Journal of healthcare contracting Aug 2018 by BOC design Inc

Providing Insight, Understanding and Community

August 2018 | Vol.14 No.4

Ten People

to Watch

Richmond Consolidated Service Centerâ&#x20AC;&#x2122;s Lynn Cook is one of this yearâ&#x20AC;&#x2122;s Ten People to Watch in Healthcare Contracting. See the rest on page 12

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CONTENTS »» AUGUST 2018 The Journal of Healthcare Contracting is published bi-monthly by Share Moving Media 1735 N. Brown Rd. Ste. 140 Lawrenceville, GA 30043-8153 Phone: 770/263-5262 FAX: 770/236-8023 e-mail: info@jhconline.com www.jhconline.com

Editorial Staff

Editor Mark Thill mthill@sharemovingmedia.com Managing Editor Graham Garrison ggarrison@sharemovingmedia.com Art Director Brent Cashman bcashman@sharemovingmedia.com

Ten People to Watch

Publisher John Pritchard jpritchard@sharemovingmedia.com Vice President of Sales Jessica McKeever jmckeever@sharemovingmedia.com Director of Business Development Alicia O’Donnell aodonnell@sharemovingmedia.com Sales Executive Tyler Moss tmoss@sharemovingmedia.com Sales Executive Lizette Anthonijs Lizette@sharemovingmedia.com Circulation Wai Bun Cheung wcheung@sharemovingmedia.com The Journal of Healthcare Contracting (ISSN 1548-4165) is published monthly by Share Moving Media, 1735 N. Brown Rd. Ste. 140, Lawrenceville, GA 30043-8153. Copyright 2018 by Share Moving Media. All rights reserved. Subscriptions: $48 per year. If you would like to subscribe or notify us of address changes, please contact us at the above numbers or address. POSTMASTER: Send address changes to Share Moving Media, 1735 N. Brown Rd. Ste. 140, Lawrenceville, GA 30043-8153. Please note: The acceptance of advertising or products mentioned by contributing authors does not constitute endorsement by the publisher. Publisher cannot accept responsibility for the correctness of an opinion expressed by contributing authors.

Publisher’s Letter

6 Cybersecurity and the Contracting Pro Price, terms, service, warranties and fill rates have long been the stuff of contract negotiations. Now, contracting professionals are adding “cybersecurity” to the list.

12 Ten People to Watch in Healthcare Contracting 41 Portfolio for Vizient committed program growing 42 Hospital-acquired conditions are down

The Journal of Healthcare Contracting | August 2018

44 Weather Your Next Emergency Lessons learned from Hurricane Harvey

48 Long-Distance Learner

Dennis Robb is smarter, wiser and 4,000 miles away from Cincinnati

50 HSCA GPOs on the Front Lines

52 Calendar of Events 53 Observation Deck: Ten People to Listen To

PUBLISHER’S LETTER

John Pritchard

The New Normal The last decade has been so crazy, I have wondered what normal would feel like. Maybe it’s 2018. Just think of all we have digested in that last dozen or so years; the Great Recession, the passing and implementation of the Affordable Care Act, and an era of unprecedented consolidation. While any one of these events would have sent shockwaves through the best-run IDNs in the past, the compilation and continued onslaught has become almost routine. Now we deal with concerns of tariffs, trade wars, product shortages, and uncertainty of the coverage the Affordable Care Act facilitated. Yet for some strange reason things feel more stable than they have in a long time. The Supply Chain Leaders I talk to are making progress on some of the big areas they have wanted to focus on for a while. Real progress is being made on understanding, organizing and contracting for Purchased Services. This is an area that even the best Supply Chain Leaders know there is room for improvement, but it takes expertise and focus. Look for more articles in The Journal of Healthcare Contracting about Purchased Services and please contact me if you have a story to share. Alternate site supply has also improved greatly. It wasn’t long ago that a major IDN’s Supply Chain Leader told me he used to let his ambulatory site distributor handle those facilities. Today, the same guy has a Director focused solely on the formulary and contracts for the alternate sight facilities. This spend is no longer an afterthought. The other trend I see happening is the focus on professional development of Supply Chain departments. There is more talk of training, career laddering and professional development. This bodes very well for the U.S. Healthcare Supply Chain, because the better equipped our next generation of leaders are, the better suited they will be to help their IDNs navigate this crazy market. I hope you are enjoying your summer and thanks for reading this issue of The Journal of Healthcare Contracting!

August 2018 | The Journal of Healthcare Contracting

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CYBERSECURITY

Cybersecurity

and the Contracting Pro

Price, terms, service, warranties and fill rates have long been the stuff of contract negotiations. Now, contracting professionals are adding “cybersecurity” to the list.

“Cybersecurity concerns have heightened the importance of evaluating medical device vendors and service providers on their current and future cybersecurity management practices across the expected life of devices,” says Kent Petty, chief information officer, HealthTrust. “The avoidance of unexpected downtime, loss of functionality, or worse, harm to patients because of a cybersecurity event, makes the evaluation and negotiation of cybersecurity terms in purchasing agreements a top-of-mind focus.”

August 2018 | The Journal of Healthcare Contracting

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CYBERSECURITY

“Unpatched devices with off-the-shelf software are more vulnerable when a large virus outbreak occurs.” – Ross Carevic

Ross Carevic, director, technology sourcing operations for Vizient Inc., says, “A recent report from Symantec indicates some threat actors appear to be fine-tuning their attack tactics to more specifically target medical devices. While the exact intent is still unknown, it shows the changing tactics of threat actors and their willingness to probe deeper into medical systems to look for potential vulnerabilities.”

What’s the problem? It turns out that the strength of modern medical devices is also their weakness. “The interconnected medical device is critical in today’s diagnostic and patient treatment ecosystem, as it brings automation, accuracy and improved outcomes for patients and providers,” says Petty. “Unfortunately, many of these devices lack the basic security protections

we have grown to expect from other systems connected to the hospital network. This puts interconnected medical devices increasingly at risk of cyberattacks that could affect patient care, safety, or data. “Additionally, these devices can be used as easy targets to gain a foothold into the hospital’s network to attack other non-medical systems,” he continues. “While these indirect attacks may not directly harm a patient, the disruption to operations could affect the speed, accuracy, and overall delivery of patient care.” Examples of common cybersecurityrelated risks include lack of support and/or

August 2018 | The Journal of Healthcare Contracting

timely release of security patches, the continued selling or use of unsupported operating systems (e.g., Microsoft Windows XP), and the overall lack of basic security controls within the device, including open services and ports that can be easily exploited by cyberattacks, says Petty. Historically, the U.S. Food and Drug Administration has been charged with providing reasonable assurance that the benefits of a medical device or technology to patients outweigh the risks, he says. With today’s networked devices, that’s not so easy. “A medical device’s network connectivity and other cybersecurity risks adds to the device’s risk profile and complexity, and the responsibility falls to the manufacturers and providers to work together to remediate or mitigate these risks.” Given the number of medical devices that are networked and/or contain patient data, and the potential impact on patient health and safety, cybersecurity poses a big risk to providers, says Carevic. Common risks include default login credentials and unencrypted data storage and transfers, he says. The greater risks involve the failure to understand the medical device profile information, or the failure to identify the systems with which devices exchange information. Another risk is the failure to compile detailed device profile information of the deployed devices in advance of the next major cybersecurity exploit.

that the devices often utilize,” says Carevic. “As an example, the WannaCry virus quickly spread across unpatched Microsoft XP operating systems. This attack highlights a big debate in the industry about the frequency of regular software patches for medical devices.” Patching a medical device always carries some degree of risk because of its unintended impacts to device functionality, he says. “However, unpatched devices with off-the-shelf software are more vulnerable when a large virus outbreak occurs, so there needs to be a balance where patches can be tested and released on a defined schedule.”

