JHC DEC 19 by BOC design Inc

Providing Insight, Understanding and Community

December 2019 | Vol.15 No.6

Women Leaders in Supply Chain Robin Lincoln Senior Vice President, Supplier Relations and Contract Operations Capstone Health Alliance Asheville, North Carolina

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CONTENTS »» DECEMBER 2019 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 Daniel Beaird dbeaird@sharemovingmedia.com Art Director Brent Cashman bcashman@sharemovingmedia.com Publisher John Pritchard jpritchard@sharemovingmedia.com Vice President of Sales Katie Educate keducate@sharemovingmedia.com Sales Executive - East Lizette Anthonijs Lizette@sharemovingmedia.com Sales Executive - West Amy Cochran acochran@sharemovingmedia.com Circulation Wai Bun Cheung wcheung@sharemovingmedia.com

Women Leaders in Supply Chain Angela Miller

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 2019 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.

2 Editor’s Letter: What does it take to be a leader?

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.

36 Leading the Charge

Vision, communication skills, empathy and simply being nice

4 Meet the point-of-care coordinator They bring order to many points of care

42 Les Friend: Staying in touch 44 Will today’s ‘kickback’ be tomorrow’s ‘value-based arrangement?’ Proposed rules from HHS could change what’s accepted and what’s not in today’s expanding continuum of care

12 AboutHealth: A collaborative approach

47 Calendar

14 Women Leaders in Supply Chain

48 Collaborate with your distributor to ensure pricing accuracy

Novant Health’s supply chain team has adopted a hybrid model to support its non-acute facilities.

40 Room for one more?

Are non-acute providers ready for one more e-commerce marketplace for healthcare and business supplies? Do med/surg distributors need another sales outlet? Premier is betting ‘Yes.’

The Journal of Healthcare Contracting | December 2019

50 Providers tell suppliers how it is Issues on the table at HIDA Streamlining Healthcare

52 Contracting News & Notes

EDITOR’S LETTER

Mark Thill

What does it take to be a leader? Vision, communication skills, empathy and simply being nice

Things I learned about leadership from this year’s Women Leaders in Supply Chain: • “I have always believed if you develop a culture of trust, the relationship will flourish, and success will be easier to achieve no matter the level of complexity. Always listen to others, be open to advice and ideas, and always look for ways to be better.” – Aimee Hollier • “I have learned that leading with authenticity and building trust and alignment with all constituents who are touched by the services we provide, are core ingredients of leadership.” – Amanda Chawla • “A successful supply chain leader is an individual who knows the value of their team around them, and who supports and believes in their strengths and weaknesses. [He or she] builds character with that team and truly appreciates them. A leader is one who has the company’s values at heart and also looks ahead to changes that may be ahead.” – Amber Hancock • “Listen and hear your team and customers and find the common ground that moves everyone forward to a mutual goal. Be a mentor, but understand mentoring goes both ways – you can learn as much as you teach. Last, and most important to me: Be nice. It can be contagious and create a more relaxed work environment, where people are encouraged to express their thoughts and ideas.” – Angela Miller • “Leaders today and in the future can’t get stuck in believing that what worked in the past will work going forward. Leaders need to listen to those on the front lines in the hospitals and the support staff about what’s working, what isn’t, and their ideas.” – Diane Gorrell • “I know now that as the system grows and technology advances, change is inevitable. As a leader, it is my responsibility to embrace and communicate the ‘why’ behind the change.” – Emily Perry • “Compassionate leadership, emotional intelligence and the ability to drive and support innovation will continue to be key characteristics of a successful supply chain leader. The ability to empower others, encourage innovative thinking and coach teams to embrace change are important to continue driving healthcare forward and for developing the leaders of the future.” – Jennifer Tokash • “One of the ways that I’ve grown the most is learning how better to balance the needs of the corporation as a whole vs. the individual facility or individual clinician.” – Karen Regal

• “It is important for everyone to be at the table, understanding the goals, both financial and contractual, to ensure that the organization’s best interests are being served. The ability to see the big picture, from a strategic standpoint, and to communicate that vision in an articulate manner, keeps everyone aligned.” – Kendra Moravek • “I spent one summer during college doing genetic research while also working on a Congressional campaign. We lost the campaign, but I won with the knowledge that I could make a difference in understanding how our laws and regulations affect everyday people, healthcare providers, the healthcare system at large, and the lives we lead.” – Khatereh Calleja • “I believe the key characteristic of a successful supply chain leader is the ability to communicate and collaborate with all levels within the supply system. It is a team effort from the C-suite, physicians, clinician leaders, end users and vendors.” – Mary Phillips • “The world is changing so quickly around us that staying on top of key developments in multiple fields is really important. Hiring and retaining top talent is critical for success and getting buy-in and support from key stakeholders across the ecosystem.” – Rachael Fleurence • “The supply chain leaders I admire most use innovation, leadership, and team building in conjunction with their supply chain focus, and have the tenacity to take on complex, long-term projects.” – Robin Lincoln

December 2019 | The Journal of Healthcare Contracting

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EXECUTIVE INTERVIEW

Who’s minding the store? Enter the point-of-care coordinator (POCC). Jeanne Mumford, MT, is pathology manager at Johns Hopkins Medicine in Baltimore. She has a staff of five point-of-care coordinators, located at two academic hospitals, and oversees quality at three community hospitals, and a physician-office system. She became a medical technologist in 2000 and has been in the Johns Hopkins system since 2010. Share Moving Media, publisher of the Journal of Healthcare Contracting, recently spoke with Mumford about the role of the point-of-care coordinator in today’s hospitals and health systems. The Journal of Healthcare Contracting: The point of care coordinator: Is this a new position in the industry? Jeanne Mumford: It’s not new, but given the growth of point-of-care testing, it has become more widely recognized. In the past – and still, to some extent, today – point-of-care testing was overseen by bench techs who wear many hats in the lab. But quality oversight of a well-run POCT is a full-time job. Having other pathology duties in addition to the POCC role is very difficult to maintain.

Jeanne Mumford

Meet the point-ofcare coordinator They bring order to many points of care

Health systems keep growing, and so does the volume of point-of-care tests being conducted in their acute- and non-acute-care settings. Needless to say, the management challenges associated with POC testing are growing as well. For example, who is doing testing in the hospitals and far-flung non-hospital sites? Who is overseeing their qualifications and work for quality control purposes? Is testing equipment monitored for quality purposes? Has anybody tried standardizing test equipment and kits across the system?

The Journal of Healthcare Contracting: Describe a typical day in the life of a POC coordinator. Mumford: One very difficult lesson to learn as a point of care coordinator is that you seldom have a procedure or policy that tells you how to be a POCC – how to work with multidisciplinary teams in clinical settings, or even how to negotiate or work with vendor/industry reps.

December 2019 | The Journal of Healthcare Contracting

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EXECUTIVE INTERVIEW

Each day brings a unique set of challenges and workload. Adaptation and critical thinking are key skills for this role. A typical day is spent “putting out fires” or fixing the one hot issue that seems to come up every single day. We inventory our reagents and supplies, and check in with vendors or supply chain for the next shipments and lot number delivery dates. Once we receive new shipments of reagents and supplies, we validate them and distribute to either our central supply folks or straight to the units doing the tests. We visit our units or satellite sites across the state or region daily, weekly, or on a set month-to-month schedule. With the units and testing personnel, we troubleshoot local issues, communicate changes or updates, and basically check in to see how things are going on a day-to-day basis. Visibility on the units is so important to establishing trust and a relationship with testing personnel.

“ One of our new challenges is learning how to work with our hospital and system IT folks to connect and maintain our interfaces with our point-of-care instruments.” We also check in and validate new tests and new instruments, which could be replacements for broken ones, and we visit with units that are adding additional instruments. We train and document training and competency on testing personnel – sometimes by the thousands – on the procedures that we write for each test system. We monitor our middleware software for interface errors, manage connectivity, troubleshoot, and work to fix the errors in the system. If we are lucky, this is all done in eight hours a day, 40 hours a week. The Journal of Healthcare Contracting: In the past five years or so, has the POC coordinator’s job or responsibility been affected by developments in POC testing itself? If so, what POC developments or trends would you point to? Mumford: Technology advancements do affect the role of the POCC. For the most part, they are positive attributes. Quicker turnaround times, convenience at the patient bedside, smaller instrument footprints and better methodologies are characteristics sought after in the pointof-care-testing world just as in the central labs.

Connectivity is the key word here. More and more, point-of-care testing programs across the country are looking to interface their POC tests. In the past, this was an area of IT in which only the central lab instruments fell. One of our new challenges is learning how to work with our hospital and system IT folks to connect and maintain our interfaces with our point-of-care instruments. Five years ago, across all of Johns Hopkins Medicine, we began implementing a single middleware product, a single laboratory information system, and a single patient medical record. All of our point-of-care instruments are now connected through a single IT platform. This has made my staff ’s work much easier than it used to be. The Journal of Healthcare Contracting: What challenges (or opportunities) are presented to the POC coordinator when the hospital or health system acquires another hospital, long-term-care facility, or a medical group with multiple clinics? Mumford: Standardization and harmonization are both the blessing and curse when establishing new partnerships. Standardization is the act of switching all the laboratory/POC instruments and test kits to the same instrument/system. It involves upgrading everyone to one centralized IT platform. From the patient medical record, to the laboratory interface, to the POC middleware, the entire infrastructure should, ideally, be rebuilt to a single platform. The same goes for the central laboratory systems. They, too, should be standardized to one vendor/methodology for financial and clinical efficiency. Harmonization refers to policies and procedures that cover all facilities under one document or manual. For instance, as we standardize to a single glucometer, we are working to have a single procedure in a manual for all of the hospitals and medical

December 2019 | The Journal of Healthcare Contracting

groups. Harmonization also refers to harmonizing all of the laboratory tests. Another challenge for expanding health systems is finding best practices for workflow, instrumentation, procedures and IT structure. Walking into these institutions and saying, “Switch to our instruments, policies, and workflow,” doesn’t work. It breeds discontent. It is prudent to sit down with all of the business owners and find out what is working and what isn’t working within the current systems. Then, work with purchasing or supply chain and find the right pricing model for your system. Sometimes the right price beats the best technology when it comes to decision-making for acquisitions and new instrumentation. The Journal of Healthcare Contracting: How involved is the POC coordinator in evaluating and selecting new point-ofcare testing systems. Mumford: In my setting – a large academic health system – our point-of-care coordinators are fully engaged in evaluating new POC testing systems. We work with our central laboratory and medical directors to evaluate the analytics of new point-of-care systems. We also work with research units or clinical teams when they perform clinical evaluations on new technologies. For coordinators who lack these resources to evaluate new technologies, networking with POCCs who can offer their data and feedback can help them to stay up to date on new tests. In a well-organized and well-maintained POCT program, sales representatives approach the pathology department with new technology before “selling” it to the doctors. Our point-of-care coordinators and medical directors test new technologies in real world settings which go far beyond what the CLIA regulations and FDA 510(k) standards call for. Having a symbiotic relationship with manufacturers is the key to unlocking the potential in all technologies. Manufacturers who work

The Journal of Healthcare Contracting | December 2019

with point-of-care coordinators as experts of the products or systems in which they are used can develop instruments and technologies that meet all the needs of the POCT program, current and future. The Journal of Healthcare Contracting: What are the two or three most challenging “people-related” issues the POC coordinator must deal with in today’s multi-hospital system? Mumford: One challenge is learning how to communicate in a blamefree and meaningful way. It takes time and practice. Also challenging is learning how to help testing personnel from clinical teams understand the regulations that must be followed when performing laboratory tests – as well as the consequences we all face when these requirements are not met. Clinical teams don’t necessarily “speak the language” of the lab; nor do point-of-care coordinators “speak the language” of patient care teams. (We jokingly refer to these two languages as “nurse-ese” and “lab-ese.”) For example, when we write procedures for the lab tests, we tend to use terms that we understand in the lab and that are in line with our regulatory bodies. But clinical teams, such as nursing, don’t comprehend laboratory lingo, despite their science-based field of study. Conversely, point-of-care coordinators don’t know nursing teaching models. The best outcomes revolve around capturing the most meaningful communication tools to mix the laboratory’s regulatory needs with the nursing/clinical needs. Clinical teams want to treat patients; they don’t want to do laboratory testing. We try really hard to have relationships with our clinical teams that allow them the time they need to take care of their patients. Another challenge is the fact that in many POCT programs, lab staff seldom meet with clinical teams on a regular basis to hash out challenges, celebrate successes, and prepare for upcoming changes. Lab staff have their scheduled team meetings, and the clinical teams have theirs. Learning how to schedule time together without filling everyone’s calendars with needless meetings is a real challenge. Also, point-of-care coordinators lack authority to discipline testing personnel who don’t follow procedures. This goes back to communication skills and how to help testing personnel understand why and how to perform certain tasks. The misconception about POCT is that you put a sample into a device or instrument, you get a result, and you move on with your day. That is just a very small portion of what is done to maintain a point-of-care testing program according to regulations. One more challenge comes to mind: disseminating information from the POCT program to all three shifts of testing personnel in every single unit that does point-of-care testing. Some of our programs are so large, and testing personnel can number in the thousands. What’s more, geographic distribution can cover an entire state.

