Jhc feb18

Providing Insight, Understanding and Community

February 2018 | Vol.14 No.1

Bridgebuilder For Chris Torres and her team at Main Line Health, supply chain management and clinical resource management are a package deal

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CONTENTS »» FEBRUARY 2018 The Journal of Healthcare Contracting is published bi-monthly

by Share Moving Media 1735 N. Brown Rd. Ste. 140 Lawrenceville, GA 30043-8153 Phone: 770/263-5262 FAX: 770/236-8023 e-mail: info@jhconline.com www.jhconline.com

Editorial Staff

Editor Mark Thill mthill@sharemovingmedia.com Managing Editor Graham Garrison ggarrison@sharemovingmedia.com Art Director Brent Cashman bcashman@sharemovingmedia.com Publisher John Pritchard jpritchard@sharemovingmedia.com Vice President of Sales Jessica McKeever jmckeever@sharemovingmedia.com Director of Business Development Alicia O’Donnell aodonnell@sharemovingmedia.com Sales Executive Tyler Moss tmoss@sharemovingmedia.com

Circulation Wai Bun Cheung wcheung@sharemovingmedia.com The Journal of Healthcare Contracting (ISSN 1548-4165) is published monthly by Share Moving Media, 1735 N. Brown Rd. Ste. 140, Lawrenceville, GA 30043-8153. Copyright 2018 by Share Moving Media. All rights reserved. Subscriptions: $48 per year. If you would like to subscribe or notify us of address changes, please contact us at the above numbers or address.

POSTMASTER: Send address changes to Share Moving Media, 1735 N. Brown Rd. Ste. 140, Lawrenceville, GA 30043-8153. Please note: The acceptance of advertising or products mentioned by contributing authors does not constitute endorsement by the publisher.

Publisher cannot accept responsibility for the correctness of an opinion expressed by contributing authors.

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pg

Sales Executive Lizette Anthonijs Lizette@sharemovingmedia.com

Chris Torres

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6 Innovation: Health Systems’ New Focus

34 Vizient Spring Connections Summit coming up

12 Women in Leadership

36 Quality Payment Program: Year 2

16 Bridge-builder

40 Forming a PAC

22 Winter Olympics of 2002

43 New research into supply chain models illustrates distribution’s role

Publisher’s Letter And supply chain can – and should – play a role How do we get from here to there?

For Chris Torres and her team at Main Line Health, supply chain management and clinical resource management are a package deal The chance of a lifetime for one supply chain executive

28 Ready to Adapt?

Providers, suppliers discuss challenges, opportunities at Market Insights

30 Changes in the Lab

Medicare reimbursement to dip for many tests

32 Feet on the Street

In new format, members and suppliers meet together Physicians facing some changes in MACRA

How a Partner Advisory Council can build successful relationships between vendors and providers

44 HSCA

The Healthcare Landscape in 2018

46 Calendar of Events 48 Industry News 50 Observation Deck: Meet Tomorrow’s Docs

Regional groups can be a valuable resource for members of national GPOs

The Journal of Healthcare Contracting | February 2018

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PUBLISHER’S LETTER

John Pritchard

The Top 50 IDNs I recently came across a great list of the Top 50 IDNs by Net Patient Revenue. Not surprisingly, HCA Healthcare topped the list with $35 billion in revenue from its 205 hospitals and corresponding facilities. Following that, however, there were many surprises.

Top 50 IDNs by the numbers: • HCA has twice the revenue of the second-place IDN, and more than 25 percent more hospitals •T he average Net Patient Revenue of the Top 50 IDNs is $7.2 billion (Total Revenue is $7.7 billion) • Top 50 IDNs average 40 hospitals • Half of the Top 10 are faith-based organizations • Stanford Health has the fewest hospitals in the Top 50 with only four These types of lists give some context to what our nation’s IDNs are all about. When you add in the attributes of these IDNs, you can start to get a clearer picture as to what truly drives them.

Attributes that can add great depth to these figures include: • Average population of their service areas • Market share by service area • Profit status (investor-owned or tax-exempt) • Do they own a health plan?