Contracting implications Healthcare providers can reduce their risks of cyberattack through attentive and informed contracting, according to those with whom the Journal of Healthcare Contracting spoke. But they’ll need help doing so.

“ The avoidance of unexpected downtime, loss of functionality, or worse, harm to patients because of a cybersecurity event, makes the evaluation and negotiation of cybersecurity terms in purchasing agreements a top-of-mind focus.”

Patches “To date, medical devices haven’t been specifically attacked that we are aware of, but they have been impacted indirectly by exploits targeting the off-the-shelf software

The Journal of Healthcare Contracting | August 2018

– Kent Petty

“Contract negotiators, along with IT and security teams, need to coordinate their efforts during the contract review and negotiation process to better identify the supportability and longevity of the underlying operating system and third party applications that are necessary for these devices to function,” says Petty. “During the sourcing and procurement process, they need to identify those medical devices that may run unsupported or with end-of-life operating systems, such as Windows XP. Doing so will call for collaboration with vendors, clinicians, IT and cybersecurity representatives.”

Manufacturers’ role Manufacturers can play a role in minimizing cyberattacks, says Carevic. “Suppliers can immediately help healthcare providers by acknowledging

CYBERSECURITY

the issues and providing more information about their device designs and the proper controls that should be put in place when deploying and using their products in a safe and secure manner. Vizient is taking steps to request this type of information in new contracts and RFPs going forward, but a lot of this information can be made available from suppliers today.” Manufacturers themselves are prepared to work with providers. “Concerns about cybersecurity are nothing new in the medical industry,” says Chad Darling, senior product manager, EMR business development, Midmark. “Our customers primarily use various Security Risk Assessment questionnaires to understand the impact of software to their organization. With cybersecurity being an increasingly prominent topic in the industry, we’re seeing those questionnaires becoming longer and more detailed. And, more organizations are using them than what we’ve seen in the past. “Using a Security Risk Assessment questionnaire early in the contracting process has been helpful for organizations to understand how the software functions and where patient health information is stored and transferred. This can help identify potential security concerns early on in a partnership and lead to discussions on mitigating associated risks well before they become an issue.”

Says Garrison Gomez, senior director of vitals and cardiology, Welch Allyn, “IT has a more prominent seat at the table than ever before – and for good reason: No one wants to make front-page news with a data breach. They are engaging with vendors earlier and more often to make sure the technology selected aligns with their security policies. Of course, this means the CIO must partner closely with the CNO, informatics and other medical teams to make sure clinical needs and workflows remain prioritized. “At a minimum, [contracting professionals should] ask vendors about their methods for encryption, device access control and cybersecurity patch release policies. Understanding the opportunities and options for solutions that are both secure and offer high clinical usability should be an important aspect of the technology evaluation process for connected medical devices.”

Cybersecurity checklist Providers and manufacturers can work together to address current and future cybersecurity-related issues for the life of the device, says Kent Petty, chief information officer, HealthTrust. Some points for contracting professionals to consider: •R equire the vendor to disclose and discuss securityrelated features or vulnerabilities associated with the product or service the vendor seeks to sell into the healthcare system.

• Ensure contract language requires manufacturers to maintain the cybersecurity of the device (e.g., timely patching, supported operating system version, etc.) over its expected lifespan.

•C learly define roles and responsibilities for addressing cybersecurity risks identified during the system’s lifespan within the contract.

• When evaluating new products and/or vendors, include cybersecurity requirements in the scorecard to ensure they are a part of the purchase decision.

• Clearly define a set of cybersecurity requirements within the contract that must be met before the device or technology is introduced in the facility, and independently validate that the vendor has met the requirements.

• Encourage participation in vulnerability-sharing organizations (e.g., National Health Information Sharing and Analysis Center, or NH-ISAC) to bring added visibility and crowdsourcing to cybersecurity issues in a timely manner.

August 2018 | The Journal of Healthcare Contracting

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Ten People to Watch in Healthcare Contracting Editor’s note: Thanks to all those who made the effort to nominate this year’s “Ten People.” And thanks to the Ten, who share their insights and experience with Journal of Healthcare Contracting readers this month. They are: • Lynn Cook, Richmond Consolidated Service Center • Mark French, Ochsner Health System • Carl Gustafson, Marshfield Clinic Health System • Christopher Johnson, Wellforce • Jonathan Kepley, Wake Forest Baptist Medical Center

• Jennifer McPherren, Northwestern Memorial HealthCare • Dennis Mullins, Indiana University Health • Steve Pohlman, Cleveland Clinic • Kate Polczynski, Geisinger • Lisa Thakur, Scripps Health

August 2018 | The Journal of Healthcare Contracting

LYNN COOK CEO Richmond Consolidated Service Center HealthTrust Supply Chain Richmond, Virginia A native of “Wild, Wonderful West Virginia,” Lynn Cook graduated from the medical technology program at West Liberty State College, and became a staff medical technologist at Wheeling Hospital. She also served as a medical technologist with a major reference laboratory before becoming director of clinical laboratory services for a consolidated laboratory serving multiple HCA Healthcare hospitals in Richmond, Virginia. In 1999, HCA made a commitment to consolidate revenue cycle, supply chain and other back-office functions. Given her working relationship with the revenue cycle team, Cook was asked to serve as project director for the revenue cycle project in Richmond. She became chief operating officer of the revenue cycle services team, then vice president of transitional operations, working with client facilities on revenue cycle. In May 2016, she was named CEO for HealthTrust Supply Chain for HCA Healthcare’s Capital Division. She and her husband, Paul, live in Richmond. They have three children.

About the Richmond Consolidated Service Center The Richmond Consolidated Service Center is one of 14 fieldbased supply chain operations that support primarily HCA operations and in some cases, non-HCA facilities. The CSC provides support in supply and pharmacy distribution and logistics, purchasing and accounts payable transactions, clinical value analysis, contracting, clinical pharmacy and central order entry pharmacy administration and support service coordination to 14 acute care facilities and one behavioral health facility in Virginia, Kentucky, New Hampshire and Indiana. The CSC provides transaction services, purchasing and accounts payable activities as well as financial reporting support for HCA facilities in four other divisions in Florida, Georgia and South Carolina. It also provides business continuity support along with sister centers in Dallas, Texas, and Nashville, Tennessee, in the event of weather or other situations necessitating backup support.

“ I hope that I’ve made improvements by employing a stronger focus on empathy and compassion.”

Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding supply-chain-related project in which you have been involved in the past 12-18 months? Lynn Cook: That would be the comprehensive, collaborative and integrated response HealthTrust developed in response to drug, fluid and general supply shortages caused by catastrophic weather events in Puerto Rico, Texas and Florida last year. Distribution, supply chain, facility operations, pharmacy, procurement, clinical resources, chief medical officers, nursing staff and physicians all contributed to ensure the continuity of care.