SPONSORED:

McKESSON

Non-acute care: With challenges come opportunities enforcing – formularies, automating purchasing, and ensuring timely delivery of supplies and equipment. And, of course, supply chain often must do all this without hiring additional FTEs.

USP <800>: Guidelines for clinicians that handle NIOSH hazardous drugs

New USP standard regarding hazardous drugs may be next test of supply chain’s ability to equip and protect caregivers across the care continuum

Question: Has servicing your health system’s non-acute sites evolved from “nagging concern” to “business imperative?” If so, it’s little wonder, says Greg Colizzi, vice president, marketing, health systems, McKesson Medical-Surgical. Ninety-five percent of patient visits are now estimated to occur in the non-hospital setting, according to The Advisory Board Company Health Care Industry Trends, 2017, said Colizzi, speaking at a recent Supply Chain Leadership Forum in Kansas City hosted by McKesson. Supply chain teams across the country are being tasked with bringing order, efficiency and, of course, cost-savings, to this clientele. That calls for establishing – and

The challenges of servicing this complicated, fragmented healthcare sector will be front and center in December, when the new USP General Chapter <800> goes into effect. USP <800> is designed to ensure the safe handling of hazardous drugs in the acute and nonacute environment, participants at the Forum pointed out. In order to avoid serious health risks and potential fines, health systems should be creating policy and procedures to protect their staff. USP is a not-for-profit, sciencedriven organization that has an established process for convening independent experts to develop and maintain healthcare quality standards. Growing evidence shows that acute and chronic health effects can occur due to occupational exposure to over 200 hazardous drugs commonly used in healthcare settings, according to the organization. USP <800> defines responsibilities of personnel handling hazardous drugs; increasing engineering controls; use of appropriate, tested

December 2019 | The Journal of Healthcare Contracting

PPE; establishing procedures for deactivating, decontaminating and cleaning; and providing spill control and appropriate cleaning products wherever NIOSH drugs are stored, handled and administered. Supply chain will play an important role in helping systems meet USP <800> standards, said Angie Choiniere, RPh, pharmacy accreditation and regulatory compliance, Ochsner Health System, New Orleans, speaking at the Forum. “We must make our employees aware of the hazards in our system, and train them how to protect themselves and those around them.”

“Today we are able to control what’s going out the door, always mindful of our spend.” – Chris Voorhees, CMRP

The Journal of Healthcare Contracting | December 2019

Supply chain can help identify compliant products: • Impermeable gowns. • Hazardous-drug residue • Chemo-rated latex exam gloves. surface-testing products. • Chemo-rated nitrile • Surface decontamination and exam gloves. disinfectant products. • Chemo-rated polyisoprene • Spill kits with capacity to exam gloves. clean 1000ml. • Chemo-rated surgical gloves. • Closed-system transfer devices. • Absorbent mats • Face shields. • Zipper sealing bags of • Respirators. various sizes • Eye protection. • Headwear and footwear.

And because the standards apply to all healthcare personnel who receive, prepare, administer, transport or otherwise come in contact with hazardous drugs, supply chain will have to reach into all areas of the health system – not just pharmacy, but nursing, lab/phlebotomy, specialty clinics (such as urology), EVS, Sterile Processing and couriers, etc. One participant at the forum mentioned that she is already fielding calls from lawyers seeking more information on USP <800>. She drew a parallel between the phone calls and potential class action lawsuits such as those seen on TV advertisements.

SPONSORED:

McKESSON

What’s more, supply chain will be responsible for researching manufacturers’ claims concerning the ability of their products to help the health system comply with the new standard, pointed out Choiniere. Supply chain executives can look to their non-acute distributor for help in identifying and acquiring cost-effective products to comply with USP <800>.

A ‘good journey’ taking control of their non-acute continuum At the Supply Chain Leadership Forum, Chris Voorhees, CMRP, administrative director, materials and support services at Hunterdon Healthcare in Flemington, New Jersey, shared how her system migrated from a self-distribution model to a

Your lab strategy As health systems expand, so do the number of locations where lab testing is performed. Often, health systems allow newly acquired sites or practices to continue testing as they always have. But that approach comes with a cost, both in terms of patient care and dollars spent. Lab tests represent 2% of healthcare spending and influence 70% of the medical decisions, according to the Health Industry Distributors Association. By creating a uniform testing criteria throughout the system, a patient with diabetes, for example, will receive consistent diagnoses and treatment recommendations regardless of the facility he or she visits, said John Harris, director of strategic accounts, laboratory, for McKesson Medical-Surgical, speaking at the recent Supply Chain Leadership Forum in Kansas City. Having a well-vetted nearpatient lab strategy can also help the health system achieve some of their key quality measures and increase patient satisfaction by offering real-time test results, he added. Supply chain can play a role in lab strategy as well. “In the non-acute space, you have an opportunity to whittle down the number of products used and to help enforce a standard of care throughout the organization,” Harris said. “That’s why we see more and more systems creating a non-acute lab strategy.”

hybrid one, relying on her distributor to service Hunterdon’s 100+ offsite locations, spread out over four counties. Four years ago, Voorhees found her department struggling with rapid growth at Hunterdon. “We added as many as 17 or 18 sites in one year, with no additional FTEs,” she said. The Hunterdon team found it difficult to keep the shelves stocked for both the acute-care and non-acute locations. In her research, Voorhees came upon two eye-openers. First, she found that a relatively small number of products – maybe 600 – were being couriered to the offsite locations. And second, she discovered that the offsite locations were often using the same products as the acute-care hospital, when they didn’t necessarily need to. Nitrile gloves were an example. Working with their non-acute distributor, they formed a team to drive standardization into the non-acute sites. Voorhees said that the team made a comparative analysis of products, including private label. “Today we are able to control what’s going out the door, always mindful of our spend,” she said. “We use McKesson Business Analytics to see what the offsite locations are using and how much they’re spending. Through the McKesson Business Analytics Tool, we are able to drive standardization. Through McKesson, we are able to lock in and enforce a formulary. “It’s been a good journey.”

Note: For a straightforward explanation of USP <800>, read McKesson’s “Best practices for the safe handling of hazardous drugs – How to prepare for USP <800>,” at https://mms.mckesson.com/content/clinical-resources/regulatory-roundup/usp-general-chapter-800/ Shop for products compliant with USP General Chapter <800> at https://mms.mckesson.com/content/clinical-resources/regulatoryroundup/usp-general-chapter-800/usp-general-chapter-800-product-catalog/

December 2019 | The Journal of Healthcare Contracting

Hazardous drugs put your staff at risk Let’s keep them safe with better USP <800> compliance Protect Your Non-Acute Staff from Hazardous Drug Exposure

More than 12 billion doses of hazardous drugs are administered in the U.S. every year.* With each of these doses comes the chance that medical staff—from clinicians to custodians to delivery handlers—will be exposed to New USP General Chapter <800> standards take effect December 1, 2019 substances that put their health on the line.

8 million+

The best treatment for your patients or residents may mean your clinicians need to handle drugs classified as hazardous. To avoid serious risks and fines, be sure your staff know how to protect themselves from accidental exposure.

This December, USP <800> will set new standards for handling hazardous drugs. McKesson is here, ready to assist, with tools andProtect support that can keep your workplace your staff and stay compliant USP <800> compliant and keep your staff safe. According to the regulations, hazardous drugs:

• Can materially change the composition of the body • Include hormones and chemotherapy, which are often administered in a non-acute setting • May be used in physician offices, surgery centers, long term care facilities, cancer centers, urgent care centers and for home infusion the non-acute continuum.

Learn more at mms.mckesson.com/usp The distributor of

Prepare for the new standards with online resources,

*Source: USP.org

and the compliant products you need: • • • • • •

Closed chemotherapy transfer devices Personal protective equipment that meets ASTM standards Needleless equipment Gloves, gowns, hoods and shoe covers Cleaning and decontamination products Waste disposal

healthcare workers are exposed to hazardous drugs in the U.S. every year*

RPC PROFILE

AboutHealth: A collaborative approach

“As an overall implementation plan is identified, each owner develops an implementation plan based upon its internal capacity and capabilities,” explains Schipper. “Progress is shared and discussed as subsequent meetings are held following collaboratives. This is when movement, successes or struggles are shared. Data is used to measure the impact on patient care.”

In 2018, several owners of AboutHealth (Appleton, WI) engaged in a joint effort to identify and recover invoice payment errors, and to identify process improvements to eliminate future errors. Agreeing on a single recovery/ audit service vendor for all their audit recovery efforts resulted in lower engagement fees than each owner would have paid individually for the same service. That’s how a regional purchasing coalition is supposed to work. AboutHealth was formed in 2014 to evaluate ways to save money on employee insurance costs, explains Erin Schipper, director, shared savings implementation. Its six health systems represent more than 40 hospitals and 350 clinics, spread primarily throughout Wisconsin as well as parts of neighboring states.

Clinical care considerations In addition to exploring opportunities in purchased services, owners meet regularly to arrive at best practices for clinical care and healthcare operations. They call these quarterly gatherings “collaboratives,” and they typically span one to two days. In the most recent collaborative, clinicians focused on how to reduce the incidence, morbidity, mortality and resource use associated with sepsis and septic shock, says Schipper. Their goal was identifying, implementing and measuring evidence-based processes to aid in the prevention, early detection and treatment of these diagnoses. The next collaborative will be geared toward IT, specifically to discuss implementation of Office 365 by Microsoft among AboutHealth owners.

Some results: Diabetes. Since the spring of 2015, teams from each owner system have met regularly to share best practices and hold each other accountable for care of patients with diabetes. “As a result, over 53,000 people with diabetes under our care are now optimally controlled” based on most recent blood sugar and blood pressure results, smoking cessation, taking aspirin for diabetes patients with Ischemic Vascular Disease (IVD) unless contraindicated, and use of cholesterol medication for patients ages 40 through 75 or patients with IVD of any age, says Schipper. This improvement has not only prevented heart attacks and strokes, but has also avoided over $38 million of medical costs. Back surgery. Four out of five Americans suffer from low back pain at some point in their lives, and about 500,000 people have back surgery every year, says Schipper. “Our owners have been working since Fall 2016 to improve outcomes for these patients. Collectively, we have reduced complications following back surgery by 67 percent.” Heart disease. By focusing on rapid intervention for heart attacks, strategies

December 2019 | The Journal of Healthcare Contracting

to shorten post-surgical ICU stays, and increased usage of cardiac rehabilitation, AboutHealth owners have reduced the death rate following heart surgery by 59%. Total knee replacement. Since bringing together 70 orthopedic surgeons, nurses, physical therapists, quality and operational experts to discuss best practices, AboutHealth’s six owner systems have reduced post-operative complications by 49% and length of hospital stay by 39%.

Shared services It is up to AboutHealth owners to identify shared-services initiatives they wish to explore, says Schipper. “We develop an annual plan based on these ideas and collect high-level data, including current spend, variability amongst the owners with regard to cost, vendors, or processes. Then we establish a team for each initiative based on expertise required.” In the project on invoice payment errors, the AboutHealth team contracted with an analysis/audit vendor, who then interviewed staff

and reviewed procedures in each owner’s purchasing and accounts payable departments. The vendor reviewed paid invoices as well as procurement and accounts payable data files, validating purchases and other related documentation for accuracy in: • Pricing • Contract compliance • Discount terms • Sales tax • Freight • Rebates • Erroneous/duplicate payments to vendors The auditors reviewed all invoices for every vendor within the time period each owner system requested, continues Schipper. This review identified prompt payment discounts offered by vendors not taken, duplicate payments made for the same invoice, and taxes or freight charged and paid that should have been exempt. Owners reviewed potential payment error details to confirm their validity, then authorized the auditors to proceed with collection from vendors. Vendors were contacted to remit a check or credit memo for the payment error. “At the conclusion of the audit, a summary of results and a formal audit report were provided,” she says. “The final report outlined areas for improvement as well as specific recommendations to prevent these issues from occurring in the future. This audit recovered a total of $615,996 within the four participating owner organizations.”

HealthCare Connect Fund

AboutHealth owners • Aspirus (Wausau, WI) •A dvocate Aurora Health (Downers Grove, IL, and Milwaukee, WI) • Bellin Health Partners (Green Bay, WI) • Gundersen Health System (La Crosse, WI) • ProHealth Care (Waukesha County, WI) • ThedaCare (Appleton, WI)

The Journal of Healthcare Contracting | December 2019

Working together, AboutHealth owners addressed a problem that often affects small and rural hospitals – gaining access to an affordable, high-quality network. “Securing access at the bandwidth required to support electronic health records is not always available or affordable,” says Schipper. So AboutHealth created the HealthCare Connect Fund (HCF), which provides support for high-capacity broadband connectivity. Eligible healthcare providers receive a discount from the fund on all eligible telecommunication expenses. The initiative generated almost $2.8 million in savings for owners in 2018, and resulted in upgrades to more advanced solutions and the installation of new and improved technology. “To be truly transformational, we need to not only share insights, but develop new practices together that change the way healthcare is delivered,” says Schipper. “We need to analyze data in a way that allows us to predict trends, not just react to them. We need to continue to find solutions to bend the cost curve.” “We have laid a successful foundation, and our early successes make us optimistic about what we can achieve moving forward.”