We know there is a huge land grab happening across the industry, with IDNs chasing scale, so we can only expect these numbers to get bigger. I am always curious – how big is big enough? When I ask Supply Chain Leaders, I usually hear two levels: $10 billion and $5 billion in revenue. Within the list of Top 50 IDNs there are; • 28 IDNs with over $5 billion in revenue • 10 IDNs with over $10 billion in revenue This will be an interesting watermark to track. I wonder how many IDNs will be in each category this time next year?

To download the list of the Top 50 IDNs, visit http://www.jhconline.com/top50idns.html Thanks for reading this issue of The Journal of Healthcare Contracting.

Sincerely,

JIP *Special thanks to Definitive Healthcare for assembling the Top 50 IDNs

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February 2018 | The Journal of Healthcare Contracting

EXECUTIVE INTERVIEW

Innovation: Health Systems’ New Focus And supply chain can – and should – play a role

Ascension partners with Sunnyvale, Calif.-based Plug and Play Tech Center, and OSF HealthCare partners with Boston-based MassChallenge. Texas Medical Center launches a $25 million venture fund to support early-stage companies, while Partners HealthCare closes $171.1 million in capital to invest in such companies. Providence St. Joseph Health System has Providence Ventures, Cleveland Clinic has Cleveland Clinic Innovations, Mayo Clinic has Mayo Clinic Innovations.

Some are called “accelerators,” others “innovation centers.” Regardless of the term, health systems are channeling their clinical knowledge and experience, as well as capital, to not only develop innovative technology and Kyle Hathaway processes, but to commercialize them,

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too. How – if at all – does supply chain fit into the picture?

The Journal of Healthcare Contracting recently spoke with Kyle Hathaway, founder and managing partner, VantEdge One Group, about accelerators and supply chain’s potential role in identifying innovative technologies.

Chicago-based VantEdge One Group is an innovation and venture firm that invests in technologies, methodologies and solutions that demonstrate an ability to create improvement in everyday healthcare processes, according to the firm. Its newest fund, slated to close in summer of 2018, has created a funding mechanism that

February 2018 | The Journal of Healthcare Contracting

EXECUTIVE INTERVIEW

allows physicians and health systems to invest together in technologies for cost improvement in healthcare. The company’s integrated accelerator program, Ad-Vance, works with entrepreneurs facilitating technologies and services – including medical devices and diagnostics – into the market while supporting health networks to create their own culture of innovation. Current suppliers and technology partners include SIGHT Medical, Jump Technologies, Z5 Inventory, Cost Control Solutions, BuildingLogiX. Osprey Medical and CMR Institute.

Journal of Healthcare Contracting: We hear a lot of news about health systems setting up innovation centers. Is this a new trend, or has it been around for some time?

Kyle Hathaway: The trend has more to do with innovation as a strategic focus for healthcare. Most of the prominent innovation centers began as

healthcare systems have hosted all kinds of innovation, but have not been able to commercialize it. Traditionally, the creator of the innovation – who may be a physician – sells the intellectual property to a manufacturer with capital, who then brings it to market. So, even though the work was born in the health system, the health system ends up on the outside looking in. So now they’re asking, “Why get involved with innovation without taking a commercial interest in it?”

JHC: Have health system innovation centers been successful in terms of introducing new, marketable, effective medical technologies?

Hathaway: The jury is still out on the technologies created. Most of them are just managing to the “tech transfer” stage, so it will be exciting to see.

Even though the work was born in the health system, the health system ends up on the outside looking in. Now they’re asking, “Why get involved with innovation without taking a commercial interest in it?” research institutes, and they sought to attract clinical and post-clinical trial studies as well as research grants. These are still prominent today. What’s new is that these research institutes are beginning to add commercialization and innovation to their titles.

JHC: Why now?

Hathaway: Hospital CFOs have spent the better part of seven years in relative uncertainty about how their health systems are going to get paid for providing care. First, you had five years of hand-wringing around the Affordable Care Act. Now we have TrumpCare, and nobody knows what that means – though we do know it most likely means change.

Also, consider that healthcare is largely driven by what commercial payers will pay providers. In that sense, providers don’t actively control their revenue. Add to that the fact that for years

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JHC: What is “tech transfer,” and what are the difficulties innovation centers face as they engage in the process?