The Journal of Healthcare Contracting | August 2018

TEN PEOPLE TO WATCH IN HEALTHCARE CONTRACTING

Their efforts included monitoring of product supply levels, identifying substitutes, and creating new protocols. Daily inventory and communication protocols were established, allocation approval hierarchies were implemented, and swift physician and nursing education and adaptation plans contributed to the success. Some of the changes have been adopted as new standards of care and will support improved drug administration management. JHC: Please describe a project you look forward to working on in the next year. Cook: I am excited about the opportunities HealthTrust Supply Chain has to collaborate with our clinical and administrative teams in the support services areas, such as food and nutrition, linen, valet, environmental services, waste management, asset management, etc. Our supply chain organization is poised to assist and provide expertise to our hospitals, from analysis of best practices, to contracting, performance monitoring and patient satisfaction monitoring. Expansion into these areas can facilitate identification of options, provide standardization where applicable, and leverage economies of scale. I continue to be excited about the increasing integration of Supply Chain and clinical services. We are fortunate to have many clinicians on our team, including nurses, pharmacists, and surgical services specialists. These experts collaborate with vendors as well as the procurement, contracting and logistics teams to identify solutions and opportunities to our clinical teams. Additionally, they work side by side with the nurses, physicians, chief medical officers and facility finance officers to bring products of the highest quality to caregivers and ultimately, the patients we all serve.

wisdom, candor and patience. Hopefully I’ve woven lessons from them into my daily work. I also hope that I’ve made improvements by employing a stronger focus on empathy and compassion. Healthcare touches all of us. Navigating the system can be intimidating, particularly for those with little or no exposure to a facility and those who are in physical or emotional pain. Demonstrating sensitivity and awareness hopefully lessens the stress for our patients and their families. I also believe that advances in our ability to analyze and interpret financial and quality data improve the delivery of healthcare. Fostering a commitment to data integrity and to improving the analytical and interpretative skills of our clinical and non-clinical teams provides the foundation for supply chain to be a strategic asset to providers and generates opportunities for all healthcare professionals.

“I continue to be excited about the increasing integration of Supply Chain and clinical services.”

JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Cook: I think our challenges fall into three main categories: 1) talent recruitment, 2) increased cost associated with medical device innovation and advancing individualized pharmaceutical therapies, and 3) continued potential supply chain disruption due to weather, regulation, etc. These same challenges should also be considered opportunities to secure and develop the best talent, provide better patient care and mitigate supply chain disruptions. Proactive steps that we can take include 1) enhancing our development programs, 2) maximizing commodity standardization opportunities to allow funding for advancing devices and pharmaceuticals, and 3) continued clinical integration to identify alternatives and manage disruptions. These steps are stated broadly and will require robust, detailed work, but that work will set a strong foundation for the future.

August 2018 | The Journal of Healthcare Contracting

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TEN PEOPLE TO WATCH IN HEALTHCARE CONTRACTING

MARK FRENCH Vice president, Vendor Management and Purchased Services Ochsner Health System New Orleans, Louisiana

Born in Hawaii, Mark French moved to Northern California with his family when he was 15. He received a bachelor’s degree in exercise physiology from the University of California Davis. While there, he worked in a trauma unit, a physical therapy clinic and an Alzheimer’s care facility (for which he ultimately assumed an administrator role). He received a master’s degree in health administration from Tulane University in New Orleans, Louisiana. After completing a fellowship and an additional year working in finance at Henry Ford Health System in Detroit, Michigan, he returned to New Orleans and joined the Ochsner

1,200 physicians in more than 90 medical specialties and subspecialties, Ochsner is Louisiana’s largest health system. Each year, more than 273 medical residents and fellows work in 27 different Ochsner-sponsored ACGME accredited residency training programs. Ochsner also hosts more than 550 medical students, 150 advanced practice providers, 1,200 nursing students and 575 allied health students. Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding supply-chain-related project in which you have been involved in the past 12-18 months? Mark French: There have been two, one being the replacement of our elevator service and maintenance provider, and the second being the replacement of our courier provider. We have approximately 160 cars or elevators throughout our organization. You learn very quickly that they can be the lifeline of any facility. When they are not operating correctly, it’s an extremely challenging situation. We put our vendor on a performance improvement plan, but ultimately had to sever ties. Transitioning to

“ Dealing with purchased services is challenging. You’re dealing with human beings, not widgets.” Health System in 2000. He began his career at Ochsner as the operations manager in the Department of Renal Services and has served in a variety of leadership roles, including the COO of Ochsner Medical Center – New Orleans. French lives in New Orleans. He is the father of three daughters, ages 15, 13 and 10.

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August 2018 | The Journal of Healthcare Contracting

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TEN PEOPLE TO WATCH IN HEALTHCARE CONTRACTING

a new service provider is never easy, but we are in a good place now. Service has improved tremendously, and confidence is slowly being restored. We had a similar situation with our courier provider. We brought in a new provider in January, but quickly found they were not up to the task. When something like this happens, it’s a matter of looking at yourself in the mirror, realizing that you’ve made a mistake, taking ownership of that, reassuring the organization that you’ll fix it, and then getting it right – not to mention all the day-to-day firefighting and troubleshooting. We did bring in another provider, and things are now working smoothly. Dealing with purchased services is challenging. You’re dealing with human beings, not widgets. The organization can have wonderful policies and operating protocols in

“ With disruptions such as these, our challenge to remain current and immediately relevant to our community and patients is real.” place for each service, but each service provider must execute – and that often comes down to the individuals who are responsible for the delivery of the associated service. It’s never-ending work. Just when you think everything is progressing smoothly, there will be a new challenge to address. You’re excited one moment, and the next you’re asking, “Why isn’t this working?” JHC: Please describe a project you look forward to working on in the next year. French: We’re living in a world of disruption. A great example is the merger of Aetna and CVS. That could change the healthcare landscape. Given the new entity’s financial resources, the collective knowledge and understanding of customer service, and the fact that neither is embedded in

the industry as a traditional healthcare provider, it could become a new competitive force that will challenge traditional approaches and paradigms. With disruptions such as these, our challenge to remain current and immediately relevant to our community and patients is real. JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant? French: You’re talking to a much humbler person than I was five or 10 years ago. I realize today there’s so much I don’t know. I learned as a COO that being able to manage stress and maintain a healthy work/life balance is a real thing. The challenge is in realizing you may not be able to handle all on your plate the way you traditionally might have. You must prioritize, put life in perspective and understand what’s important. JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? French: They will require the willingness to change on a dime; the willingness to fail and not hang onto something too long; and the ability – and I believe this is an ability – to work effectively with other people. This is a team sport. If you can’t work within a team construct, or if you don’t believe that every member of the team is valuable, you’re going to struggle. Also, you can’t hang onto something just because you invented it. The environment is constantly changing; if we can’t change, then in all likelihood we can’t be successful. I think humility is another factor for success. It’s a willingness to say, “I don’t know, but I will find out.” We have a fellowship program within Ochsner; I am a preceptor of a supply chain professional. My constant mantra is, “Be humble, work well with others, be ready and willing to change, and find work/life balance.” Hopefully you run across mentors who will challenge you and call you out when you’re not being humble.