Women Leaders in Supply Chain

Editorâ&#x20AC;&#x2122;s note: Welcome to our annual celebration of women leadership in the supply chain. Youâ&#x20AC;&#x2122;ll find these women come from many backgrounds, with many different interests, experiences and mentors. But they share a few things in common: Enthusiasm. Intelligence. Gratitude. Enjoy their stories.

December 2019 | The Journal of Healthcare Contracting

Non-acute product and service standardization can be painful . The possibilities of managing disparate care sites are endless. But so are the complexities when it comes to navigating, coordinating and communicating around contract compliance, reimbursement trends, cost avoidance/restructuring, and operational efficiency.

Have you exhausted all efforts to improve Contract Compliance?

Are you concerned with missing out on changing Reimbursement Trends?

Are you overwhelmed with managing Cost Avoidance discussions?

Is navigating Operational Efficiency an ongoing problem?

Visit www.HenrySchein.com/nonacuteSOLUTIONS to sign-up for a complimentary consultation.

WOMEN LEADERS

IN SUPPLY CHAIN

is in safeguarding patient care. “Even minor disruptions to the supply chain can have significant impacts on the healthcare system,” she says. And as president and CEO of HSCA, “I continue to advocate for patient health and be a strong voice for the healthcare supply chain in Washington.”

Describe a key mentor or event in your life.

Khatereh Calleja President/CEO Healthcare Supply Chain Association Washington, DC

Khatereh Calleja joined HSCA – the trade association for GPOs – in April 2019, following 20 years in the healthcare system, most recently as senior vice president of technology and regulatory affairs for AdvaMed, the association for manufacturers. She was born and raised in Baltimore, Maryland, the child of a scientist and physician. “Johns Hopkins brought both my parents to the area to study, teach or work, and we never left,” she says. Calleja originally wanted to work as a healthcare provider. “I have a passion for helping people, and I wanted to do what I could to help people become healthy and stay healthy,” she says. “Then I learned that working in healthcare policy could have a similar and even broader impact on patient care. Having the right policies in place enables providers to deliver the best care for patients and allows the healthcare industry to continue to innovate and improve.” Over the years, Calleja has seen how vital the healthcare supply chain

“I spent one summer during college doing genetic research while also working on a Congressional campaign,” she says. “We lost the campaign, but I won with the knowledge that I could make a difference in understanding how our laws and regulations affect everyday people, healthcare providers, the healthcare system at large, and the lives we lead. I did not know that you could advocate in such an important way. “I realized I wanted to work in healthcare policy and help impact people through my work there. I changed my major to political science and biology, and started to actively seek internships in global and U.S. healthcare policy. I’ve been involved in healthcare policy ever since.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “Although I have only been directly involved in the supply chain this past year, during my time as president and CEO, I have witnessed so many ways in which healthcare group purchasing organizations are shaping the supply chain,” says Calleja. “GPOs are on the front lines of patient care, working with providers and other

stakeholders on everything from identifying innovative technologies to spearheading emergency response efforts to preventing and mitigating drug shortages.”

Describe the key characteristics of the successful supply chain leader of the future. • Innovation. “We need to keep innovating and improving to bring the best expertise to our customers.” • Collaboration. “Listen intently to member needs and strive to meet them every day. Maintaining a partnership with the members that you serve is critical to helping them thrive and meet the quality, performance, and value needs of the healthcare industry. • Leadership. “As an industry, it is critical that we educate other stakeholders and the broader public on what we do. The [GPO] industry must not simply fulfill our commitment, but rather demonstrate our commitment to the very best in healthcare. Whether we are working to support the everyday needs of a member, or we are on the front lines of a disaster relief effort, we are key partners that work alongside providers so they can take care of patients.” “I am proud of our industry’s commitment to bring the best and brightest minds to help solve healthcare problems. GPOs do not simply provide cost-savings. We are acting as information powerhouses to foster value and optimal healthcare.”

December 2019 | The Journal of Healthcare Contracting

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specialize in healthcare supply chain. “Supply chain is a function that is a core part of any organization, touching every aspect downstream and upstream,” she says. Tackling complex processes, developing wide-ranging relationships and becoming a strategic partner for the healthcare organization are things she enjoys most about supply chain.

Amanda Chawla Vice President of Supply Chain Stanford Health Care Palo Alto, California

Born in Punjab, India, and raised in Seattle, Washington, Amanda Chawla watched her parents work tirelessly to raise their family in the United States. It wasn’t easy. Her father, PJ, did factory work, while her mother, Dee, worked as a cook. “Growing up with parents with strong work ethics and educational aspirations they couldn’t achieve, I recognized the self-drive to succeed,” she says. “I knew early on I wanted to help people.” At age 17, she completed a medical assistant certification program and started to work immediately after as a unit clerk supporting clinical care. She concurrently completed her graduate studies obtaining a fellowship in healthcare administration, and moved into a variety of support and leadership roles. She worked in several management roles, from business management, health inspector, clinic administrator to vice president of operations over several years, and ultimately decided to

Describe a key mentor or event in your life. Chawla’s desire to serve others matured as she grew into senior operational leadership roles. It was a chief human resources officer, Theresa Gianfortune, who served as an informal mentor. Chawla describes her as a strong, compassionate, articulate leader, who was evangelical in her approach. “We would work together on some of the most

“Our greatest job and duty is to take care of our leaders and the people who take care of our patients. She is a role model and strong proponent of the advancement of women leadership.” challenging transformations, people relations and culture dynamics. Theresa’s commitment, consistent leadership approach, and integrity held strong in every situation. “The most notable thing she taught me was that we are in the people business; it is about the people we

serve,” says Chawla. “Our greatest job and duty is to take care of our leaders and the people who take care of our patients. She is a role model and strong proponent of the advancement of women leadership.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? Chawla views supply chain as a key partner that touches every aspect of the organization. “I have learned that leading with authenticity, and building trust and alignment with all constituents who are touched by the services we provide are core ingredients of leadership. As healthcare has evolved, it is ‘nonnegotiable’ that we become clinically integrated, [and that we] bring together all aspects of people, process and technology to provide a core service and serve as a strategic partner in value-based care.”

Describe the key characteristics of the successful supply chain leader of the future. •P ossesses strong change-management, communication and collaboration skills. • Understands that relationships are vital, and a non-negotiable; supply chain is complex. • Serves, provides mentorship and coaching – elevating the next level. • Possesses transformational characteristics to understand the core aspects of supply chain, the needs of the organization, and the future of healthcare driving the next evolution of supply chain.

December 2019 | The Journal of Healthcare Contracting

Rachael Fleurence Executive Director National Evaluation System for health Technology Coordinating Center (NESTcc) Arlington, Virginia

Born in Canterbury, England, and raised in Antibes, France, health economist Rachael Fleurence has always been interested in studying large, complex systems and understanding how to disrupt them to improve them. It’s no coincidence that she’s working on one of the biggest, most complex systems of all – U.S. healthcare. Early in her career, Fleurence worked for the World Health Organization, which at the time had just launched an initiative to quantify the Global Burden of Disease (GBD). The experience led her to go back to school to pursue a master’s in health economics and a PhD. After WHO, she worked for a health outcomes research consultancy and then joined the PatientCentered Outcomes Research Institute (PCORI) in 2012. There, she launched and led a program called

PCORnet, an effort involving 130 medical institutions and patient organizations whose mission was to accelerate clinical research. It was at PCORI that Fleurence became interested in supply chain issues. “One aim of this work was to leverage data generated in the course of care at these health systems using a variety of sources of data, such as electronic health records, claims, billing data, pharmacy data, wearables and mobile technology, and supply chain data; then organize and curate it so it could be used for clinical research purposes, for example, comparative effectiveness studies, and retrospective and prospective clinical studies. “Supply chain data can be very valuable for these types of studies, particularly for medical devices, which are not always captured directly in EHR data.” Supply chain registries have proved important sources of information to complete the data to support her research, she adds. In 2017, Fleurence was named executive director of the National Evaluation System for health Technology Coordinating Center, or NESTcc, whose mission is to harness digital data from electronic health records, insurance claims, registries, etc., to evaluate the effectiveness and value of medical equipment and supplies.

Describe a key mentor or event in your life. In July 2012, when she was at PCORI, “some of the most senior leaders from the healthcare ecosystem – including academia, non-profit, government, private and public sector – came

The Journal of Healthcare Contracting | December 2019

together for a meeting in Palo Alto and developed a vision for increasing the efficiency, cost and timeliness of clinical research in the United States,” she recalls. “The vision was to leverage the digital data transformation that was generating significant levels of data, and the strength and wisdom of patients advocating for better research to support questions that mattered to them. It was a powerful and inspiring meeting, where the energy for change was palpable and where I was inspired to contribute in any role that I could.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “I have learned to look for outstanding talent, support them the best I can, and let them run with things. My strong interest in learning continues to be a strong element of my leadership, but it also looks different than early in my career. Now, I mainly try to stay abreast of large picture and policy developments in our field rather than dive into the details and depths of any one topic.”

Describe the key characteristics of the successful supply chain leader of the future. • A thirst for learning. “The world is changing so quickly around us that staying on top of key developments in multiple fields is really important,” she says. • Emotional intelligence. “Hiring and retaining top talent is critical for success, and getting buy-in and support from key stakeholders across the ecosystem.”

WOMEN LEADERS

IN SUPPLY CHAIN

Diane Gorrell Manager, Contracts Universal Health Services King of Prussia, Pennsylvania

Contracting has been a focal point of Diane Gorrell’s professional life for 30 years. But she didn’t start out in healthcare. Born and raised in Bridgeport, Pennsylvania, Gorrell in 1988 joined what was then one of the biggest computer companies in the world – Digital Equipment Corporation, known as “DEC.” Its specialty was what the industry called “minicomputers.” As customer service revenue administrator at DEC’s regional office in Philadelphia, Gorrell worked on pricing for hardware maintenance and software updates for DEC’s systems, many of which were installed in hospitals. Consolidation eventually cost Gorrell her position with DEC, so she took a few years off to raise two children. In 2000, she re-entered the workforce, taking a position in clinical purchasing for Sanofi, the Frenchbased pharmaceutical firm. At Sanofi, she worked with clinical study coordinators to contract for the services of

outside research organizations, such as those that did patient recruiting or who examined lab specimens – basically “any of the services that would go into the actual running of a study,” she says. “It was my first foray into healthcare and knowing that at some level my work could help people was a good feeling.” In January 2011, Gorrell became a sourcing and contract analyst for Universal Health Services, a hospital management comprising acute-care hospitals, ambulatory surgery centers, behavioral health facilities and other sites.

Rick, also was very supportive of me and my career aspirations.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “I’m a new leader of a year and a half, and I believe there are lots of exciting challenges to face. My last 8 ½ years at UHS and with previous employers have taught me that as a leader, you need to listen, really listen, and pay attention. Support your staff and give them the tools they need to succeed and let them know you appreciate the hard work they put in every day.”

Describe a key mentor or event in your life.

Describe the key characteristics of the successful supply chain leader of the future.

“Education was important to my parents and my brothers, and we were told there wasn’t anything we

“It’s an ever-changing environment, and what worked 15, 10 or even five years ago, may not necessarily work

“Leaders need to listen to those on the front lines in the hospitals and the support staff about what’s working, what isn’t, and their ideas.” couldn’t accomplish by working hard,” she says. “In addition, I have been fortunate to work for managers who challenged me with new opportunities and took a chance. When I think back, they were mentors, and now I realize they believed in me and supported my growth. My husband,

today,” she says. “Leaders today and in the future can’t get stuck in believing that what worked in the past will work going forward. Leaders need to listen to those on the front lines in the hospitals and the support staff about what’s working, what isn’t, and their ideas.”

December 2019 | The Journal of Healthcare Contracting

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The big takeaway? “To know at the end of the day we help our staff get the equipment and services they need to get patients back into their community and homes.”

Describe a key mentor or event in your life.

Amber Hancock Associate Director, SCO Development & Field Operations Encompass Health Birmingham, Alabama

Growing up in Birmingham, Alabama, Amber Hancock knew what she wanted to do: Help people, make others and herself happy, be passionate, and never stop learning. By all measures, she has achieved her goals. Hancock joined the materials management department of Encompass Health (then HealthSouth) in 2001. She was responsible for purchasing furniture for all of the company’s divisions – medical centers, inpatient rehabilitation facilities, outpatient center, surgery centers and diagnostic centers. Today, she has responsibility for the day-to-day supply-chain-related activities of Encompass Health’s 135 rehab facilities. In supply chain, her team oversees many national contracts and vendor relationships, which include food, drugs, medical equipment, furniture and services. “Every day is something different,” she says. “I love it, and it keeps you on your toes!”