Hathaway: Let me take a step back.

Health systems create innovation centers to solve a problem. But one health system’s problem – and solution – is not necessarily that of others, though it may be similar. The notion of tech transfer is this: “I’m a health system, and I solved this problem for myself. Now, how do I commercialize it for a broader market?” In other words, the health system has hosted an innovation, incubated it, and created something it thinks is unique for the market. How do they create a business out of it?

But hospitals and health systems aren’t in the business of creating businesses. That’s the opportunity for innovation companies, such as VantEdge One Group. Our focus is on seed-stage to early-stage companies. We host a Partners in

February 2018 | The Journal of Healthcare Contracting

Rx Only ©2016 B. Braun Medical Inc. Bethlehem, PA. All rights reserved. 16-5430_JHC_5/16_RTS3

EXECUTIVE INTERVIEW

There are legal and tax advisors who are expert at this.

Innovation program, which brings health systems together to collaborate and incubate innovations for the commercial market. We help find the business opportunities from health systems’ innovations that have been created, we invest in them, and help them to scale.

JHC: To what extent do health system innovation centers develop things other than medical devices and technologies, such as services or business processes?

Hathaway: Some have created shared services models that are highly innovative. Some hospitals and health systems are moving toward self-distribution, and asking how they can turn their experience and expertise into a revenue stream.

You have to show people the impact of their ideas, so they don’t feel those ideas are being sent into an abyss.

JHC: How can non-profit hospitals and health systems engage in these commercial ventures without running into issues with the Internal Revenue Service?

Hathaway: Just because they are non-profit does not mean that they can’t invest. It really has more to do with where they devote the gains from investments. Non-profit organizations have done this for years. Most investment funds have separate legal structures. Others create spinoff “for-profit” entities owned by the health system.

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JHC: Name two or three things that distinguish successful innovation centers from less successful ones.

Hathaway: The main thing that characterizes a good program is the ability to create a culture of innovation amongst clinicians, physicians and employees. This engagement is critical and yields fantastic and relevant innovations. You have to show people the impact of their ideas, so they don’t feel those ideas are being sent into an abyss. The difficulty is filtering out the noise – that is, identifying those ideas that truly have potential. The second most important thing is the ability to scale the innovation created across the health network that creates it, then on to other networks.

And third: creating real innovation that solves a problem. There are a lot of innovations seeking a problem where a problem may not exist.

JHC: Should supply chain executives be concerned that they will be pressured to acquire the technologies that their innovation centers fund or create?

Hathaway: Supply chain is the front line of external innovation in healthcare. Innovation centers miss a critical source of innovation by not engaging supply chain in the discussion. Instead, supply chain leaders should engage the innovation center at their health system to collaborate. We have partnered with some innovative health networks where supply chain is creating not only innovation opportunities, but also commercial opportunities for their health systems through earlystage technologies they would have turned away in the past for being too immature.

February 2018 | The Journal of Healthcare Contracting

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LEADERSHIP

Women in Leadership: How do we get from here to there?

Christine Dean is grateful for the mentors who have helped her achieve her career goals. She wants to ensure that other women in the healthcare supply chain have the same opportunity.

Dean is director of membership and communications for Strategic Marketplace Initiative, a community of healthcare supply chain leaders – providers and suppliers – who work to move the industry forward, she explains. At its Spring 2017 Forum, SMI assembled a group of successful female executives who shared their thoughts, experiences and advice on women in supply chain. “‘Women in leadership’ is a major Christine Dean area of importance for our members,

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and one I am very passionate about,” says Dean.

A real problem The problem of gender inequality and unconscious bias in the healthcare supply chain is serious, she says.

A 2016 study done by Gartner and AWESOME (Achieving Women’s Excellence in Supply Chain Operations, Management and Education) found that women make up 35 percent of the total supply chain workforce but just 5 percent of the chief supply chain officer and senior VP positions, she points out. Within the healthcarespecific supply chain, women made up 37 percent of the total workforce but only 18 percent of senior directors and vice presidents.