August 2018 | The Journal of Healthcare Contracting

CARL GUSTAFSON Vice president supply chain Marshfield Clinic Health System Marshfield, Wisconsin

Born and raised in Woodstock, Illinois, Carl Gustafson served in the United States Army from 1988 to 1992. After his discharge, he began working in the chemical industry, formulating paints and coatings. In 1999 he entered the healthcare industry, working for a subsidiary of Monsanto. In 2001 he transitioned to acute operations, supporting pharmacy contracting and logistics. After a few years, he moved into surgical services as the business manager. Three years later he began supporting all of supply chain. Gustafson considers his experience in pharmacy and surgery as invaluable, having lived the daily operations of those areas. He has opened two brand new hospitals and enjoys building the supply chain in a new facility. He joined Marshfield Clinic Health System in October 2016. He lives in Marshfield, Wisconsin, with his wife, Catherine, and two daughters, Paige and Olivia.

About Marshfield Clinic Health System Marshfield Clinic Health System is the largest private group medical practice in Wisconsin and one of the largest in the United States, with more than 1,200 medical providers representing more than 86 specialties and subspecialties. The system has more than 50 locations in 34 communities in northern, central and western Wisconsin, including hospitals in Marshfield, Eau Claire, Flambeau and Rice Lake. The clinic is advancing its acute care growth and deepening its level of integration as a system.

“ Being a leader is a blessing, as we have the opportunity to help others develop.”

JHC: Can you describe the most challenging and/or rewarding supply-chainrelated project in which you have been involved in the past 12 to 18 months? Carl Gustafson: The planning and tactical implementation of a multitude of projects, new acquisitions and changes. The growth and development of our acute care strategy and system integration has made supply chain adapt quickly and be nimble. A sample of large projects completed over the last 18 months are: • Implementation of a contract management philosophy, building new alliances with our vendor community, and developing contracts that support clinical excellence while reducing costs by 5 percent. •P erforming a chart of accounts conversion with Finance for several facilities within the health system. • Acquisition of a 504-bed Level II trauma center. •C onversion of our med/surg distributor. •G PO analysis and conversion to Vizient.

The Journal of Healthcare Contracting | August 2018

TEN PEOPLE TO WATCH IN HEALTHCARE CONTRACTING

• Support of provider-based billing, including conversion of 110,000 bins of medical supplies from cardboard to plastic. • Support for a new hospital, scheduled to open in the summer of 2018, as well as planning for four additional new hospitals to be completed in the next four to five years. • Item master cleanse. • Implementation of a new EMR. JHC: Please describe a project you look forward to working on in the next year. Gustafson: Over the next year we are focusing on redesigning our distribution and logistics strategy to align with

has changed who I am and how I support others. [Greenleaf was the founder of the modern Servant Leadership movement.] Being a leader is a blessing, as we have the opportunity to help others develop. This mindset has allowed me to build a solid team of professionals and significant business partnerships with vendors. Instilling a sense of urgency and great desire to perform at a very high level ensures we are taking care of the clinicians who take care of patients. Many people along my career have significantly inspired me. While I was completing my bachelor’s degree, one of my professors encouraged me to enter into formal mentorships. I searched for leaders who exhibited strong values that matched what I was striving to improve. To date, I have had six yearlong formal mentorships, and I am extremely grateful to those who have given of their time to me.

“ Most of the time, supply chain goes unnoticed; everything we do happens as if by magic. Changing that perception is important.” an agile, efficient and lean system. Over the course of a three-year period, Marshfield Clinic Health System will go from one hospital to seven, with potentially more opportunities on the horizon. Due to our continued growth, we will be pushing the current limits of our existing operation, which includes a 100,000-square-foot consolidated service center. We have to instill a solid foundation to support our continued evolution as a health system and will apply a continuous improvement mindset to reach the next level. This will be accomplished through education, technology improvements, organization, critical thinking and solid alliances with our vendor community. JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant? Gustafson: Over the past 10 years, I have focused on Servant Leadership and having the desire to want to serve those around me. Employing Robert Greenleaf ’s leadership style

JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Gustafson: The perception of supply chain is slowly evolving, and it is up to us as leaders to effectively communicate the strategic value it brings to the organization. Most of the time, supply chain goes unnoticed; everything we do happens as if by magic. Changing that perception is important, because we are entangled in a very complex role in a very complex industry. Supply chain professionals just entering the healthcare field need to understand the level of complexity we face, managing the “Bermuda quadrangle” of the distributor, GPO, manufacturer and facility. It is critical to embrace a continuous improvement mindset to solve the complex problems we face. New leaders will be challenged by a shortage of supply chain professionals, as other industries can pay higher wages to new graduates. To remedy this, it is important to develop educational goals and professional development for your teams using the Association for Healthcare Resource & Materials Management (AHRMM), APICS, Elsevier and other organizations for content. There are many creative ways to get quality educational material to your teams.

August 2018 | The Journal of Healthcare Contracting

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Start today at www.welchallyn.com. 1 CIN: Computers, Informatics, Nursing: Eliminating Errors in Vital Signs Documentation, FIELER, VICKIE K. PhD, RN, AOCN; JAGLOWSKI, THOMAS BSN, RN; RICHARDS, KAREN DNP, RN, NE-BC, 2013. The paper vital signs recording had an error rate of 18.75%. 2 JHIM FALL 2010 Volume 24:Number 4, Vital Time Savings: Evaluating the Use of an Automated Vital Signs Documentation System on a Medical/Surgical Unit 3 Going One Step Further at Scott & White Medical Center—Temple: Eliminating manual vital signs documentation to prioritize value-added care. 2017 Welch Allyn. www.welchallyn.com 4 CareAware® VitalsLink: Eliminating Data Latency & Manual Documentation at Naples Hospital. Prepared by Cerner, 2013. © 2017 Welch Allyn

MC14605

TEN PEOPLE TO WATCH IN HEALTHCARE CONTRACTING

CHRISTOPHER JOHNSON Senior Vice President of Supply Chain Wellforce Burlington, Massachusetts

“ Adapt or die! It’s harsh, but it’s the reality of being a supply chain leader in healthcare.”

of the Association for Healthcare Resource & Materials Management (AHRMM). He and his wife, Julie, live in Upton, Mass., with their two children. Wellforce is a health system in eastern Massachusetts comprised of Tufts Medical Center, Circle Health, and MelroseWakefield Healthcare, as well as physician organizations. Wellforce, with four community hospital campuses, an academic medical center, a children’s hospital and nearly 3,000 physicians, brings together the strengths of academic medicine and community care. The Wellforce system reaches from Cape Cod to the New Hampshire border.

than 60 hospitals in various roles – value analysis, strategic contracting, analytics, streamlining dock to point-of-use for supplies, evaluating impact of add-on and cancelled cases to the supply chain, and implementing cost reduction programs focused around utilization review studies. He is currently the president of the New England Society for Healthcare Materials Management (NESHMM), a chapter

Christopher Johnson has 20-plus years of healthcare supply chain experience working for the United States Army, Children’s Hospital Boston, Yankee Alliance, Owens & Minor, Tufts Medical Center, and now Wellforce. Born and raised in Maine, he joined the United States Army in 1996, and served as medical supply and logistics specialist. Over the course of his career, he has worked with more