Hancock considers herself fortunate to have had many mentors and leaders in her life, many of them family. “All my grandparents lived close, and we spent time together making many fond memories I will remember for years to come,” she says. Her father, Bobby, “was and still is the hardest-working and tender-hearted man I know. He worked long, odd hours to provide for our family, and he spent time with us – working on cars, raising various animals, learning new things.”

“Every day is something different. I love it, and it keeps you on your toes!” Her mother, Sally, a 29-year breastcancer survivor, is “a very brave and strong woman,” she says. “I was in middle school when she had breast cancer. We saw her go through so much – losing a good bit of her hair and going through chemo. But she never once asked ‘why’ or complained.” Drake, her husband, “is my best friend and my rock, always by my side as the changes come and go. He

has always encouraged me to push on and through.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? A former leader, James Allen, empowered Hancock to do things she didn’t think she could do, she says. “He gave me the tools and believed in me. He supported my ideas and helped me present them to others. It gave me the confidence I needed to realize that I can do more than I thought I ever could. She tries to support her team in the same way. “I don’t ask them to do anything I wouldn’t be willing to do myself,” she says. “We work together as a team, and that goes a long way. We are a small department, but a powerful one. “I have also learned that overthinking may work against you at times. We work on many projects, all at different stages, and you need to be able to switch from one to another quickly. Attention to detail comes to mind as well: With all those projects, you need to know where you stand at any time to ensure you are staying within the budget and timeline.”

Describe the key characteristics of the successful supply chain leader of the future. “A successful supply chain leader is an individual who knows the value of their team around them, and who supports and believes in their strengths and weaknesses,” she says. “[He or she] builds character with that team and truly appreciates them. A leader is one who has the company’s values at heart and also looks ahead to changes that may be ahead.”

December 2019 | The Journal of Healthcare Contracting

Aimee Hollier Director of Supply Chain Operations LifePoint Health Brentwood, Tennessee

Born and raised in Huntington, West Virginia, Hollier attended the University of Kentucky, where she majored in Russian and Eastern European Studies. “During college, I participated in a foreign exchange program and attended school in Vladimir, Russia, a small town east of Moscow. Early on, I thought my career would take the path as a language translator for either a corporation or for the government.”

Describe a key event in your life. During her senior year of college, Hollier experienced what she describes as a life-changing event – the unexpected death of her father. She moved to Bradenton, Florida, for a fresh start, and responded to a job posting for a distribution technician in the materials management department at the local hospital. “At that time, I had no idea that supply chain management would be my future career path,” she says. “The manager took a chance on someone with no

previous healthcare experience, but something clicked for me.” Soon after, she was promoted to warehouse manager. “I realized how much I enjoyed the teamwork and the interaction with others in the hospital. I could see the many opportunities within healthcare.” During the first 15 years of her supply chain career in Florida, Hollier transitioned from working in a standalone hospital to working in a shared services environment for HCA West Florida. She rose from distribution clerk to supply chain director at multiple hospitals in the market. In 2013 she moved to Atlanta to serve as

in my career groomed me for the next. Starting with the foundational supply chain roles and working my way up over the last 21 years has given me the knowledge and competence to perform my job successfully and to support my hospital supply chain teams.”

Describe the key characteristics of the successful supply chain leader of the future. First and foremost, the successful leader cultivates the ability to develop strong and positive working relationships both internal and external to the organization, says Hollier. “It has always been my motto that you can learn the job

“I realized how much I enjoyed the teamwork and the interaction with others in the hospital. I could see the many opportunities within healthcare.” market director and later to Nashville as a supply chain director for HCA TriStar Division. In July 2015, she joined HCA-spinoff LifePoint Health as director of supply chain operations.

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “I have been fortunate to have worked with some amazing supply chain leaders who had the ability to get the best from their staff and believed in self-evaluation as a means for improvement,” says Hollier. “I have never stopped learning and developing. Each supply chain role

The Journal of Healthcare Contracting | December 2019

skill, but you need the passion and energy to build the relationships. The connections that are built are important to the success of your supply chain program. I have always believed if you develop a culture of trust, the relationship will flourish, and success will be easier to achieve no matter the level of complexity. Always listen to others, be open to advice and ideas, and always look for ways to be better. “Be ready for change! The supply chain environment is evolving every day, and you need the ability to drive change, to be innovative, and most important, to enjoy the interaction with others.”.

WOMEN LEADERS

IN SUPPLY CHAIN

Robin Lincoln Senior Vice President, Supplier Relations and Contract Operations Capstone Health Alliance Asheville, North Carolina

Born in San Juan, Puerto Rico, but raised in West Tennessee, Robin Lincoln is the daughter of first- and second-generation immigrants. Her father, Michael, was born in Poland, but left that country when he was 16 to join the Royal Air Force in World War II. Neither he nor Robin’s mother, Olefie, went to college, “but they always shared with me their work ethic and their belief in loyalty to your employer, your faith and your family,” she says. Lincoln got an undergraduate degree in computer science, and went to work in hardware and software support for Sprint. Four years later, she joined The Faneuil Group in Johnson City, Tennessee, which provided customer support for clients of the Bell System of telephone companies. Ultimately she managed a 350-employee call center for the firm. In 2001 she took a turn into healthcare, first as project manager and ultimately, vice president and COO for

Wilson Pharmacy and Home Health, a closed-door, retail and compounding operation. “Healthcare can be frustrating to someone new to it, in that it’s not driven by numbers and sometimes not even by logic, but by clinicians’ passion about their patients,” she says. “I have been impressed and humbled by that clinical passion, and find it an ongoing challenge to achieve efficiencies without compromising patient care.”

“Throughout my career, I can think of several leaders who took a leap of faith and encouraged me to take positions that were, in all honesty, a stretch for my capabilities.” Lincoln became director of Synergy Health Group, a 22-hospital networking group, in 2006, and then director of group purchasing for WNC Health Network – now Capstone Health Alliance, a regional group purchasing alliance and a Premier owner.

Describe a key mentor or event in your life. “Throughout my career, I can think of several leaders who took a leap of faith and encouraged me to take positions that were, in all honesty, a stretch for my capabilities,” she says. “Guy Wilson, the president and CEO of the pharmacy and my first intro to healthcare, was a true entrepreneur, who invested millions in automation and challenged us to do things differently

every day. Those opportunities created a commitment to continuous learning for me. I have also tried to pattern myself after leaders who have a great work/life balance and work hard to promote those around them.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “Supply chain in healthcare is much more than a numbers game and requires the perspective of cost, quality, and outcomes. My key takeaway has been to involve as many cross-functional stakeholders as possible early in any product or process evaluation to gain their perspective. Also, as leaders, we need to be able to clearly articulate goals and expected outcomes to our teams when we present opportunities for change.”

Describe the key characteristics of the successful supply chain leader of the future. “The supply chain leaders I admire most are committed to supporting the goals of the entire health system, including patient care, financial, and strategic objectives,” says Lincoln. “These supply chain leaders use innovation, leadership, and team building in conjunction with their supply chain focus, and have the tenacity to take on complex, long-term projects. They are energetic and persistent in their efforts to achieve results, and tend to focus on the more complex and higher spend categories that drive the greatest results. I would recommend healthcare supply chain to energetic leaders of the future who have a desire to make positive changes in the healthcare of their communities.”

December 2019 | The Journal of Healthcare Contracting

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WOMEN LEADERS

IN SUPPLY CHAIN

Angela Miller Division Vice President, Strategic Sourcing Kindred Healthcare Louisville, Kentucky

Growing up on a 25-acre farm in Wentzville, Missouri, Angela Miller learned skills that have served her well over the years, including a sense of responsibility and accountability, satisfaction in accomplishing a goal, a desire to make her parents (Ron Balducci and Brenda Jones) proud of her, and the ability to figure out a way to get things done even when you don’t have what you need to do so. “I learned to be creative,” she says. A highly recruited track athlete coming out of high school, Miller ultimately chose to join the Air Force. “I was attracted to the idea of serving my country, meeting new people and learning a valuable trade in the process,” she says. Military life provided the self-discipline and team-centric environment she desired. “My brother had joined the Marine Corps, and I was encouraged by his career choice to follow a similar path,” she says. “It seemed like a perfect fit.”

For nine years, Miller assumed supply chain management roles at Air Force hospitals in Illinois, Alaska and Nebraska. (She met her husband at Scott Air Force Base in southern Illinois.) After her discharge, she served as vice president of operations for MediGroup Physician Services (a nonacute-care-focused GPO) and then as director of med/surg for Intalere. In 2010, she joined Resource Optimization & Innovation (ROi) as a senior strategic sourcing manager; ultimately, she was named executive director of medical contracting. (ROi was acquired by HealthTrust in October 2019.)

“Listen and hear your team and customers and find the common ground that moves everyone forward to a mutual goal. Be a mentor, but understand mentoring goes both ways – you can learn as much as you teach. In April 2019, she joined Kindred Healthcare, the Louisville, Kentuckybased system of transitional care hospitals, inpatient rehabilitation hospitals, subacute units, and other nonacute services. She is charged with developing and leading a strategic sourcing team as part of Kindred’s supply chain.

Describe a key mentor or event in your life. “I have been blessed to have had some truly fantastic co-workers and leaders

throughout my career, who helped shape the person and leader I am today,” says Miller. “I gained a solid foundation in supply chain management during my time in the Air Force, and my post-military career has been filled with opportunities to learn from talented individuals who mentored, supported and trusted me as I took on increased levels of responsibility.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “I am a better leader today than I was a decade ago because I’ve learned the value of collaboration,” she says. “Knowing that one person cannot and does not have all the answers and being a participant of the teams, you lead, are critical to success. I’m a firm believer that creating a culture where fun is central is key to building and keeping a dedicated and focused team.”

Describe the key characteristics of the successful supply chain leader of the future. “It is important to build true, meaningful relationships,” she says. “Listen and hear your team and customers and find the common ground that moves everyone forward to a mutual goal. Be a mentor, but understand mentoring goes both ways – you can learn as much as you teach. “Last, and most important to me: Be nice. It can be contagious and create a more relaxed work environment where people are encouraged to express their thoughts and ideas. It’s simple, yet powerful.”

December 2019 | The Journal of Healthcare Contracting

Moravek says she responded profoundly to the methods used by the military, and to serving as the conduit for supplies and equipment to those in a war zone. “We helped the people on our team get the things they needed,” she says. It was a lesson she carries with her today, only now, her team comprises caregivers, and their mission is to care for patients.

Kendra Moravek Director, Strategic Sourcing and Contracting Nexera Inc. New York, New York

Raised in Texas and New Mexico, Kendra Moravek learned about the crucial role of supply chain from a well-informed and experienced team – the U.S. Army – in a momentous place and time – Iraq, 2003. “I joined the Army a few months after graduating from high school, about a month before the events of September 11,” says Moravek, who is now in the management services area of Nexera, a healthcare consulting firm that is part of the Greater New York Hospital Association. Her initial duty station in the Army was in Germany, and her unit was one of the first deployed to Iraq in 2003. “I selected logistics because I thought it would be exciting,” she says. “I didn’t want to sit behind a desk. And I wanted to serve my country and the world. “Who doesn’t need fuel in their vehicle, oil in their trucks, or supplies and equipment for their Blackhawk helicopters?” she says.

“I believe that the successful supply chain leader of the future builds relationships with internal team members and suppliers. It is important for everyone to be at the table, understanding the goals, both financial and contractual, to ensure that the organization’s best interests are being served.”

“I’m very much in support services, and I have been for 20 years.”

Describe a key mentor or event in your life. “I have to acknowledge that my parents instilled in me the belief that I am capable of anything, as long as I am willing to work for it. I also credit the military for the experiences that taught me about process and structure and how to deal with difficult situations. “I have had the extraordinary good fortune to have an amazing mentor in my career – Ray Davis (now with Universal Health Services, and with

The Journal of Healthcare Contracting | December 2019

whom Moravek worked while both were at Banner Health in Chandler, Arizona), who pushed me outside my comfort zone, and who continues to provide counsel and learning opportunities. He always encourages me to be the very best version of myself.” Davis has a gift of providing good, constructive feedback, and he always presents it in a positive light, she adds.

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “I believe I’ve grown in the areas of strategic thinking and negotiation,” she says. “I have spent my postmilitary career in the healthcare industry, in both non-acute and acute models. Because of the positions I held in the early years – in payables and finance – my view of the procure-to-pay process encompasses the complete supply chain continuum. I think this gives me a broader understanding of what it takes to build successful teams, relationships and strategies.”

Describe the key characteristics of the successful supply chain leader of the future. “I believe that the successful supply chain leader of the future builds relationships with internal team members and suppliers. It is important for everyone to be at the table, understanding the goals, both financial and contractual, to ensure that the organization’s best interests are being served. The ability to see the big picture, from a strategic standpoint, and to communicate that vision in an articulate manner, keeps everyone aligned.”