“That shows there is a tremendous amount of talent being overlooked.

We need to do a better job of helping young women see the value of a career in healthcare supply chain.

February 2018 | The Journal of Healthcare Contracting

The Future of Non-Acute Care – Is your supply chain ready to perform?

Laboratory

Imaging Center

Orthopedic

Urgent Care

Primary Care Practice

Long Term Care

Dialysis & Infusion

CHC Home Health Agency

Ambulatory Surgery Center

Home Medical Equipment

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85%

of patient visits happen beyond the hospital

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LEADERSHIP

“Probably the largest and most significant barrier is that of unconscious bias, which restricts diversity throughout the top leadership levels of many organizations. People often promote and are most comfortable with people who look and act as they do. It takes conscious effort to create diverse teams.”

Women also face a double standard when it comes to exhibiting what is considered leadership behavior, she continues. Often the words and actions taken by a woman in leadership are considered aggressive, not assertive.

Women can be their own worst enemy when it comes to raising their hand and self-promoting, says Dean. Studies show women think they need 100 percent of the skills listed in a job description to apply, while men will apply if they have just 60 percent of the skills listed.

giving negative feedback to women.

People can’t develop and grow without balanced feedback.”

• Listen and be open to new ways to accomplish the team’s goals and ensure that there is balance among all team members.

Mentoring Dean especially believes in the power of mentors and sponsors.

“I have been pleasantly surprised at the willingness of our members (mostly vice presidents and above) to help foster their younger colleagues, and the eagerness of these emerging leaders to learn how to transition from management to leadership,” says Dean.

Mentoring is a two-way relationship.

“The mentee must be committed to learning from the mentor and vice versa. Understanding the value of having a mentor is also vital. Mentors can provide tips and techniques to navigate challenges, including negotiating pay raises and preparing for meetings. Most important, mentors provide constructive criticism, which is often hard to hear but necessary.

“I also think there is a notion that if someone has a mentor, they don’t need to put in time and effort,” she says. “Just the contrary is true.

The mentor is investing their time and professional reputation; they don’t want to sponsor/ mentor someone who is not totally engaged and motivated.

“Having diverse teams benefits the entire organization. Research shows that having diversity throughout an organization can lead to greater financial success. Inclusive leadership is about ensuring your organization is competitive and empowered.”

“It takes conscious effort to create diverse teams.”

Action steps Women can take steps to address some of these concerns, says Dean.

Some examples: • Become a mentor and/or sponsor, that is, an advocate for other women to be given challenging projects and greater responsibility.

• Be a good role model and create diverse teams while recognizing their own unconscious bias and how to overcome it.

• Have the confidence to take a risk and to learn from failure.

Men must take action too, she says. Examples: • Look for new and innovative ways to help foster diversity and gender equality in the organization. Reverse-mentoring – in which a older person is mentored by someone younger – is one.

• Give female direct reports candid feedback on their performance. “Often male executives indicate they are uncomfortable

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February 2018 | The Journal of Healthcare Contracting

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CONTRACTING PROFESSIONAL OF THE YEAR

Bridge-builder For Chris Torres and her team at Main Line Health, supply chain management and clinical resource management are a package deal

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February 2018 | The Journal of Healthcare Contracting

MLH HomeCare & Hospice, a home health service. Additionally, MLH consists of Main Line HealthCare (MLHC), one of the region’s largest multispecialty physician practices; the Lankenau Institute for Medical Research, a non-profit biomedical research organization; and five outpatient health centers.

The supply chain executive as a utilization and waste management consultant? “Yes,” says Chris Torres, system vice president, supply chain and biomedical engineering for Main Line Health, Radnor, Pennsylvania.

“Some folks focus on cost,” says Torres, who was named Contracting Professional of the Year by the Journal of Healthcare Contracting. “In my mind, it’s not the price [of supplies and equipment] that’s most important. It’s how we use it and how we can not waste it.”

To tackle those issues, the supply chain executive and his or her team have to work hand in hand with clinicians, with trust, openness and respect, she says. That is every supply chain executive’s duty. Some – like Torres – had a head start.