August 2018 | The Journal of Healthcare Contracting

Organization Structure for Wellforce is the most rewarding and challenging project to date in my supply chain career. It’s exciting to take what I have learned over the past 22 years, pick the brains of my seasoned and knowledgeable supply chain leaders, and collaborate with Wellforce senior leaders on this future state. We have an opportunity to implement best practices, address needed changes, factor in the changing healthcare landscape (not only acquisitions and mergers, but natural disasters, such as the Puerto Rico situation), and build out a world-class supply chain team and structure. JHC: Please describe a project you look forward to working on in the next year. Johnson: Developing and finalizing our Wellforce contracting philosophy. Where applicable, our goal is to have service-level agreements in place that are governed by metrics and share the risks with our manufacturing partners. We are taking a methodical approach on what our future state looks like and how supply chain will be able to support these contracts through analytics and business intelligence. This is certainly not new to the industry, and we’ve been working with several of our major business partners over the past year to develop contracts that are in the best interest of both the vendor and Wellforce.

looks like. I’ve had a great deal of help along the way and have been fortunate to work with some incredible leaders. Co-workers, peers and friends have pushed me along the way. My parents have always been wonderful role models, and my wife, Julie, has been a rock throughout the past 20 years. She is the glue that keeps everything together at home and has supported my long hours and travel to allow me to pursue my career. JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Johnson: Supply chain leaders will need to work more closely with IT to tighten up practices and processes associated with

“ Developing and defining the IT security risk a vendor poses through scorecards and dashboards is well underway, and will continue to evolve.”

JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant? Johnson: Adapt or die! It’s harsh, but it’s the reality of being a supply chain leader in healthcare. I’ve worked in the Boston healthcare market for most of my career, and throughout the last 10 years, I have taken advantage of networking opportunities. You quickly learn that the challenges you are facing are the same ones your peers are facing, so you don’t have to re-invent the wheel. I’ve also learned that projects can’t be done in a vacuum. If you lean on subject matter experts, find out what is working and what’s not working, and level set on goals and expected outcomes, you’ll be amazed what the end result

The Journal of Healthcare Contracting | August 2018

the evaluation of new products, technology and equipment. Developing and defining the IT security risk a vendor poses through scorecards and dashboards is well underway, and will continue to evolve and drive us to change our value analysis approach. In addition, tomorrow’s professionals will need to understand supply chain outside of the hospital. The constant pressure to reduce length of stay and the technology that is ready to support homecare will force us to think and act differently. Educate yourself on how supply chain works for a surgery center, skilled nursing facility, home health, hospice and the doctor’s office. Supplies and equipment will always be needed, but our traditional approach of stocking, managing and accounting for supplies in clinical areas will shift to delivering and managing those supplies across the continuum of care and into patients’ homes.

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JONATHAN KEPLEY Director of Strategic Sourcing Wake Forest Baptist Medical Center Winston-Salem, North Carolina

Born and raised in Lexington, North Carolina, about 20 miles south of Winston-Salem, Jonathan Kepley joined Wake Forest in 1995 in the general storeroom. He was promoted to coordinator of the receiving

About Wake Forest Baptist Medical Center

“ The next generation is obviously a lot more techsavvy than we were, but they may need some help with their interpersonal skills.” dock, then buyer and purchasing agent, contract administrator and contract administration manager. He assumed his current role – director of strategic sourcing – in 2015, and is responsible for contract administration, purchasing, value analysis and the

health system’s materials management information systems group. His experiences have given him a broad perspective of supply chain, from the point at which supplies are requested all the way through invoice payment.

Wake Forest Baptist Medical Center is an academic medical center in Winston-Salem, North Carolina, with an integrated health care network that serves the residents of 24 counties in northwest North Carolina and southwest Virginia. The Medical Center’s primary divisions are Wake Forest Baptist Health, a regional clinical system that includes Brenner Children’s Hospital, three community hospitals, more than 230 other primary and specialty care locations, approximately 2,000 physicians and 1,184 acute care beds; and Wake Forest School of Medicine.

August 2018 | The Journal of Healthcare Contracting

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“The next generation is obviously a lot more tech-savvy than we were, but they may need some help with their interpersonal skills.”

Journal of Healthcare Contracting: What is the most challenging and/or rewarding supply-chain-related project in which you have been involved in the past 12-18 months? Jonathan Kepley: Over the last 18 months, I led a medical/surgical products distribution vendor conversion from a 20+-year incumbent, and a GPO conversion from a 10+-year incumbent, and integrated two regional medical centers into the Wake Forest Baptist network. In addition, I served as lead for a project to remove $30 million of non-labor expenses from the health system. To reach that goal, we examined all costs associated with supplies, equipment, service contracts, purchased services and implants (especially spinal, orthopedic and cardiac rhythm management). Over the years, I’ve developed close working relationships with the chairs of our clinical service lines, so they were very engaged throughout the process. It should be noted we weren’t asking our surgeons to change vendors, but rather, to leverage those vendors we already had. We also evaluated our revenue cycle, human resources and IT agreements. We worked with all departments, including some we traditionally have not worked with. As a result, we have developed working relationships throughout the system, and have opened many doors. JHC: Please describe a project on which you look forward to working in the next year. Kepley: We are preparing to acquire another hospital

and physician practice group this fall. When that acquisition is completed, we will have examined its entire contract portfolio, changed their GPOs, med./surg distributor, pharmaceutical distributor and their ERP system. JHC: In what way(s) have you improved the way you approach your job or profession in the last five to 10 years? Kepley: Technology plays a much bigger role in our purchasing decisions than it did even five years ago. Data companies and GPOs can gather and analyze all kinds of information, including price and utilization benchmarks. Having that information at our fingertips makes such a difference when negotiating contracts or making operational decisions. JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Kepley: The next generation is obviously a lot more techsavvy than we were, but they may need some help with their interpersonal skills. They communicate very well digitally, but at some point, they will have to master face-to-face conversations with executives and physicians. They’ll also have to give lots of presentations to work groups and committees. But that aside, I find their ability to analyze data and look at projects from a new and different perspective to be very positive.

August 2018 | The Journal of Healthcare Contracting

JENNIFER MCPHERREN Vice President, Procurement Services, Supply Chain Management Northwestern Memorial HealthCare Chicago, Illinois

Since joining Northwestern Memorial HealthCare more than 15 years ago, Jennifer McPherren’s role has encompassed support services operations, outsourced contract labor management and corporate supply chain. As vice president of procurement services, she has oversight of the $2B procurement arm of Northwestern Medicine’s supply chain, including strategic sourcing, value analysis, performance analytics, contract management, medical capital procurement and clinical engineering. McPherren was born in Rock Springs, Wyoming, and raised in Yreka, California.

About Northwestern Memorial HealthCare Northwestern Memorial HealthCare is the corporate parent for the Northwestern Medicine health system, whose medical staff of more than 4,000 includes more than 1,000 residents and fellows and over 1,500 employed physicians who are part

of the Northwestern Medical Group, Northwestern Medicine Regional Medical Group, Kishwaukee Medical Group or Marianjoy Medical Group. The health system serves patients at over 100 diagnostic and ambulatory sites across the greater Chicago market, including seven hospitals.

“Healthcare supply chain management is an emerging profession. It has progressed from a backoffice support function to an integral component of the healthcare continuum.”