WOMEN LEADERS

IN SUPPLY CHAIN

resource management, corporate operations for Atrium Health. She has material oversight for more than 650 non-acute care sites for the health system, and for more than 500 additional non-acute care sites within Atrium Health Supply Chain Alliance. She created a formulary for all non-acute sites, resulting in standardization of products, higher contract compliance and over 20% reduction in spend.

Emily Perry Manager, Material Resource Management Corporate Operations Atrium Health Charlotte, North Carolina

Born and raised in Kings Mountain, North Carolina, Emily Perry had an early interest in nursing but gravitated toward healthcare operations early in her career. For 12 years, she worked in a physician practice in Gastonia, North Carolina – Riverwood Medical Associates (now part of Atrium Health) – first as medical records manager, and later as office coordinator. While there, she converted the practice from paper to electronic charts; initialized and applied the ability to receive and send faxes electronically; and used electronic medical record submission for North Carolina Disability Determination Services, and electronic signatures for home health documents. In 2012 she was named practice manager for Piedmont GYN/OB Steele Creek. Two years after that, she became senior manager of ambulatory services for Riverwood Medical Associates. Then, in July 2015, she became manager of materials

Describe a key mentor or event in your life. A defining moment in Perry’s career was her decision to move to Charlotte, North Carolina. “I had been in the same position for years without growth, and finally realized that I was the one holding myself back,” she says. “To grow, I needed to get out of my comfort zone.”

“Every leader I have had at Atrium has played a role in developing, mentoring and shaping my career growth in one way or another. They were all interested and intentional in how they could help me grow, and truly invested in me.” Four years later, she found herself in supply chain. “My leaders believed my background and understanding of the unique needs of the non-acute space would be a valuable asset for the supply chain team, and would give me an opportunity to build on what

had been created,” she says. “At the time, I had no way of knowing what moving to supply chain would do for my career, but it certainly propelled it beyond my expectations. “Every leader I have had at Atrium has played a role in developing, mentoring and shaping my career growth in one way or another. They were all interested and intentional in how they could help me grow, and truly invested in me.” She points to her current leader, Greg Raber, as a key influencer. It was Raber who asked her to join the supply chain team.

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “I understand the decisions that are made at a higher level much more than I did 10 years ago,” she says. “I know now that as the system grows and technology advances, change is inevitable. As a leader, it is my responsibility to embrace and communicate the ‘why’ behind the change.”

Describe the key characteristics of the successful supply chain leader of the future. • Understands the need from all aspects. • Understands that restricting yourself or others from what looks or seems impossible is not beneficial. • Is willing to take a chance, knowing that every effort may not end in success. • Keeps in mind that decisions on products have an impact on patient care – not just the bottom line.

December 2019 | The Journal of Healthcare Contracting

Mary Phillips Materials Management Manager South County Health Wakefield, Rhode Island

As a college student, Mary Phillips aspired to be successful in the business community. But she was also drawn to public service, partly because her mother, also named Mary, was active in the Head Start program in Rhode Island, first as an aide, ultimately as a director. In fact, her mother was so involved in early childhood education, she sat on a committee with thenFirst Lady Barbara Bush. “There weren’t any ‘Supply Chain’ classes when I was attending college,” says Phillips, though some marketing and management classes did touch upon the subject. “I always enjoyed working with people, so I decided that public administration would cover the people aspect and still [provide] the marketing and management curriculum.” In her senior year of college, Phillips had the opportunity to serve as an intern in Washington D.C., for Speaker of the House Tip O’Neill, from Boston. It turns out a good friend’s brother had married O’Neill’s

daughter. “It’s a Rhode Island story,” she says. Upon graduation, Phillips found herself speaking to someone who knew of an opening in the purchasing department of a company. Two years later, the company moved, forcing her to look for another job. “I interviewed for a ‘temporary’ buyer position with a community hospital, and what was temporary resulted in 32 years of a great career,” she says. She joined South County Health about four years ago.

Describe a key mentor or event in your life. “I was fortunate enough to work with the same director for over 30 years,” says Phillips. “I cannot thank Tom Gardner enough for his leadership, guidance, direction and support. We

cost of goods always seems to be on the rise. My team and I use our value analysis committees, Yankee/Premier GPO contracts, and benchmarking tools to become more effective and efficient while taking costs out of the system – without compromising quality and patient safety. “In addition, the involvement from the physicians is huge,” she continues. An orthopedic surgeon and chief medical officer are involved in South County Health’s value analysis committee. “This allows for direct communication, and has allowed me to become a better negotiator with our vendors.” The value analysis committee is comprised of the clinical leaders, the chief nursing officer and South County Health’s primary distribution vendor – Claflin Company. “Again, it’s

“I believe the key characteristic of a successful supply chain leader is the ability to communicate and collaborate with all levels within the supply system.” both grew in our positions and worked as a team that adapted to the changes in healthcare over the years.” She was promoted from buyer, to supervisor, then to purchasing manager for three hospitals following their merger.

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “With over 35 years experience, I have seen many changes,” she says. “I think the last few years have certainly been the most challenging, as payers reduce reimbursement and the

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a great tool for sharing information and fostering communication within the supply chain.”

Describe the key characteristics of the successful supply chain leader of the future. I believe the key characteristic of a successful supply chain leader is the ability to communicate and collaborate with all levels within the supply system,” she says. “It is a team effort from the C-suite, physicians, clinician leaders, end users, and partnerships with vendors.”

WOMEN LEADERS

IN SUPPLY CHAIN

Karen Regal Director, Clinical Resource Management Community Health Systems Franklin, Tennessee

As a student, Karen Regal majored in history and had an interest in archeology. Then life intervened. At age 21, she got married and moved with her husband – a dental lab technician – to Guam. The couple lived there six years, then returned to Chattanooga, Tennessee, where Regal had lived as a teenager. They had another child, and Regal took a job as a receptionist in a dental office. Though she found satisfaction in her job, “I wanted to accomplish more,” she says. So, in her 30s, she made a radical decision – return to school and get a nursing degree. “I was on a different wavelength” than many college students, she says. “Instead of focusing on, ‘Who will I have a date with this weekend?’ like you do when you’re 19, I enjoyed tackling and winning over skill sets I hadn’t mastered before, like statistics and algebra.” She blended her experience in labor/delivery, med/surg and pediatric

ICU, and found her way to IV nursing. She loved the work, ultimately becoming the manager of her department and eventually a director over IV access quality. In that position she was regularly involved in her facility’s value analysis team. “Our regional director, Tim Fix, must have seen something in me that made him think I’d be great in supply chain, because he convinced me to apply for a job on the newly formed value analysis team for the corporation,” she recalls. “I did and was hired for the

at my first facility,” says Regal. “She took me under her wing and taught me the ropes. She taught me about contracts, operations, how to interact with vendors and how to approach difficult conversations. I truly miss working with her now that I’ve moved to a different corporation.”

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? “One of the ways that I’ve grown the most is learning how better to balance

“ My key mentor for this work was Beverly Slate, the supply chain director at my first facility. She took me under her wing and taught me the ropes. She taught me about contracts, operations, how to interact with vendors and how to approach difficult conversations. I truly miss working with her now that I’ve moved to a different corporation.” position. That was in 2012, and I haven’t looked back. I love what I do!” In her role as director of clinical resource management, she provides and guides nursing’s perspective on supply chain initiatives, such as product standardization.

the needs of the corporation as a whole vs. the individual facility or individual clinician,” she says.

Describe a key mentor or event in your life.

“In my opinion it would be that we learn to partner with our vendors and our clinicians to achieve mutual goals for this new paradigm.”

“My key mentor for this work was Beverly Slate, the supply chain director

Describe the key characteristics of the successful supply chain leader of the future.

December 2019 | The Journal of Healthcare Contracting

Jennifer Tokash Director, Indirect Category Management OhioHealth Columbus, Ohio

Jennifer Tokash grew up knowing she would be the first one from either side of her family to graduate from a fouryear college. That’s because her father, Jim, a metallurgist until his retirement, and her mother, Paulette, an office manager for a trucking company are “two amazing people,” she says. “Because of their encouragement, they instilled in me a sense that I could do anything I set my mind to.” Of course, she knew she’d have to work hard, and she credits her parents for that bit of information too. “They really ingrained that work ethic in me,” she says. Born in New Jersey and raised in New York and West Virginia, Tokash did indeed go to college – Marshall University in Huntington, West Virginia. “I almost fell into economics there,” she says. “I was good at math, though I didn’t want to go into finance.” She worked in various contracting and strategic sourcing roles before getting her start in healthcare in 2004,

when she became supplier relations manager for Cardinal Health. “As my healthcare career progressed, I gained an understanding of how the distribution model contributed to providers in their mission to deliver exceptional patient care,” she says. For two years she was a sourcing executive at Vizient, and in 2012, she joined OhioHealth as manager of procurement operations. Today, as director of indirect category management, she has responsibility for purchased services, IT and capital. “Working for OhioHealth and seeing the provider perspective, I feel a deep connection to the mission of patient care. Everyone at OhioHealth plays an important role in caring for our patients, and it’s extremely rewarding to know your work helps make a difference.”

Describe a key mentor or event in your life. “I’m blessed to have parents that are always so supportive and my biggest cheerleaders,” says Tokash. “I’m grateful to them for empowering me to do more than I thought possible and instilling in me a great work ethic. Additionally, I have an amazing husband, Mike, who has great compassion and ability for being steadfast in living by values and priorities, which has helped me also shape my own leadership vision. “I’ve also been blessed to have worked with amazing leaders at OhioHealth, in particular, my director, Jamie Yolles. She has been a great mentor and role model of compassionate leadership, and she has encouraged me to work outside

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my comfort zone as a way to enhance my leadership skills. She was very supportive in my move to procurement manager, and her coaching and feedback were instrumental as I began to take those first steps in leading a large department.

In what way(s) are you a better supply chain leader than you were, say, five or 10 years ago? For Tokash, leadership means “leading and empowering team members, building communication skills to influence others’ openness to transformational change, learning to move from tactical operations to strategic thinking, creating an organizational vision, and inspiring others to understand the importance of the work they do in support of the organization and its goals.” Her experience as procurement manager has helped her become a formal leader, and her current role as director of indirect category management has taught her about the importance of building formal and informal networks to accelerate results.

Describe the key characteristics of the successful supply chain leader of the future. “Compassionate leadership, emotional intelligence and the ability to drive and support innovation will continue to be key characteristics of a successful supply chain leader,” says Tokash. “The ability to empower others, encourage innovative thinking and coach teams to embrace change are important to continue driving healthcare forward and for developing the leaders of the future.”

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The Difference Between Price And Cost A Value-Driven Approach To Evaluating Service Providers

Purchased services can account for up to 50% of a healthcare organization’s non-labor spend. They can include services such as clinical, facilities, corporate services, equipment maintenance, IT and administrative. Two of these categories – clinical and equipment maintenance – have a direct impact on patient care delivery. So, why is it so important to know the difference between the upfront price and true cost of these purchased services? Knowing that, as well

as the benefits of a price-cost focused analysis can make a big difference to an organization’s overall bottom line. Swarna Alcorn, vice president of service for Olympus Corp. of the Americas, says an upfront price-only strategy may negatively impact total budget spends when organizations choose purchased service contracts. She says an organization should understand the difference between purchase price and total cost in equipment service contracts and use best practices in demonstrating criteria to evaluate equipment service contract providers. The three tenets – efficiency, quality and risk management – that lead to a value-driven, price-cost decision should always be followed versus a price-only strategy when choosing service contracts supporting medical equipment spend.