High schooler She began her healthcare career as a high-schooler, working in a research lab in a Philadelphia hospital. While still in college, she became certified as a surgical technician and scrubbed in the OR evenings and nights.

After graduation, Torres joined The Wistar Institute, an independent biomedical research firm in Philadelphia, but soon returned to the clinical setting, scrubbing in the OR, primarily for orthopedics and neuro procedures. She assumed additional responsibilities in SPD, logistics and materials management before taking a hiatus from healthcare in 2000, when she joined IKON (now Ricoh), to oversee facilities management in Pennsylvania, New York and New Jersey.

She learned valuable lessons about business with IKON, but she recognized that healthcare was her true calling. So, she returned to Main Line Health in November 2002.

Founded in 1985, Main Line Health (MLH, the System) is a notfor-profit health system serving portions of Philadelphia and its western suburbs. At its core are four of the region’s respected acute care hospitals – Lankenau Medical Center, Bryn Mawr Hospital, Paoli Hospital and Riddle Hospital. MLH also includes Bryn Mawr Rehab Hospital, Mirmont Treatment Center for drug and alcohol recovery, and

“Our hope is that this work will result in a sustainable model, which reduces variation in care, focuses on utilization and waste, and shows reduction in the total cost of care.”

The Journal of Healthcare Contracting | February 2018

Clinical resource management As the system vice president of supply chain management and biomedical engineering, Torres oversees more than 250 employees in biomedical engineering, contracting, inventory control and logistics. The supply chain management team is responsible for approximately $300 million in spend. The program encompasses an in-house biomedical equipment management program, strategic sourcing, supply chain management technology and data analytics, clinical resource management aligned with clinician engagement, and systemized logistics management.

For the past year and a half, Torres and her team have been redesigning Main Line Health’s value analysis/technology assessment program. “The Clinical Resource Management program (CRM) is an important foundation for our performance excellence work,” she says. The program is a systemized approach to reviewing new products, services and technology, and is guided by the Institute of Medicine’s STEEEP principles, where STEEEP is an acronym for six aims of healthcare – Safe, Timely, Effective, Efficient, Equitable, Patient-centered.

CRM provides Main Line Health with tools and data to address the standardization of care and optimize patient outcomes, says Torres.

“A key to success is our clinician engagement process. We have open communication with our clinicians, we are transparent with our cost data, and we share the responsibility of the ‘total value of care.’

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CONTRACTING PROFESSIONAL OF THE YEAR Clinical resource management What clinical resource management is Clinical resource management is a conscious, consistent and expedient decision-making process, explains Chris Torres, system vice president, supply chain and biomedical engineering, Main Line Health, Radnor, Pennsylvania. It: •U ses interdisciplinary teams across the continuum of care.

•H as executive engagement and support.

•U ses STEEEP principles (Safe, Timely, Effective, Efficient, Equitable, Patient-centered).

•U ses DMAIC principles, a process improvement strategy whose acronym stands for Define, Measure, Analyze, Improve, Control.

•U ses a “system lens” for all discussions.

• F ocuses on utilization, standardization and waste management.

• E nsures that training, education and communication on new products, services and technology are completed prior to introduction into the care continuum. (Focus is maintained on patient safety; enhanced staff education and inservicing.)

What clinical resource management is not Clinical resource management is not: •A wish list. Rather, products, services and technologies are evaluated based on their total value to care, not just because they are the latest and greatest.

• S imply a product review committee. CRM forces the team to look beyond product cost, to the outcomes associated with the product, service or technology.

•A path to find the cheapest product. Price is the last factor considered.

•A means to delay product approval. Rather, it is a process to make informed decisions.

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“We are embarking upon the difficult journey of ‘bending the Medicare cost curve,’” she continues. The team is looking at variations in care, outcomes, and a more holistic approach to delivering high-quality care to patients. “Our hope is that this work will result in a sustainable model, which reduces variation in care, focuses on utilization and waste, and shows reduction in the total cost of care.”

Using STEEEP principles, for example, Main Line Health is trying to answer questions such as, For a certain patient population, do we need order sets that require an Xray q8 hours when evidence-based medicine demonstrates

“Supply chain management is hard work, if you do it correctly.” that q24 hours is a safe and effective practice? “In the supply arena, we will work with our clinicians to determine if we really need 15 shoulder anchors, when perhaps four would deliver the same results.”