The Journal of Healthcare Contracting | August 2018

Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding supply-chain-related project in which you have been involved in the past 12-18 months? Jennifer McPherren: Northwestern Medicine (NM) is on a growth trajectory, rapidly expanding the number of hospital affiliates in our healthcare system. A natural byproduct of such mergers is the change management activity tied to assessing legacy structures. NM’s supply chain mission is to advance a comprehensive clinical and business integration procurement platform that balances academic medical center needs yet promotes decision-making inclusive of all affiliate entities. For the past year our supply chain team has been on a journey to completely overhaul the way our diverse constituents consider and select products for patients. We’ve launched a collaborative program designed by physicians for

TEN PEOPLE TO WATCH IN HEALTHCARE CONTRACTING

physicians, which empowers clinicians to make decisions on behalf of their peers across all 10 affiliates in a relativity rapid fashion. While all the correlating metrics of the new program are promising (product standardization up 200 percent, new products approved down 30 percent, decision participants consolidated by 85 percent), the most rewarding change has been the evolution in partnership between the clinicians and the supply chain team. JHC: Please describe a project you look forward to working on in the next 12 months. McPherren: NM is in the early stages of deploying a new medical equipment management program. In collaboration with our CFOs, supply chain has been charged with executing

sites. It will inform deployment decisions as to when and where we should be investing our limited funds to carry out our organization’s mission. JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant? McPherren: Healthcare supply chain management is an emerging profession. It has progressed from a backoffice support function to an integral component of the healthcare continuum. As managers of the second largest expense category following human capital, supply chain executives who can swiftly effect change will continue to be a strategic force in improving the delivery of cost-effective care. NM’s supply chain approach to managing to the ever-changing needs of the business is to hire and retain exceptional talent. The foundation of our program is built on sourcing clinicians versed in products, engineering analysts skilled at uncovering compelling business cases through data, attorney negotiators trained in advocacy, and a management team that can compel decision-making.

“ We’ll always be in the change management business. Likable professionals who can influence laterally, persuade a broad range of constituents and drive consensus quickly will always be in high demand.” a five-year capital procurement strategy that takes advantage of economies-of-scale pricing, deploys modality standardization, transitions to a “right-size service selection” platform, and consolidates clinical engineering across the NM continuum. With over 60,000 assets spread across 150 locations featuring 142 different modalities from over 200 distinct suppliers, supply chain is excited to partner with our clinicians on this capital management asset opportunity. A central repository housing NM’s fleet information will afford our clinicians proactive visibility across multiple

JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? McPherren: Technical skills such as artificial intelligence, data mining, dynamic programming and lean principles will be in high demand. The next generation will likely have the luxury of seamless purchase and charge data integration, predictive preference card management and instant product utilization change alerts. However, from my perspective, we’ll always be in the change management business. Likable professionals who can influence laterally, persuade a broad range of constituents and drive consensus quickly will always be in high demand.

August 2018 | The Journal of Healthcare Contracting

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DENNIS MULLINS Senior Vice President, Supply Chain Indiana University Health Indianapolis, Indiana

Dennis Mullins was born and raised in The Bronx, New York. He holds an MBA from Amberton University and is a candidate for a doctorate in business administration from Grand Canyon University. He served in the United States Air Force for 10 years as a medical materials specialist.

“ One of our biggest opportunities is moving into the non-acute space. We have 460 or so nonacute locations around the state.” Mullins joined Indiana University Health as senior vice president, supply chain operations in May 2015. (Two years later, the IDN opened a new Integrated Service Center designed to support supply chain needs for its 16-hospital system.) Prior to IU Health, he served as corporate director of supply chain integration at Baylor

Scott and White Health in Dallas, Texas. He also served in supply chain roles at Shands at The University of Florida and HCA Healthcare, among other organizations. He and his wife, Andrey, have a son and three daughters.

About Indiana University Health Indiana University Health is the largest hospital system in Indiana by revenues, with 16 acute care hospitals, physician offices, ambulatory care ranging from home health to surgery centers, and a health plan. It has a unique partnership with Indiana University School of Medicine, the largest U.S. medical school by enrollment. The Academic Health Center in downtown Indianapolis includes Riley Hospital for Children at IU Health, the state’s most comprehensive children’s hospital; and IU Health Methodist Hospital, the largest hospital in the state.

August 2018 | The Journal of Healthcare Contracting

Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding supply-chainrelated project in which you have been involved in the past 12-18 months? Dennis Mullins: The design, construction and implementation of IU Health’s Integrated Service Center, which opened in May 2018. This was the first service center I was able to help build from the ground up, but I had prior experience with consolidated centers with Columbia/HCA, Shands and Baylor Scott and White. A rainstorm was the event that expedited our decision at IU Health to move ahead with an integrated service center. Our building that held medical records and equipment was badly damaged, and we needed to make some short-term and long-term decisions. I felt that the integrated service center was the best business model. I visited what I consider to be best-in-class consolidated centers around the country before embarking on our project. Our ISC will be the most innovative provider-based distribution center in the country. It is equipped with robotic goods-to-person picking technology, which will allow staff to pick low-unit-of-measure supplies at a rate of 200 lines per hour per person. This will provide an opportunity for us to distribute supplies to our 16 hospitals in an efficient and timely way. In addition to the distribution of supplies, we are also planning to convert to a self-distribution business model, which will be the primary way we will realize a return on the investment.

robotics, we feel we can integrate the delivery of supplies and save quite a bit of money. JHC: How have you improved the way you approach your profession in the last 5 to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant? Mullins: Career growth has always been at the forefront of my approach to my profession. That’s not to say that I haven’t had help along the way. I’d have to say that my wife, Audrey Mullins, has been my biggest help. She’s kept me grounded, motivated and focused the last 22 years; not to mention that I’ve never had to worry about home during this journey. She’s kept that stress away from me. I’m truly thankful.

“ There is a gap in practical experience between supply chain professionals at the hospitals and those working the corporate office.”

JHC: Please describe a project you look forward to working on in the next year. Mullins: Next year our focus will be refining our ISC business model as well as exploring the growth and expansion of the ISC by adding other service lines that have supply chain and or logistics components. We want to be a catalyst for change. We have quite a bit of space that has yet to be built out. When we look at growth and expansion opportunities, we’ll take a look at every service line that makes sense. One of our biggest opportunities is moving into the non-acute space. We have 460 or so non-acute locations around the state. Vehicles from our reference lab already support them. With over 3,400 SKUs and our high-velocity

The Journal of Healthcare Contracting | August 2018

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STEVE POHLMAN Senior Director, Materials Management Cleveland Clinic Cleveland, Ohio

A native of Southwest Ohio, Steve Pohlman received his undergraduate degree in industrial engineering from the University of Dayton. He also holds an MBA from Wright State University.

“ Over the last five to 10 years, I have gotten better at going into every situation with my eyes – and my ears – wide open.” Prior to beginning his healthcare career in 1997, he worked in manufacturing in both the auto and welding industries. He joined Cleveland Clinic as part of the Akron General Health System acquisition in 2015. Prior to that, he held many positions

with Akron General Health System, including associate vice president of service operations, director of materials management, director of linen services, manager of procurement and purchasing, and manager of sterile processing. Before joining Akron General, he worked as a sourcing manager for Premier Health Partners in Dayton, Ohio. Currently, he and his wife reside in Northeast Ohio with their two children.

