that supply chain is a broad-reaching function, not a department. Our goal was to provide the education, tools, culture and commitment to excellence that would allow the perioperative team to be totally self-sufficient in managing their business operations, including all aspects of supply chain responsibilities. Their goal was simply to have resources in place to provide top quality patient care. Neither of us clearly understood how these different [approaches] could be aligned, but we did understand that we needed to build a culture of interdependence to be successful. We now have a team comprised of perioperative leadership, supply chain leadership and staff, IT leadership, and key vendors, who meet routinely to implement an integrated surgery management program. JHC: Describe a project you are excited to implement. Mosser: Since we now have a team that works together, our next step is to implement a redesigned process that incorporates online scheduling, up-to-date resource maps, an accurate and timely item master, and point-of-use supply systems to front-end every case, such that the supplies and instruments required for the case are in the room when they are needed. JHC: What is the most important quality you look for in a supplier partner? Mosser: Three qualities that immediately come to mind are agility in maintaining support for current operations while supporting and sharing new ideas; technology; patience and a willingness to understand our needs and align goals, regardless of sales targets; and a documented history of industry change-leading behavior. VHA and Cardinal Health have been fairly successful in demonstrating that capability and willingness here at TUHS. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Mosser: The biggest change I hope we see in healthcare contracting is a shift to a methodology that is more aligned with that used in more mature industries, such as automotive and grocery. In healthcare, we’re still focused on negotiating prices but are doing so in an "uninformed" and "unleveraged" manner. We still see too much "we vs. them" attitude. The result is that we still have too much emotion in our decision making process.
Current responsibilities include:
David Peck: [The most rewarding projects] have been the various standardization programs that are offered by our GPO. When I arrived, the hospital was not participating in any of the programs that were offered. We also had less than a 30 percent contract penetration on our GPO contract offering. We started reviewing our various spending patterns, and quickly realized that we were missing out on quite a bit of value by not subscribing to the various standardization programs. Once we made the commitment to participate, we saw our contract penetration rise to over 80 percent. To date, we have received more than $175,000 in administrative fees from our GPO. JHC: Describe a project you are excited to implement. Peck: Over the next 12 months, the hospital will be implementing a new information system, in which the purchasing/supply department will be taking part in as well. It will be a challenge to implement the program across the spectrum, but for the first time, we will be fully integrated from a supply/purchasing perspective with nursing and other various patient care departments. We expect to see our patient charge capture increase, which will give us better visibility of what is being used and how our supply dollars are being spent. JHC: What is the most important quality you look for in a supplier partner? Peck: Being a community hospital, our suppliers are just that: "partners". When it comes to supply spend, we view them not as business associates, but as one of the team. We look to the community as much as we can to utilize our local vendors [with regard to most] of our non-medical purchases, such as telephone services or copiers. We feel that they are just as invested in our hospital as we are, and that they will make every effort to ensure we get the best pricing available. Medline Industries is one supplier that exemplifies the qualities that we look for in a supplier partner. They are constantly looking to find different and better ways to help us with our supply spend. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Peck: Creativity. Healthcare purchasing/contracting is no longer about the best pricing on a single commodity item. Materials managers continuously must find opportunities to save their institution [money]. With today’s rising energy/food/production costs, the healthcare institutions that are going to survive will need to be creative in the way they purchase commodities. They will have to partner with institutions that [presently] are competitors, or with businesses that aren’t even in the healthcare industry. And, they will need to look for creative ways to store bulk purchases in order to save on future price increases.
Current responsibilities include:
Steve Pitzer: In 2007 I led the development of a strategic five-year outlook for the supply chain. A key element of the plan was to initiate a finance resource group, which represents each region’s finance division. This multi-disciplinary team of controllers, accounts payable leadership, system finance, treasury and supply chain has established an active dialogue and partnership between supply chain and finance, bridging and aligning strategies between the two. A critical link in the five-year outlook is automation from the point-of-care to the point-of-payment. Today, CHRISTUS Health has distinct initiatives to facilitate this, including advancements in electronic invoice matching and, ultimately, electronic funds transfer and the elimination of paper checks. To complement this effort, CHRISTUS and Broadlane, our GPO and operations improvement partner, have adopted E-fax. This service targets suppliers that can’t accept a traditional EDI order. Instead, these orders go through the Broadlane E-fax process, which emulates an EDI transaction and provides back-end value, such as three-way match assurance. This has increased EDI transactions from 17 percent to over 75 percent, and has provided the system with immediate benefits, from decreased accounts payable exceptions and contract price verification to higher buyer productivity. This information has also allowed us to manage contract compliance. Utilizing tools such as these has led to credible data, which can be used to manage our business, and a supply-costs metric for fiscal year 2008 performing under budget. JHC: Describe a project you are excited to implement. Pitzer: We continue to move toward our goal of full supply chain automation by 2011. In doing so, we plan to adopt credit card payment, utilization of EDI 810 electronic invoicing, pilot a conversion of non-EDI invoicing to electronic invoicing, and ultimately drive payment through electronic funds transfer. JHC: What is the most important quality you look for in a supplier partner? Pitzer: I look for partners that not only bring the expected products and services, but the unexpected as well - an innovative approach to our business relationship that identifies common efficiencies. . JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Pitzer: I anticipate supply costs rising as raw material costs continue to escalate. This will be an opportunity to promote our green initiatives by [relying on] reusables where appropriate and continuing to adopt the reprocessing of single-use items.