December 2019 | The Journal of Healthcare Contracting

same weight as any upfront price savings. Having a high uptime means The Journal of Healthcare Contracting: How that both staff and patients will feel more satisfied – staff because they are does a price-only strategy limit decisionable to provide uninterrupted care, and patients because they do not have making in choosing purchased service to further adjust their schedules to compensate for a delay in procedure contracts to support medical equipment? start time, or even more impacting, a reschedule of their procedure due to Swarna Alcorn: When purchase price alone equipment being unavailable. is the determining factor in evaluating service From a financial standpoint, feeling confident in the uptime a vendor contracts, an organization may be at risk for a can deliver also provides more confidence in knowing that unanticipated negative downstream experience in the form overtime for staff will be curtailed and reimbursements and revenues of clinician satisfaction, patient satisfaction and will flow as expected. If cases are happening on schedule, reimbursetimely capture of reimbursement and revenue. ments will flow on schedule. The better alternative it to not only evaluate on purchase price alone, but instead to factor in toThe Journal of Healthcare Contracting: How does a price-cost tal cost. In this way, the decision of which venanalysis make a difference to the overall bottom line for purdor to go with should include consideration for chased services? the downstream implications of the experience Alcorn: To be complete, a bottom-line analysis for purchased services that the vendor you choose will deliver to your should include data from across the continuum of care, and not just at the clinicians, and ultimately the patients you serve. point of sale. The economic value that a medical equipment service proWhen clinicians are preparing for a day of vider delivers should not be solely measured through an upfront purchase patient cases, they need to know the equipprice analysis, but instead through a more comprehensive uptime analysis. ment they need is available for use so that they Doing such an analysis will create the level of transparency needed to subcan provide patient care without unnecessary stantiate the level of value the vendor has delivered to your organization. interruption. Equipment service providers play a pivotal role in ensuring that this happens, and as part of their proposals, should be creating asFrom a financial standpoint, feeling surance that they will support your confident in the uptime a vendor can end users’ needs to have equipdeliver also provides more confidence in ment ready to go. We call this “uptime,” or the knowing that unanticipated overtime for percentage of working days a destaff will be curtailed and reimbursements partment’s equipment is available and revenues will flow as expected. for use. In evaluating equipment service providers, a key criterion to focus on is the average uptime that To start, ask your current vendor what uptime they have delivered to the vendor will be able to provide you. Seeyou for the past 12 months. If the vendor is unable to provide this inforing that number, and being able to compare it mation, that is an indicator to assess on its own merit. If they can provide amongst potential vendors, will provide a betthis information, the next data point needed is the economic value of ter understanding of which provider can help what each percentage point of uptime is worth to your organization. On to ensure that patient cases are not delayed due the top line, this is a calculation of what it means to capture reimburseto equipment being down or unavailable. ment revenue in a timely manner. On the bottom line, this is the additional If patient cases are delayed due to equipcalculation of being able to manage costs, like staff overtime, in a meament being down and unavailable for use, a sigsured manner. Vendors should be able to provide this layer of detail as nificant cost is placed on the unit’s efficiency, well through a collaborative discussion about the number of equipment and this cost should be considered with the

The Journal of Healthcare Contracting | December 2019

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in your unit, the number of procedures per day, average labor costs and average reimbursement per procedure. To think about uptime in terms of financial metrics, consider, for example, the difference between having equipment available to cover caseload 20 days out of the month versus 17. Based on the calculations I have seen, even a few days of downtime can have noticeable impact on a unit’s financials. If comparing vendors, the uptime criterion is an important measure in determining what level of value each provider can deliver. As a general rule, look for an uptime number in the mid to high 90s. If a vendor you are considering has not provided service to you before, and can therefore not provide a specific uptime that they’ve delivered to your organization, ask them what the average uptime they deliver nationally is.

Two audiences that we see becoming more involved with vetting equipment service providers are infection prevention and risk management. Including these team members in the decision-making process is an important way of mitigating the unknown of hidden costs that can result from poor patient outcomes.

The Journal of Healthcare Contracting: Which team members are required in a valuable cross-functional, decision-making process and why are their roles important for success? Alcorn: Choosing an equipment service provider is an important decision, and one that should undergo the same rigor as the precipitating capital equipment investment. To ensure the decision is reviewed and informed holistically, it’s beneficial to bring a cross-functional team to the table, with representation from the following departments: • Supply Chain • Clinical • Clinical Engineering/Biomed • Finance • Infection Prevention • Risk Management Each of these functions will have a different perspective and focus area, and combined, their input will help to inform an equipment service provider selection that will serve all interests of your organization. Supply chain and finance, for example, will have a financial orientation to their decision making, while the clinical representatives will be primarily concerned about the end user experience – everything from repair quality and turnaround time to access to educational resources

and availability of loaners. Clinical engineering will have focus on things like value for money, the support a vendor can provide in maintaining accurate inventory lists and access to technical assistance centers and remote troubleshooting support. Two audiences that we see becoming more involved with vetting equipment service providers are infection prevention and risk management. Including these team members in the decision-making process is an important way of mitigating the unknown of hidden costs that can result from poor patient outcomes. Both infection prevention and risk management are looking at ways to minimize risk exposure for patients, staff and the broader organization. For these audiences, the vendor’s quality measures will be most important, as will ensuring that the vendor is performing equipment repairs with OEM parts and OEM protocol. There will also be a key focus on validating that the vendor is able to assure that the equipment can be properly cleaned or reprocessed post repair. In understanding the pertinent areas for each member of the vetting team, the organization is ensuring the most optimal experience in the care and use of the equipment being covered. The decision to select an equipment service provider is much more than comparing two quotes; instead, it is a decision that requires a holistic approach to review a variety of key performance and key quality indicators.

For more of Alcorn’s price-cost decision analysis and the tenets that set it apart from price-only decision making, go to JHC Online at www.jhconline.com/the-difference-between-price-and-cost.html.

December 2019 | The Journal of Healthcare Contracting

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MODEL OF THE FUTURE

By Graham Garrison

Leading the Charge

to implement.’ And then kind of go forth. So, in these kinds of situations, I do end up acting like a program manager in a lot of ways.”

Novant Health’s supply chain team has adopted a hybrid model to support its non-acute facilities.

Driven

In many ways, Tyler Ross says his role as director of supply chain operations at Novant Health can feel like being an air traffic controller. There’s the supply chain goal of landing a new product or service onto the health system’s runway. Added to that task is input and feedback on the clinician side – which can range from surgeons to specialists to primary care physicians across countless sites. And, there’s the vendor itself to bring into the fold. Ross says he tries to act as a conduit to guide the discussion between all the stakeholders and his sourcing team. “I say, ‘Here’s where we see an opportunity, here’s where we would like to drive value, and here’s how we’d like

Ross started in supply chain 10 years ago while serving as an officer in the U.S. Marine Corps. He said he was fortunate to be given the opportunity to become a logistics officer, which dictated his career path while in the Marines. “I spent five years there,” he says. “I really enjoyed the concept of providing logistics support to disparate locations across what we would call

December 2019 | The Journal of Healthcare Contracting

the battle space – across large areas of territory – and thought it was an interesting challenge and something that I wanted to continue to pursue as a civilian.” After Ross was honorably discharged from the Marines, he joined Novant Health in Wilmington, N.C., as a supply chain manager at one of Novant Health’s facilities. Ross was promoted a few years ago to his current role, with a focus of looking at Novant Health and how it is growing into the non-acute space at a rapid pace. He says he enjoys the challenge non-acute presents, as well as the fulfillment and satisfaction gained from knowing everything is directed towards patient satisfaction and patient care. “That’s really been what has driven me to this specific niche within healthcare supply chain,” Ross says.

Talking about the basics Novant Health has 15 hospitals in its system, 600-plus clinics and 12 outpatient surgery centers throughout four states including Virginia, North Carolina, South Carolina and Georgia. It approaches anything outside of the standard acute care and medical center setting as what it considers non-acute. “So that entails a culture change in supply chain for us from how we view distribution efficiency and how we’ve used supply chain support,” Ross says. Traditionally, healthcare supply chain focused on bulk ordering and bulk logistics processes going from a central distribution center or distributor to the loading dock of a large facility. Now, the conversation is about low volume and high density across a large footprint. It’s a relatively new logistics challenge in this scale for healthcare, Ross explains. “Especially when you talk about a systematized approach where you have not only individual doctors’ offices, but now a system

The Journal of Healthcare Contracting | December 2019

approach for the larger healthcare systems of integrated non-acute locations,” Ross says. All of that screams complexity. Along with a Consolidated Service Center for its acute care needs, Novant Health formed a non-acute specific team in January 2018 with Ross as its head. “I’ve been the head of the team since we started, and I have a very small but robust team. We’re still proving the concept of non-acute supply chain. We’re trying to lead that charge in healthcare in the United States,” Ross says. Ross’ team started by focusing on the clinic level with Novant Health’s end users. “For folks in the clinic, nobody does supply chain purchasing or procurement as their sole function at that location,” he says. The responsibility usually went to a nurse whose second or third collateral duty of the day was to order supplies. Ross and his team approached the discussion as “Supply Chain 101” about the basics. “Let’s talk about how you’re organized in your space. Are you labeling? Are you ordering? Do you have basic par levels?” Ross asks. The initiative has since grown into what Ross calls “Supply Chain 201” about supply chain as an integrated entity with multiple chains and channels, and how one location’s actions can affect the others positively or negatively. “We’ve taken this complex challenge of supplying 600-plus clinics and enabling our end users to be supply chain professionals from a crawl, walk, run model to more conceptual theoretical concepts. At the end of the day, we just want to make sure that means that the understanding between the clinics and our supply chain department remains focused on patient care and cost avoidance,” Ross says.

An enabler to better outcomes Novant Health does a good job of clinical integration in decision making, especially with large-scale projects or initiatives for products or tests that they may want to introduce, according to Ross. The sourcing team involves doctors, nurses and clinical team members from initiation to adoption to implementation. “Novant Health’s sourcing team does a fantastic job of aligning with their respective clinical leaders for their different categories and allowing them to help drive the conversation,” Ross says. “We’ll ask, ‘What would be beneficial to you and your patients?’ We as a sourcing supply chain team will do our best to find the appropriate vendor to fill that need.” “Clinical integration is incredibly key, because then when we’re making decisions and writing contracts with suppliers or manufacturers, we have that warm and fuzzy feeling that this has been looked at and blessed by the folks who will be laying hands on patients,” Ross says. “So, I think we are a direct enabler to better outcomes.”

MODEL OF THE FUTURE

A recent example of this collaboration involved bringing new lab testing to Novant Health. They used a phased approach to move to molecular lab testing for flu, strep and RSV. The results have been positive. “This is a conversation that would have been very tough for us to have if we didn’t have a dedicated team to focus on non-acute supply chain,” Ross says. Previously, they used disposable flu, RSV and strep tests with inexpensive costs and price points. “But as we know in the lab world, molecular testing really is the cutting edge of technology,” Ross says. While the new lab testing comes with better outcomes, higher accuracy, quicker turnaround times and can be performed in-clinic, there were other factors to consider, such as a higher cost of disposables and equipment purchases. “It’s really that discussion between ‘Yes, it’s going to be higher up front, but here’s why it’s worth it,’ and ‘Here’s how our reimbursement makes up that difference and actually provides it a profit or some revenue off of that in the long run.’”

The entire process to bring in the molecular lab testing was challenging, and in many ways a learning experience. In the non-acute space there’s so much complexity, according to Ross. Having a supply chain team drive that discussion helped in the adoption at the clinic level more than it could have two or three years ago. More than half of Novant Health’s clinics have now adopted the molecular lab testing as they phase out the disposables. “We do anticipate by the end of this year, as we’re in the throes of flu season right now, to be completely phased in with our molecular flu testing,” Ross says. “I really try to represent all sides of the discussion,” he says. “McKesson, who is our primary lab distributor from a soft-goods and test perspective side, has been fantastic to work with. I think they bring a lot of value, especially to the lab space.” The entire process to bring in the molecular lab testing was challenging, and in many ways a learning experience. In the non-acute space there’s so much complexity, according to Ross. It’s not just from a logistic supply chain perspective, but also from a clinical perspective and how many different specialties are represented.

“I really learned how much I didn’t know, especially in the lab space,” he says. “But I think that like any healthcare professional, you’re trying to learn and understand what your patients need and what your clinical team members would appreciate.”

Bringing in – and saving – revenue Supply chain has a unique position within an IDN to not only affect cost savings but to create revenue streams with innovative ideas. For instance, Ross likes the idea of potentially moving retail products to the clinic, especially durable medical equipment. Even things like soft casting or crutches could drive revenue from the clinic level that could benefit a system. More patient interactions occur in the non-acute space. “I think it’s an opportunity to not only provide value to the patient as a one-stop shop, but also provide value to the organization that’s potentially introducing a retail setup,” Ross says. It’s a concept Novant Health is still evaluating and looking for good benchmarking on as well as ROI potential. Plus, even though it’s considered non-revenue, simply putting money back into the system is still a big deal for supply chain teams. “Last year, just by improving supply chain efficiencies at the clinic level with basic things like ordering on a set schedule, treating a clinic as if it were our own pantry and not having too much stuff on hand, we were actually able to help avoid over $1 million of potential spend across our medical group last year,” Ross says. “Although technically not revenue generation, giving money back to the organization is almost as important when we look at a multibillion-dollar industry.” Listen to the entire conversation with Tyler Ross by downloading the Strategies for Success podcast at www.jhconline.com/ podcast-delivering-excellence-for-the-nonacute-continuum.html.

December 2019 | The Journal of Healthcare Contracting

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Room for one more? Are non-acute providers ready for one more e-commerce marketplace for healthcare and business supplies? Do med/surg distributors need another sales outlet? Premier is betting ‘Yes.’