About Cleveland Clinic Cleveland Clinic is an academic medical center founded in 1921. In addition to the main hospital campus in downtown Cleveland – which has 1,400 beds, 101 operating rooms and 59 buildings – the system has 10 regional hospitals and more than 150 outpatient locations in northern Ohio. Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding

August 2018 | The Journal of Healthcare Contracting

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“A major part of my responsibility is encouraging my team to be change agents. And a big part of that is listening.” supply-chain-related project in which you have been involved in the past 12-18 months? Steve Pohlman: Inventory management transformation (or IMT) is an enterprise wide initiative. The enterprise consists of 10 regional hospitals and the main campus. Our goal is to use RFID technology to manage implantable devices (orthopedic implants, cardiac rhythm management devices, etc) across our enterprise. We will do so in the OR, cath lab, EP lab and interventional radiology, so everyone in the system will have complete visibility to what we have on hand. Prior to implementing RFID, our IMT Center of Excellence – which is a group of 10 project managers – is working on a complete workflow redesign in an effort to relieve nurses from managing supplies, so they can focus on patient care. JHC: Please describe a project you look forward to working on in the next year. Pohlman: In 2019, we’ll take the IMT to our main campus – 88 ORs across six buildings. We’re excited about it, because not only will it free up our nurses’ time and help us manage inventory, but it will contribute to our systemwide goal of patient safety. Because all implants will be RFIDtagged, we will have complete visibility for improved implant management. JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant?

Pohlman: I have always been involved in operations and managing change. Over the last five to 10 years, I have gotten better at going into every situation with my eyes – and my ears – wide open. Healthcare is extremely fast-paced, and we operate in a very matrixed organization. A major part of my responsibility is encouraging my team to be change agents. And a big part of that is listening. When I was younger, I thought I had all the answers. Now, I listen more and react less. And when I do respond or give feedback, I make sure it’s honest. It’s important to be honest, to be yourself, to follow your morals and values JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Pohlman: Future supply chain professionals will have the same cost pressures that we’ve all had, but they will find new ways to address them, perhaps through thirdparty relationships or new technologies. They will also have to cultivate an environment of customer service. I take the attitude that if “my” nurses don’t have what they need to take care of the patient, I’ve failed somehow. Tomorrow’s professionals will have to get out of their offices and meet their customers in their territory. People enjoy telling you what they do and how they do it. It’s a way to build relationships. It’s good to be in tune with technology; but don’t forget the art of conversation and relationship-building.

August 2018 | The Journal of Healthcare Contracting

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KATE POLCZYNSKI Associate vice president, procurement Geisinger Danville, Pennsylvania

Born and raised in Danville, Pennsylvania, Kate Polczynski received a bachelor’s degree from the University of Pittsburgh at Johnstown and a master’s of business administration from Shippensburg University. She also has a Certificate of Achievement in Lean Six Sigma Black Belt from Villanova University, and is a Certified Materials and Resource Professional as administered by the American Hospital Association. Additionally, she has served as an adjunct professor at Bloomsburg University of Pennsylvania, Zeigler College of Business. “While in college, the ‘Supply Chain’ classes focused on logistics, and ‘Contracting’ classes were for those moving toward a legal profession,” she says. “But once I was exposed by my mentors to the strategy, data and negotiation elements of healthcare contracting, I was hooked. I have always had a passion to contribute to the healthcare industry, and found that while working in Procurement I could utilize my business skills, while having the ability to impact a patient’s journey.” She joined the Geisinger procurement team directly out of college, as an assistant buyer. Looking to use her Lean toolbox and broaden her knowledge about patient outcomes and data, she move to the system’s Quality and Safety department, and explored pay-for-performance contracting. She rejoined the procurement team in July 2017. Polczynski and

“I have found that while working in Procurement I could utilize my business skills, while having the ability to impact a patient’s journey.”

her husband, Eric, have two children. “They remind me to cherish each day as a new opportunity to positively impact others, continue learning and challenge the norm for a better tomorrow.”

About Geisinger Danville, Pennsylvania-based Geisinger serves more than 3 million residents throughout 45 counties in central, south-central and northeastern Pennsylvania and in southern New Jersey. The physician-led system is comprised of approximately 30,000 employees, including 1,600 employed physicians, and comprises 13 hospital campuses and two research centers. Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding supply-chain-related project in which you have been involved in the past 1218 months?

August 2018 | The Journal of Healthcare Contracting

Kate Polczynski: Our team has had many large contracting engagements that have resulted in savings for our organization. But for me, the more rewarding projects have been specific to overcoming challenges, as a team, to more directly impact the patient. As an example, the healthcare industry faced significant challenges this past year specific to product availability. From a contracting perspective, traditional tactics utilized to secure favorable pricing by limiting suppliers has left many organizations vulnerable when natural disasters, or other factors, create shortages. So too have inventory-reduction initiatives by providers and suppliers. Our team has worked tirelessly to ensure that our patients have the supplies that they need, and we have used new contracting strategies to accomplish these goals. We make sure our contracts address failure-to-supply. And as we look to future contracting cycles, we will take into consideration factors such as, “Where is the product manufactured?” “How many companies can supply it?”

have any help doing so, or was there any particular incident that was particularly significant? Polczynski: I continuously seem to evolve and adjust my approach as life experiences take me down different paths to expand my learning. During my career, I have always tried to utilize data and strategic planning in all stages of the sourcing and contracting process, with the attitude to never stop learning. This skill set now drives my home and work lives, so that all necessary tasks are completed. Coupling these skills with a lean toolbox has been critical to optimizing success at work. I have been very fortunate to

“ Traditional tactics utilized to secure favorable pricing by limiting suppliers has left many organizations vulnerable when natural disasters, or other factors, create shortages.”

JHC: Please describe a project you look forward to working on in the next year. Polczynski: Our team is expanding its work in outside purchased services. This has been a very interesting exploration phase and I have learned so much already. The contracting in this space is a bit different and presents a new element of opportunity. There are usually many suppliers for a given service, and they often are regional. In the service space, the potential exists for different types of outcomes or performance standards for the same service. It takes effort to ensure you are getting the service you expected. As we look toward an increasingly challenging landscape within healthcare, driving a focus towards total cost of ownership, I am excited to partner with our clinical and operations leaders to explore projects that engage beyond “price at the pump” contracting, keeping quality and patient outcome top of mind, using data or evidence to drive decision-making.

JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you

The Journal of Healthcare Contracting | August 2018

have an amazing family, group of peers and mentors to assist me in personal growth and development during my professional journey. Recognizing that I am still early in my career, I couldn’t be more excited to tackle the next chapter to come. JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Polczynski: The next generation of supply chain professionals will have the challenge of being masters of many skills, not limited to data analytics, lean thinking, project management skills, savvy negotiation, and a personality to drive change with many varieties of stakeholders.