Indeed, her prior experience as director of procurement at the University of Rochester and Strong Memorial Health System, preceded by 10 years at Vanderbilt University as associate director of procurement, prepared her well for her current position. Current responsibilities include:
Jane Pleasants: I have completely redesigned the product recall process for our health system and have developed a best-practice model that is being replicated in many institutions. [My staff and I] have educated and trained over 400 responders. Our success at closing recalls the same day they are initiated has increased [our department’s] visibility among senior leadership, which understands the importance of supply chain to patient safety now more than ever before. Our staff in charge of this program won the Presidential Award for Duke University. JHC: Describe a project you are excited to implement in the near future. Pleasants: We are implementing a cost-reduction initiative, which is expected to reduce annual operating costs by $15 to $20 million using internal resources, cross-functional value analysis teams and physician champions. We use no consultants at this time. In addition, we are constructing a $700 million addition to our main campus hospital, Duke Hospital. We are excited [to move forward with this] project, as we strategically leverage and consolidate our day-to-day capital acquisitions with the equipment and furniture included in the addition. JHC: What is the most important quality you look for in a supplier partner? Pleasants: I value a supplier with the same level of commitment to quality customer service as I expect from my staff and myself. Additionally, I look for a supplier that supports the initiatives and goals outlined for Duke University Health System, even if this means less sales. A true partner can offer opportunities to reduce cost, no matter what its revenue tradeoff may be. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Pleasants: I expect to see more IDNs pushing for suppliers to support data standards, such as GLN and GTIN. In addition, electronic invoicing and contract data synchronization should become increasingly more important. I also think IDNs will [ask for] more commitment and support in the event of recalls. Recalls have at least doubled in the past two years. Not only do they put patients at risk, they take up enormous resources for materials managers and other clinical staff. Finally, I believe we will see more IDNs [engaging in] self-contracting as well.
Current responsibilities include:
Dennis Robb: Over the last three fiscal years, I have achieved an audited savings of $18,649,231. Some of my more challenging projects have included the administration of a quarterly bulk purchase warehouse program, resulting in verified annual savings of $4.7 million. I have also [overseen] system-wide contracting and successfully implemented complex clinical applications, such as a picture archival communications system, smart IV pumps with error reduction technology and reprocessing of single use devices. I also created an economic inclusion program across seven hospitals, taking the organizational competitive spend from $5 million annually to over $72 million over three years. I [have overseen] an increase in the number of certifiable diverse suppliers [we work with], from 19 to 89. And, I successfully negotiated PVC/DEHP-free IV bags, lines and sets, as recommended by the Global Health and Safety Initiative. JHC: Please describe a project you are excited to implement. Robb: I look forward to continuing to engage our physicians in value analysis, particularly in the areas of high spend/high volume procedures with significant physician preference items. Also, I [look forward to] creating a system-wide administrative and clinical consensus, and designing and implementing a vendor management program. Components of this initiative will include vendor credentialing, vendor orientation, controlling vendor access, vendor representative scorecards and regulation of off-contract spend. JHC: What is the most important quality you look for in a supplier partner? Robb: The most important qualities we look for in a partner reflect our core values, which include respect, integrity, teamwork and quantifiable metrics of excellence. Broadlane, our group purchasing organization, best exemplifies these characteristics. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Robb: The intense pressure to deliver value-driven, quantifiable savings in the face of diminishing reimbursement. Driving competitive contracts through transparent performance metrics related to compliance, speed of implementation, and appropriate product orientation, training and vendor/contract management will facilitate this process.
Current responsibilities include:
Mike Switzer: I designed, built and opened a state-of-the-art logistics center, which services the entire system. The logistics center takes full advantage of a new warehouse management system (WMS) that is real-time, wireless, paperless and utilizes wrist computers with laser ring readers for complete hands-free motion, from TECSYS. It has wire guidance in the floor for Raymond 90 degree side loader forklifts and Raymond pickers. The heart of the logistics center is a Johnson Air Rotation system, which helps the facility maintain a year round 69 degrees, filters out all dust and has only a 1½-degree difference from floor to the ceiling. The building is also licensed as a drug wholesale and manufacturing warehouse and has all of the security features necessary for such a rating. The WMS system allows us to track all expiration dates, lot numbers and more. We use plastic pallets to ship to our hospitals, which saves the floors and are easy to power wash clean. The majority of the goods are packed into reusable plastic totes. In addition, we opened a direct shipment operation for home health, which ships over 4,500 packages per month directly to patients’ homes. This model enables us to save money through direct contracting with manufacturers, bulk buys, economic order quantities and decreased shipping costs. JHC: Describe a project you are excited to implement. Switzer: We are going to open a cutting-edge central sterile processing (CSP) and case cart assembly plant, which will be off-site and supply the needs for the entire corporation. The building will be split into three distinct zones: decontamination, prep/pack and sterile zones. The three zones will have airlocks and doors with interlocks so that direct airflow between zones (and possible cross-contamination) will never occur. The floors of each of the three zones will be color coded, as will the scrubs the workers will wear. We will use the latest in automation, and all sterilizing devices will be pass-through units with interlocks. All instruments will be tracked in an instrument tracking software package, which will include electronic record keeping for washer decontaminators and sterilizers. JHC: What is the most important quality you look for in a supplier partner? Switzer: It must be a two-way open dialogue relationship where both parties can learn, adapt and grow. We actually have several, but one that sticks out in my mind is DeRoyal. JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years? Switzer: We will see more professional contracting people on a local level, rather than [IDNs] relying solely on a GPO. We currently contract for 55 percent of the goods we buy locally. I’m not saying that GPOs will go away, but they must adapt. |
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