Chang­ing times calls for evolved sup­ply chain lead­er­ship

Re­spond­ing to to­day’s shifts in the health­care en­vi­ron­ment

Modern Healthcare - - LATE NEWS - David Har­graves Se­nior Vice Pres­i­dent of Sup­ply Chain Ser­vices Pre­mier, Inc.

In to­day’s en­vi­ron­ment, sup­ply chain lead­ers are be­ing pushed to as­sume more re­spon­si­bil­ity for the goals of value-based care by shift­ing pur­chas­ing to­ward the high­est-qual­ity, high­est-value prod­ucts. But to suc­ceed in this en­vi­ron­ment, providers have to be will­ing to aban­don busi­ness as usual and look to new in­no­va­tions, so­lu­tions and re­sources to dis­cover buried in­ef­fi­cien­cies, im­prove work­flow and max­i­mize sav­ings.

What do you see as the ma­jor chal­lenges fac­ing health­care sup­ply chain ex­ec­u­tives?

DH: To­day’s en­vi­ron­ment re­quires lead­ers to take a to­tal cost man­age­ment ap­proach; it’s no longer about a lower price per item, but about man­ag­ing spend to en­sure value. But get­ting to to­tal cost man­age­ment can be dif­fi­cult, as most health sys­tems still deal with mis­aligned in­cen­tives that pit dif­fer­ent providers and dif­fer­ent set­tings against one an­other in the cost con­tain­ment jour­ney, dys­func­tional mar­kets that lack com­pe­ti­tion and con­spire to keep prices ar­ti­fi­cially high, lack of to­tal cost and qual­ity data to make com­par­isons and iden­tify op­por­tu­ni­ties, and a lim­ited abil­ity to test, spread and scale pur­chas­ing in­no­va­tions and best prac­tices.

What are key so­lu­tions sup­ply chain lead­ers need to thrive in era of value-based care?

DH: To suc­ceed in a world where in­creas­ingly value is the new econ­omy and mea­sures are its cur­rency, health sys­tems need to fo­cus on next-gen­er­a­tion op­por­tu­ni­ties for to­tal cost man­age­ment, in­clud­ing:

• Pur­su­ing op­por­tu­ni­ties for greater align­ment, such as bun­dled pay­ments or shared sav­ings ar­range­ments, which in­cent providers to move away from vol­ume in fa­vor of value-based in­cen­tives that move providers to holis­ti­cally man­age cost.

• Bet­ter data and an­a­lyt­ics to reach across the con­tin­uum to mea­sure cost and qual­ity – at the set­ting, ser­vice line or in­di­vid­ual provider lev­els. For in­stance, Pre­mier uses its rich data sets on qual­ity, safety, op­er­a­tions and out­comes for ~40% of U.S. health sys­tem dis­charges to cre­ate cloud­based tools providers can use to pin­point in­ef­fi­cien­cies and op­por­tu­ni­ties, all in real-time.

• Op­por­tu­ni­ties to un­cover and test in­no­va­tions through data-driven col­lab­o­ra­tives that give lead­ers a fo­rum to learn from oth­ers what works to man­age to­tal costs, the spe­cific steps to im­ple­ment change and the pro­cesses that hard­wire suc­cess into busi­ness pro­cesses.

• Au­to­ma­tion so­lu­tions that help lead­ers stan­dard­ize pur­chas­ing func­tions across the care con­tin­uum. ERP so­lu­tions, in par­tic­u­lar, are vi­tal to help or­ga­ni­za­tions man­age their sup­ply chain, fi­nan­cial and work­force man­age­ment prac­tices all in one, con­sol­i­dated place to en­sure com­pli­ance and max­i­mum ef­fi­ciency.

It’s one thing to iden­tify cost op­por­tu­ni­ties, and an­other to make them re­al­ity. How can lead­ers se­cure buy in and man­age change across a hospi­tal, health sys­tem or a clin­i­cally in­te­grated net­work?

DH: For to­tal cost man­age­ment op­por­tu­ni­ties, buy-in from clin­i­cal lead­ers and ex­ec­u­tive cham­pi­ons is cru­cial. Fa­cil­i­tat­ing that dis­cus­sion re­quires a sub­stan­tive busi­ness case us­ing real-world cost and qual­ity data to prove the scope and breadth of the prob­lem, as well as the fi­nan­cial op­por­tu­nity as­so­ci­ated with change.

Can you pro­vide an ex­am­ple of how that cul­tural shift can be achieved?

DH: Pre­mier’s Part­ner­ship for Ad­vance­ment of Com­par­a­tive Ef­fec­tive­ness Re­view (PACER) is a fo­rum for this work, lever­ag­ing data to de­ter­mine value and help­ing providers stan­dard­ize to ven­dors or prod­ucts that pro­vide great­est re­turns. Par­tic­i­pants have driven be­hav­ior change among front­line clin­i­cians on physi­cian pref­er­ence items (PPIs) by en­gag­ing them through the whole de­ci­sion-mak­ing process, giv­ing them in­sight into how sup­ply chain de­ci­sions are made, al­low­ing them to test and pro­vide feed­back on the dif­fer­ent prod­ucts in a clin­i­cal set­ting and see for them­selves how in­ter­ven­tions af­fect out­comes.

Through this work, par­tic­i­pants were able to stan­dard­ize on prod­ucts that yield the best value, and ex­tract bet­ter vol­ume-based dis­counts for the ef­fort. A hand­ful of Pre­mier mem­ber health sys­tems par­tic­i­pat­ing saved more than $8 mil­lion in two years on car­diac stents and sur­gi­cal mesh, prov­ing the value of the work in just a small sub­set of clin­i­cal cat­e­gories.

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