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LISA THAKUR, CPA, MBA, FACHE, FHFMA Corporate senior vice president, ancillary operations Scripps Health San Diego, California

In her current role, Lisa Thakur is responsible for ancillary services and business at Scripps Health, such as home health, laboratory, imaging and other business services. She holds a bachelor’s degree in business administration from the University of Washington, and a master’s of business administration from Arizona State

“ Supply chain folks need to get out and work directly with physicians as true partners, and not just tell them what the priorities are.” University. She is a Certified Public Accountant (CPA) and a member of the American Institute of Certified Public Accountants. Prior to joining Scripps Health, she worked as a finance and business manager at Good Samaritan Medical Center in Phoenix. She also managed financial operations

and human resources for Freedom Plaza Retirement Center/ Care Center in Peoria, Arizona. In 1998, Thakur joined Scripps Memorial Hospital La Jolla, where she was chief financial officer and then chief operating officer. In 2013, she was one of four site executives tapped to move Scripps toward a horizontal, matrixed organizational structure. As corporate vice president of clinical and support services, she assumed system responsibility for supply chain, endoscopy, perioperative services and pharmacy, bringing new system alignment to these functions, which resulted in cost savings of $130 million over six years. Born and raised in Seattle, Washington, she has two teenage boys, ages 15 and 18.

About Scripps Health Founded in 1924 Scripps Health treats more than 700,000 patients

August 2018 | The Journal of Healthcare Contracting

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annually at its five acute-care hospital campuses, home health care services, 27 outpatient centers and clinics and hundreds of affiliated physician offices. Scripps is also at the forefront of clinical research and has three graduate medical education programs. Journal of Healthcare Contracting: Can you describe the most challenging and/or rewarding supply-chain-related project in which you have been involved in the past 12-18 months? Lisa Thakur: Setting up and leading a new value analysis team. Traditionally, when IDNs speak about value analysis, they are referring to consolidating implant vendors or improving the

team brings to the table; they trust us as well as their own decision-making capabilities. Supply Chain has gone from having folks question what we were doing and why we were doing it, to becoming one of Scripps’ top-four strategic objectives for the past two years, with amazing results. JHC: Please describe a project you look forward to working on in the next year. Thakur: Scripps Health recently implemented a new leadership structure in which physicians have oversight over the medical quality and operational efficiency at each of our five hospital campuses in a new Physician Operating Executive (POE) role. Supply Chain is partnering with these new physician leaders on value analysis projects that identify areas of practice variation, utilization opportunities, and overall cost reduction strategies, but that also maintain or improve quality and the patient experience.

“ Our physicians have come to respect the unique expertise and skill that the supply chain team brings to the table; they trust us as well as their own decisionmaking capabilities.” way they manage new-product requests. We wanted to revamp value analysis and place supply chain in the middle of it. And we have done so. Today, our contracting team and I meet with physicians to analyze new products or standardization opportunities. Typically, a nurse and a data analyst also attend, so we can discuss clinical evidence, utilization and potential contracting strategies. It’s a different type of approach – one that has called for adjustment on our side and that of our physicians. Supply chain provides the physicians with a menu of options, including potential financial and clinical outcomes of their decisions, but leave the ultimate decision-making to the physicians. Our physicians have come to respect the unique expertise and skill that the supply chain

JHC: How have you improved the way you approach your profession in the last five to 10 years? Did you have any help doing so, or was there any particular incident that was particularly significant? Thakur: I have focused more on working directly with physicians and trying to better understand their perspectives. I started presenting potential options to them and then asking them to decide on priorities. I strategize more on what can be done and prioritize based on increasing levels of difficulty. JHC: In your opinion, what will be some of the challenges or opportunities facing the next generation of supply chain professionals? What should they be doing now to prepare to successfully meet those challenges and opportunities? Thakur: Supply chain folks need to get out and work directly with physicians as true partners, and not just tell them what the priorities are. They need to focus on more than just sourcing and standardization, but also utilization. Also, having nurses work in supply chain to bridge the gaps between clinical and supply chain is an imperative.

August 2018 | The Journal of Healthcare Contracting

VIZIENT

Portfolio for Vizient committed program growing

The portfolio of contracts in Vizient’s Achieve Committed Program™ is growing steadily, according to the company. At press time, the portfolio included more than 80 contracts and 10,600 items. Sixteen of the categories in the program had two or more suppliers for participants to choose from. Launched in May, the program is intended to build on an existing portfolio that represents more than 45 percent of a hospital’s medical/surgical supply purchases. “Our members have expressed an increased interest in programs that offer significant value Contract compliance in exchange for purchasing commitment,” says monitoring is Pete Allen, executive vice president, sourcing automatic and operations for Vizient. “By participating, they proactive to enable are able to shift their resources from locally dialogue between negotiating commodity contracts to a focus on providers and tackling bigger opportunities for cost savings suppliers to improve and process improvement, such as clinical/supply integration or driving operational efficiency market penetration through their supply chain operations.” and value.

The Journal of Healthcare Contracting | August 2018

Vizient believes that members who choose to participate in the Achieve Program will receive: • Savings of 6 to 12 percent through improved pricing and rebates in select commodity and clinical preference categories. • Easy access to spend data through an analytics platform that tracks participation. • Increased efficiency by shifting the negotiation and management of locally negotiated categories to the Achieve Program. Launched in May, the Achieve Program addresses suppliers’ need for predictability and commitment from members, according to Vizient. Contract compliance monitoring is automatic and proactive to enable dialogue between providers and suppliers to improve market penetration and value. The Achieve program is an expansion of committed offerings currently available to Vizient members, says Allen. The company reports that the Impact Standardization program has returned more than $1.8 billion to participants to date, and in 2017, the Vizient Pharmacy Program grew to $53 billion in committed spend. “Others trying to build this type of program from scratch are significantly challenged due to the market-building dilemma,” says David Gillan, senior vice president, sourcing operations for Vizient. “Suppliers want to know what volume of spend they’re pricing against, while members want to know which suppliers they’d be converting to. It’s the chicken-and-egg scenario, and it’s one we’ve solved for. Our program is based on a portfolio of member-vetted products, and leverages committed volume already in place.”

TRENDS

Hospital-acquired conditions are down

National efforts to reduce hospital-acquired conditions, such as adverse drug events and injuries from falls, helped prevent an estimated 8,000 deaths and save $2.9 billion between 2014 and 2016, according to a report released this summer by the Agency for Healthcare Research and Quality. AHRQ estimates that 350,000 hospital-acquired conditions were avoided and the rate was reduced by 8 percent from 2014 to 2016. Federal experts note that the gains in safety among hospital patients echoed earlier successes, including 2.1 million hospital-acquired conditions avoided between 2010 and 2014. Examples of hospital-acquired conditions include adverse drug events, catheter-associated urinary tract infections, central-line-associated bloodstream infections, pressure injuries, and surgical site infections, among others. The Centers for Medicare & Medicaid Services has set a goal of reducing hospital-acquired conditions by 20 percent from 2014 through 2019. Through the work of the Hospital Improvement Innovation Networks (HIINs), CMS

The Centers for Medicare & Medicaid Services has set a goal of reducing hospital-acquired conditions by 20 percent from 2014 through 2019.

provides quality improvement assistance to more than 4,000 of the nation’s 5,000 hospitals in the form of best practices in harm reduction. Once the 20 percent reduction goal is met, AHRQ projects that during 2015 through 2019, there will be 1.8 million fewer patients with hospital-acquired conditions, resulting in 53,000 fewer deaths and saving $19.1 billion in hospital costs from 2015 through 2019. Data in the new “AHRQ National Scorecard on Hospital-Acquired Conditions” shows that overall harms decreased in several categories, such as infections and adverse drug events, which dropped 15 percent from 2014 to 2016. Opportunities for further improvement exist for reducing some harms, such as pressure ulcers, which increased from 2014 to 2016.

August 2018 | The Journal of Healthcare Contracting