Concordance Healthcare Solutions

On Oct. 21, Charlotte, North Carolina-based Premier announced it had launched its own e-commerce offering – called stockd.™, designed to meet the needs of small- to medium-sized, non-acute healthcare businesses, including physician practices. Premier is convinced there’s a need for an alternative e-commerce platform, and executives believe the company’s history in the healthcare supply chain makes Premier well-suited to provide it. “As an example of the needs raised by our members, Each stockd. nearly four out of 10 alternate-site purchasers told us that they utilize six online platforms or more for their seller has its business purchasing each month,” John Sganga, Preown shipping mier’s senior vice president of alternate site programs, policies, which told Share Moving Media in an email. “Going back and are explained forth between so many online platforms takes signifion its brand cant resources and time out of providers’ schedules to page on order supplies, compare pricing and manage inventory. stockd.com. “Taken as a whole, their responses alluded to a hole in the marketplace for a single, trusted online platform with transparent pricing from which alternate-site buyers could directly purchase healthcare and business supplies.” Stockd. is separate from Premier’s GPO, said Sganga. “The platform is public-facing and open to anyone – regardless of business or GPO affiliation.” Nor do sellers have to be Premier-contracted suppliers. Each stockd. seller has its own shipping policies, which are explained on its brand page on stockd.com. Stockd. users have access to med/surg, pharmaceutical, lab and physical therapy products and supplies; office supplies; food/beverage products; building maintenance and more. Among 32 vendors listed on its website (as of Nov. 1) as “Marketplace Sellers” are Concordance Healthcare Solutions, Brewer Company, Schiller Americas, Brandt Industries and Office Depot. Users can register as stockd. members at no cost, granting them access to more favorable pricing and additional marketplace features, such as tax-exemption for qualifying organizations and the option for validated physicians to purchase prescriptive medical devices. For IDN supply chain executives concerned about rogue purchasing, stockd. offers the customer the ability to have multiple representatives registered to purchase

on behalf of the organization, “which helps ensure alignment across the supply chain about what’s being ordered, by whom and how often,” Sganga said.

“The model intrigued us for many reasons,” said Dave Myers, president and chief operating officer of Concordance Healthcare Solutions, in an email. “We concluded that the stockd. solution would be a powerful complementary channel strategy for us and our supplier partners. “Concordance’s existing e-commerce portfolio is more designed to support existing customers or those gained through a more outside-in marketing effort – our feet on the street or telesales,” he continues. “We are continuing to develop better ‘inbound’ marketing solutions, tying in social and direct marketing with our e-commerce site, but our use of alternative channels had been limited.” For its stockd. offerings, Concordance will focus on its exclusive brand – DYAD – as well as Premier’s branded product line, PremierPro™, said Myers. Concordance will also offer stockd. users access to branded-supplier partners “who want to leverage our logistics services to support their position on stockd.” “Stockd. has a healthcare foundation that can support multiple industries and consumer markets,” Myers said. “I think they put some really good thinking into their positioning strategy, but like anything new, time will tell. Execution is key. Competitive pricing is key – for the buyers and suppliers. “This model does have strong potential to succeed, in my opinion.”

December 2019 | The Journal of Healthcare Contracting

PEOPLE

“Each GPO is unique in what they are offering to their membership,” says Les Friend, Executive Director, Enterprise Team, for KARL STORZ Endoscopy-America, Inc. “Likewise, IDNs or enterprise health systems have varying needs based on their GPO relationships. The value of the relationship must be based on aligned business goals and objectives, and these do not always focus on price. “The for-profits, critical-access facilities, academic medical centers, children’s hospitals, not-for-profit health systems, along with the Veterans Health Administration and Department of Defense Healthcare, all have very specific criteria that they define and adhere to.” It’s a challenge, but one that Friend embraces. For his efforts, he recently received the first National Account Executive Lifetime Achievement Award from the Association of National Account Executives. Friend’s professional roots lie on the provider side.

Les Friend

Les Friend: Staying in touch

The nuclear option

National accounts award-winner says clear communication not only leads to trust, but successful contracts

Supply chain executives know how difficult it can be to gain consensus among their many constituents around a contract. But think about the task of the national accounts director, that is, the person or team on the supplier side.

He got a degree in nuclear medicine from Triton College in River Grove, Illinois, a western suburb of Chicago. He served as a nuclear medicine technologist at Loyola University Medical Center for seven years after that. “I was intrigued with healthcare and science,” he says. “Radiology was interesting, but the ability to make radioactive materials, administer to patients and to safely be able to image the functioning and structure of the human body, hit everything that I

December 2019 | The Journal of Healthcare Contracting

“Not having routine business reviews, which help assess each other’s performance, and not bringing new ideas or opportunities to further improve the business relationship can jeopardize the contract.” was interested in. Being at Loyola University, doing some of the most cutting edge procedures and having the ability to do research and advanced image processing techniques, was a hit.” At Loyola, Friend found himself assisting many of the institution’s suppliers with site visits and, at times, aiding in the testing of new technologies. Siemens offered him a position to join its sales team as a nuclear product specialist supporting computer sales, positron emission tomography scanners and medical cyclotrons. In that role, he marketed and sold diagnostic imaging products to acute care facilities, outpatient diagnostic imaging centers, mobile imaging services, Veterans Health and DOD facilities. Les held a variety of roles at Siemens during his tenure and ultimately was named the Zone General Manager in the Southeast. In 2011, he moved from Atlanta to California to lead the corporate accounts team of Toshiba America Medical Systems. “I looked forward to getting back into the strategic role of corporate accounts and the impact it can have on a business,” he says. “The experience was rewarding, and having worked for one technology-focused healthcare company, to now working for another, made for an exciting challenge to build on past successes and expand on new ideas.”

The Journal of Healthcare Contracting | December 2019

In 2015, he joined KARL STORZ Endoscopy-America, Inc. as Executive Director for national accounts.

On the same wavelength Contracts work only if the buyer and seller agree on the customer’s short- and long-term goals and needs, along with the criteria that both will use to hold each other accountable, says Friend. Contracts fail to work if either party refuses or is unable to adapt to newly agreed-upon objectives and/or behaviors. “Not having routine business reviews, which help assess each other’s performance, and not bringing new ideas or opportunities to further improve the business relationship can jeopardize the contract,” he says. “The inability to trust each other and the teams on both sides can be a source of challenge. As health systems continue to grow in size and complexity, then so must the performance of strategically aligned suppliers to the health system.” So too must the quality and frequency of communication between both parties. “The health system has many teams and at times, many locations that will use the solutions that have been contracted for,” says Friend. “This can be in the hospital, offices and home health, amongst other areas. Likewise, the supplier may have account managers and field service personnel covering one facility, and this expands as you go to the enterprise level. “So a clear communication must be delivered by both sides of the contract, and routine communication must continue in order to maintain everyone’s expectations. The governance of a strategic aligned relationship must be the capstone for the agreement’s success and not its failure.” Les and his wife, Pam, live in Signal Hill, California. Their daughter is a classically educated vocal artist, and their son is a cryptologist and chief petty officer in the U.S. Navy.

HHS

Will today’s ‘kickback’ be tomorrow’s ‘valuebased arrangement?’ Proposed rules from HHS could change what’s accepted and what’s not in today’s expanding continuum of care

On October 9, the U.S. Department of Health and Human Services released proposed rules that would revamp parts of the AntiKickback Statute and Stark Law. The proposed rules are intended to protect against overutilization of medical services while giving physicians and other healthcare providers flexibility to coordinate care for patients. And they are intended to protect outcomesbased payment arrangements that reward improvements in patient health.

Terry Chang

Much of the rules are directed at providers and what they can or cannot do to coordinate care. But medical products manufacturers, distributors and providers might be affected too, particularly as digital and connected technologies become a standard part of their repertoire. HHS is seeking comments on what role – if any – suppliers should play in value-based arrangements. The agency has reservations. “We are concerned … and solicit public comments about the risk that some companies that manufacture medical devices covered by Federal health care programs, particularly implantable devices used in a hospital or ambulatory surgical center setting, might misuse value-based arrangements to disguise improper payments for care coordination intended as kickbacks to purchase the medical devices they manufacture,” HHS writes. But HHS raises questions about how the term “device manufacturer” should be defined. Does it include digital tech companies? How about companies that offer traditional

December 2019 | The Journal of Healthcare Contracting

devices as well as software? The answers they ultimately arrive at will affect the supply chain. Share Moving Media – publisher of the Journal of Healthcare Contracting – asked AdvaMed, the Washington, D.C.-based association for medical manufacturers, to comment on the proposed rules and their potential importance to suppliers. Terry Chang, M.D., vice president, assistant general counsel, director, legal and medical affairs, responded in writing. The Journal of Healthcare Contracting: The proposed rules issued by the HHS Office of Inspector General (OIG) include a discussion about how to define “device manufacturers.” What’s the issue? Terry Chang M.D.: In sum, the discussion by the OIG about defining “device manufacturer” is about two issues: 1) the perceived risk of abuse and 2) the role and value of device manufacturers in care coordination and management. More specifically, OIG seeks input on whether there is a way to exclude manufacturers of traditional medical devices (e.g., implants) from final rule safe harbor protections, while preserving the inclusion of manufacturers of medical technologies that have an obvious and promising role in care coordination and management, through the way that “device manufacturer” is defined for the purposes of exclusion. References to remote patient monitoring, mobile health and digital technologies make it clear that such technologies are very much included (see Section III.B.5.b. Health Technology Companies). OIG is considering excluding all device manufacturers from safe harbor protection based on 1) historic enforcement experience with manufacturers of implantable devices in fee-for-product arrangements (assuming an increased risk of abuse that would not be safeguarded against in the proposed frameworks)

The Journal of Healthcare Contracting | December 2019

and 2) the assumption that “traditional device manufacturers” would not have a role in care coordination and management. However, today’s medtech companies don’t just produce devices and diagnostics that save and improve lives. They provide solutions that comprise a range of products and services to improve care coordination and management, and patient outcomes. They are true partners working to diagnose, treat and manage disease, as well as share accountability for achieving better outcomes and managing costs. HHS’s proposed antikickback-statute changes in particular would help make that happen.

We want to modernize the Safe Harbors to enable manufacturer engagement in more comprehensive, patient-centric VBAs, in a simpler, less time consuming, and less costly fashion. The preamble in particular recognized that some manufacturers of traditional medical devices also manufacture care-coordinating type “health technologies.” However, there did not appear to be an appreciation for the substantial overlap that exists. Many manufacturers of DMEPOS [durable medical equipment, prosthetics, orthotics or supplies] and “traditional medical devices” also manufacture “health technologies” that are valued for their capabilities and promise to advance the coordination and management of care, improving clinical outcomes, and reduce costs. The Journal of Healthcare Contracting: As things stand today, are manufacturers barred from entering into arrangements with providers in which the manufacturer can be rewarded for improved outcomes associated with its device or equipment? Chang: As things stand today, manufacturers are deterred from entering into value-based arrangements (centered around achieving a clinical and/or economic outcome target) due to the risk, time and cost associated with developing value-based arrangements (VBAs) to fit within today’s volume-based guardrails. We want to modernize the Safe Harbors to enable manufacturer engagement in more comprehensive, patientcentric VBAs, in a simpler, less time consuming, and less costly fashion. The federal Anti-Kickback Statute (AKS) is exceptionally broad and criminalizes offering or providing anything of value to induce or reward the utilization of any item or service covered in part by a federal health care program. The enormous breadth of this prohibition

HHS

understandably left providers and suppliers uncertain about the applicability of the statute, and in order to address this confusion, Congress amended the statute in 1987 to mandate OIG’s promulgation of regulatory safe harbors (Safe Harbors). The 28 safe harbors created to date were designed with volume-based guardrails for a fee-for-service and fee-for-item payment framework. Aspects of VBAs at tension with the AKS include: 1) The protection for the bundled infrastructure and services needed to develop and bundles is limited operationalize a VBA (data – the federally collection, tracking, analysis, reimbursable items reporting); 2) the bundled serand services subject vices and technology that are part of the solution to achieve to the warranty must the targeted outcome; and 3) be reimbursed by the elements of outcomes-based same Federal health pricing, risk-sharing, and warranties. (E.g., rebates, perforcare program and mance payments, penalty within the same Federal holds, and underperformance health care payments can be considered program payment. to have value that induces or rewards referrals or utilization of an item or service covered in part by a federal health care program.) The Journal of Healthcare Contracting: HHS suggests it might change existing safe harbors for warranties. What is the issue? Chang: Previously, the Warranties Safe Harbor only applied to a warranty on single items against product failure. The modified warranties safe harbor in the proposed rule expands the protection to cover more than one item and also cover related services bundled with an item or items against a warranted clinical or cost outcome. The protection for bundles is limited – the federally reimbursable items and services subject to the warranty must be reimbursed by the same Federal health care program and in the same Federal health care program payment. Another important limitation is that the warranty remedy is capped at the cost of the items and services under the warranty. Lastly, this safe harbor only protects services when they are bundled to an item (i.e., there is no coverage for standalone services). The discussion regarding potential future rulemaking on additional modifications to the warranties safe harbor is about another potential way that OIG may address purchase/sale arrangements for covered

items and services, which are not addressed in this set of proposed rules. For example, through additional modifications, the warranties safe harbor could also protect outcomesbased pricing arrangements, where the net price is determined by the actual outcome relative to the targeted outcome. The Journal of Healthcare Contracting: Simply put: What would the proposed changes – if incorporated into the final rule – allow manufacturers to do that they cannot do today? Chang: We are still exploring the implications of the language in the proposed rule. The topline change is that potential avenues for device manufacturer engagement in value-based arrangements would be opened. In addition to providing the framework to contribute to value-based care, utilizing protected arrangements would remove deterrents to VBAs. Again, today’s medtech companies don’t just produce devices and diagnostics that save and improve lives, they provide solutions that comprise a range of products and services to improve care coordination and management, and patient outcomes. The Journal of Healthcare Contracting: What does AdvaMed think the final rule should allow manufacturers to do that the proposed changes do not address? Chang: We are still studying the implications of the proposed rule and do not have a complete assessment of the limitations in the protections provided in the proposed rule relative to AdvaMed’s proposals. Ideally, the final rule would protect the same scope of arrangements covered under the AdvaMed proposals, including value-based pricing arrangements, to enable outcomes-based pricing of items and services (i.e., protecting arrangements that provide for price adjustments based on the achievement of a pre-identified, measurable clinical or cost outcome targets).

December 2019 | The Journal of Healthcare Contracting

Send all upcoming events to Daniel Beaird, managing editor, at dbeaird@sharemovingmedia.com

CALENDAR

Association for Health Care Resource & Materials Management (AHRMM) AHRMM20 Conference and Exhibition July 26-29, 2020 Austin, Texas

IDN Summit Spring IDN Summit & Reverse Expo April 27-29, 2020 Omni Orlando Resort at ChampionsGate Orlando, Fla.

Federation of American Hospitals

Fall IDN Summit & Reverse Expo

2020 Public Policy Conference & Business Exposition March 1-3, 2020 Marriott Wardman Hotel, Washington, D.C.

August 24-26, 2020 JW Marriott Desert Ridge Resort and Spa Phoenix, Ariz.

Spring IDN Summit & Reverse Expo GHX Supply Chain Summit April 27-29, 2020 Gaylord National National Harbor, Md.

April 12-14, 2021 Omni Orlando Resort at ChampionsGate Orlando, Fla.

Health Connect Partners

Intalere

Hospital Supply Chain Conference March 16-18, 2020 New Orleans, La.

Elevate 2019 May 11-13, 2020 Gaylord Opryland Resort & Convention Center

Spring â&#x20AC;&#x2122;20 Hospital Supply Chain Conference March 16-18, 2020 New Orleans, La.

Nashville, Tenn.

Premier Health Industry Distributorâ&#x20AC;&#x2122;s Association (HIDA)

Breakthroughs Conference

Supply Chain Visibility Conference February 5-6, 2020 Hyatt Regency Coral Gables, Fla.

June 23-26, 2020

The Journal of Healthcare Contracting | December 2019

Gaylord Opryland Resort & Convention Center Nashville, Tenn.

By Elizabeth Hilla, HIDA

HIDA PRIME VENDOR:

Getting the Most from Your Most Important Supplier

Collaborate with your distributor to ensure pricing accuracy 48

As a supply chain leader, you spend many hours finding the best contracts, tiers and prices for the products you purchase. So, it’s frustrating when you get an invoice and find that a price is incorrect. Maybe your organization didn’t get assigned to the right tier, or maybe it’s still the old pricing even though a new deal has been inked. You or your team then spend more hours investigating the error, contacting the supplier and getting the problem fixed. Whew.

December 2019 | The Journal of Healthcare Contracting

Distributors find these problems equally frustrating. After all, their customers trust them to make sure the pricing on their invoices is correct – and blame them when errors occur (even if it’s a last-minute price change or even a one-off write-in change to a contract requirement). To ensure pricing accuracy, both suppliers and providers must invest in a wellcoordinated contract administration process – a resource-intensive investment that sucks up resources from other supply chain priorities. That’s why my organization, along with leaders from manufacturers, GPOs and health systems, has been working on issues related to contract administration and pricing accuracy for many years. We believe that price synchronization – meaning that all trading partners including the manufacturer, GPO, distributor and provider agree on what the price should be for a product going to a specific customer – is built on three critical pillars.

Pillar 1: Automation Automation means that computers can talk to computers so that everyone’s systems agree. Manual work leads to mistakes and mismatches. Using already available standards like EDI 832 help alleviate this manual entry. Automation requires adoption of standard business processes. When trading partners do things in non-standard ways – for instance, adding complicated, non-automatable terms to a contract – errors are likely.

Pillar 2: Data standards Automation is easier when computers (and their users) speak a common language through data standards including location identifiers (specifically, HINs, DEAs and GLNs) and product identifiers (such as those addressed via UDI adoption). Without broad adoption of such identifiers, the industry depends on complicated cross-reference files to match the provider’s

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location or product number to the supplier’s numbering system. These systems are time-consuming to maintain, add costs, and increase the opportunities for errors.

Pillar 3: Timing All trading partners must agree on the contract effective date to ensure price matching. The effective date should allow enough time for all systems to be updated with the new pricing. In the absence of full automation and data standards (see pillars 1 and 2), the industry standard is that distributors receive 45 days’ notice of pricing changes prior to the effective date, to allow them to notify their customers and all parties to update their systems. Retroactive pricing almost guarantees price mismatches and rework. Managing and sticking to sourcing calendars will greatly mitigate the risk of an eleventh-hour price load need. Another critical factor is communication. Organizations Without broad adoption that achieve strong pricing accuracy metrics typically work of such identifiers, the very closely with their distribuindustry depends on tor partners on all aspects of complicated crosscontract price administration. I encourage you to visit reference files to match the provider’s location HIDA.org/ContractAdmin to access the Improving Pricing or product number Accuracy white paper, which offers best-practice recomto the supplier’s mendations around these three numbering system. pillars – automation, standards These systems are and timeliness. While the publication primarily focuses on time-consuming to ways distributors, manufacturmaintain, add costs, ers and GPOs can enhance and increase the contract performance and opportunities for errors. streamline overall stakeholder communications, providers can also benefit from learning more about what our industry is doing to solve this challenging problem. To better understand the challenges of pricing accuracy across the supply chain, I invite you to participate in the Healthcare Supply Chain Collaborative’s Contract Administration Conference on Feb. 4-5, 2020, in Miami, Florida. Participants will share case studies demonstrating ways to improve pricing accuracy and help develop additional best practices to recommend to the industry.

SUPPLY CHAIN

Providers tell suppliers how it is Issues on the table at HIDA Streamlining Healthcare

What’s top of mind for providers is often top of mind for their distributors too. What if the two achieved some peace of mind together? Providers appear to be open to the idea, especially as health systems expand and become more complex to manage. That much was evident during two panel discussions at the HIDA Streamlining Healthcare Expo & Business Exchange in Chicago, IL, this fall. (HIDA is the Health Industry Distributors Association.) The first, “Improving distribution and logistics in health systems,” featured: • Mark Campbell, vice president, supply chain, Tampa General Hospital • Mike Hopkins, vice president, supply chain distribution and logistics, Northwestern Memorial Health Care • Josh Andrade, director, supply chain shared services, HonorHealth • Brian Zuck, vice president, supply chain, Essentia Health

The second, “Innovative strategies for managing the non-acute supply chain,” featured: • Jevon Hawkins, regional director, supply chain, Wellspan Health • Jean Llewellyn, director, supply chain management, non-acute, MedStar Health • Darrick Adams, director non-acute supply chain, AdventHealth • Callie Klump, senior director supply chain logistics, Texas Health Resources Some key takeaways for distributors and providers. 1. Standardization of product and processes is a big – HUGE – challenge for supply chain executives as their health systems acquire hospitals, physician practices and other

December 2019 | The Journal of Healthcare Contracting

non-acute care sites. Some supply chain executives rely on their GPO for help in this area, others look to their distributor to help lead the charge, particularly among non-acute-care sites. One supply chain executive at the conference recounted assembling 12 physician groups in a locked room for three days of uninterrupted, heart-to-heart talk about standardizing. 2. Direct-ship manufacturers aren’t helping matters. One supply chain executive half-joked that he’s considering charging rent to direct-ship manufacturers whose consigned implants clog valuable space in the hospital. Distributors might help by serving as a 3PL for direct-ship manufacturers – though that’s easier said than done. 3. Keeping tabs on purchasers in 400, 500 or 600 clinics isn’t easy. Given the turnover of support staff in physician offices and clinics, supply chain VPs continually struggle with educating new hires on the ordering process, formulary management and inventory control. 4. Physicians are getting it but they’re not quite there yet. Physicians still enjoy the freedom to choose what they think is best for their patients. Supply chain has to respond with data about outcomes and cost-per-case. And though it’s true that physicians are more tuned in to cost than ever before, they still believe that if the hospital charges for something, they get paid for it. “We do not,” said one supply chain executive. 5. Customer service is just as important to supply chain executives as it is for distributors – and just as difficult. As health systems expand, so too does the

The Journal of Healthcare Contracting | December 2019

number of clinical customers calling up supply chain about the status of an order or the reason for a substitution. The supply chain director’s task is made tougher given the rapid turnover of staff in their department. How do you train people to greet callers courteously, respond openly to questions, and resolve issues – instead of kicking them down the road? 6. From purchasing to utilization to demand planning. Health systems have a pretty good handle on what they buy, but they want to reach the next step. Using technology, they want information on what they use, who’s using it, and how much it costs per case. Some are willing to work with their distributor in gathering and analyzing that kind of data. 7. Cost-per-whatever. Health system supply chain executives are getting pushed by senior management to improve cost per unit of service, be that creation of a purchase order or a knee arthroplasty. One hitch: EMRs weren’t built with cost-per-case in mind. 8. RFID is definitely worth a look. RFID technology helps providers first, to know where valuable assets are in real time, second, to reduce labor costs associated with tracking them down, and third, to avoid spending money on redundant items. 9. Mr. or Ms. Robot. Expect hospitals to pilot-test robots delivering food service and even medical and surgical supplies to nursing units. 10. Non-acute has traditionally been the stepchild of supply chain management for healthcare providers – and in a sense, it still is. One executive spoke of a “team of one” overseeing nonacute purchasing and distribution. That said, non-acute focused supply chain executives depend on support from their acute care contracting colleagues and senior management. 11. Get the word out, even if it’s unpleasant. Supply chain executives with non-acute responsibilities know the value of good communication with distributors and clinicians, and the price of poor communication. It’s especially important to keep the lines open when it comes to informing hundreds of offsite facilities about backorders, conversions and substitutions. 12. What is the secret sauce of a great relationship between distributor and non-acute supply chain vice president? Simple, trust.

NEWS

Contracting News Premier Inc. forms Contigo Health Premier Inc. (Charlotte, NC) announced it has formed Contigo Health, a new organization focused on optimizing care through clinically led partnerships with large, national employers and their health plans. Contigo Health is designed to be a clinically driven network of health systems collaborating with employers and their health plans to deliver the best care possible for their employees. Contigo Health plans to launch pilot programs with employers by partnering with health systems in select markets to eliminate unwarranted variation in care delivery. The goal is to avoid unnecessary invasive treatments and focus on delivering the most appropriate care to improve quality and reduce costs. A group of 35 leading health systems, representing more than 440 hospitals, have already signed letters of intent to participate in Contigo Health’s provider network. Contigo Health is also working with several large national employer partners, which it expects to announce in the coming months. Jonathan R. Slotkin, MD, will serve as Contigo Health’s chief medical officer to lead its clinical innovation, strategy and operations, while continuing to care for patients as a neurosurgeon at Geisinger.

Virginia Tech to establish a pediatric biomedical research lab at Children’s National Hospital Virginia Tech will establish a pediatric biomedical research lab on the new innovation campus at Children’s National Hospital (Washington, D.C.). The facility will work to develop new drugs, medical devices, software and other treatments for pediatric diseases and is slated to open in December 2020. The collaboration brings together Virginia Tech, a top tier academic research institution, with Children’s National, a U.S. news and World Report top 10 children’s hospital. Earlier this year, Children’s National announced a collaboration with Johnson & Johnson Innovation LLC to launch JLABS @ Washington, DC at the Research & Innovation campus.

Kaiser Permanente to invest more than $13B, open 10 new med facilities in Baltimore area Kaiser Permanente plans to invest and spend more than $13 billion and open 10 new medical facilities in the Baltimore, MD, area. The new investments and buildings will be completed by 2028. It hopes its Baltimore expansion will allow local service numbers to grow from about 63,000 members to about 200,000 members. Kaiser did not specify where the new facilities will be located.

AHA closes on $50M strategic venture fund The American Hospital Association (AHA) has announced the final closing of the AHA Innovation Development Fund, which provides financial and technical support to innovative healthcare startups. The fund is sponsored and managed by Concord Health Partners. Its goals include advancing promising healthcare technologies and solutions, creating venture opportunities for AHA members and allied hospital associations, bringing more hospitals and health systems into the venture funding sector and sharing best practices.

Walgreens explores going private Walgreens Boots Alliance is exploring going private in what could mark the largest leveraged buyout in history, according to CNBC. The international retailer has reached out to private equity firms, including KKR, which has a history with the retailer. Walgreens Boots Alliance has a market capitalization of roughly $55 billion, making it a large purchase for a single buyer. Shares of Walgreens have dropped 22% during the past 12 months as consumers are increasingly shopping for drugstore staples online.

December 2019 | The Journal of Healthcare Contracting

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