Just several months into the CRM program, Torres lists these accomplishments: • Increased physician engagement, evidenced by their participation in work groups and in vendor negotiation meetings.

• Increased awareness of everyone’s accountability for managing the supply chain. (“We are getting ideas directly from front-line staff as they relate to waste and utilization management opportunities,” she says.)

• Identification of standardization/utilization management opportunities, such as review and standardization of custom surgical packs and expansion of Main Line Health’s reprocessing program.

• Implementation of a much more stringent vendor management program related to access to surgical suites.

• I ssuance of multiple RFPs in the physician-preference arena, targeting vendor consolidation as well as price reductions.

February 2018 | The Journal of Healthcare Contracting

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CONTRACTING PROFESSIONAL OF THE YEAR Utilization consultants There’s no doubt that her clinical background has helped Torres build the clinical resource management program. But every supply chain executive has the tools to become utilization consultants for their health systems, she says.

“The first place to start is with relationships built on trust and respect.

Providing ‘actionable data’ to your clinicians is key.

“You don’t have to be the expert in the clinical arena,” she continues. “As a supply chain leader, you have access to a plethora of connections in the end-user space. Leverage those contacts to assist in understanding the landscape of use.”

Supply chain executives should capitalize on the expertise of their VAC/TAC team members, she says.

“Aligning with your CNO and CMO is a great place to start. They lead the teams that use the products, services or technologies, and they can be champions for your projects.

“If your data is accurate and if it provides a path to action, your clinicians will follow, as they are scientists and use rational thinking skills in problem-solving.”

“We talk about Lean Six Sigma, but ‘heart’ doesn’t fall in those guidelines.”

Grooming tomorrow’s leaders Over the past five to seven years, Torres has focused on building a team of “stars,” who are empowered to think outside the box, make decisions,

feel confident that she will always have their back, and celebrate their successes.

“Supply chain management is hard work, if you do it correctly,” she says. “It’s not about chasing price. It’s about understanding the life cycle of the products, services and technologies we use; the total cost of ownership; measurable outcomes; engaging partners; and doing the right thing for patients.”

Selecting people with that frame of mind and heart is one of the supply chain executive’s most important functions, she says.

Supply chain management is by no means unique to healthcare, but healthcare does present some unique demands. “The big question [when considering bringing on new people] is, ‘What are the traits needed in a healthcare supply chain professional?’”

Given the urgency of healthcare, where the stakes can be life or death, “you need people with heart as well as common sense,” says Torres. “I can teach tasks, such as how to stock a unit or place an order. But does my contract manager know the importance of what they do every day? We talk about Lean Six Sigma, but ‘heart’ doesn’t fall in those guidelines.”

Contracting Professional of the Year: Past recipients 2017 Alisha Hutchens, Novant Health, WinstonSalem, North Carolina 2016 Chris Fontana, Jefferson Health, Philadelphia, Pennsylvania 2015 Teresa Dail, Vanderbilt University Medical Center, Nashville, Tennessee 2014 David Hargraves, UPMC, Pittsburgh, Pennsylvania 2013 Joe Walsh, Intermountain Healthcare, Salt Lake City, Utah 2012 Laurel Junk, Kaiser Permanente, Oakland, California

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2011 Michele Tarantino, Carilion Clinic, Roanoke, Virginia 2010 Brent Petty, Wellmont Health System, Kingsport, Tennessee 2009 Dennis Robb, Health Alliance of Greater Cincinnati (Ohio) 2008 Donna Drummond, North Shore-Long Island Jewish Medical Center, New York 2007 Chris Meyers Janda, Fairview Health Services, Minneapolis, Minnesota

February 2018 | The Journal of Healthcare Contracting

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OLYMPICS

By Ginny Borncamp

Winter Olympics of 2002 The chance of a lifetime for one supply chain executive Editor’s note: In the fall of 1997, leaders across the Intermountain Health system in Salt Lake City received a memo seeking a candidate to coordinate the volunteer medical program for the 2002 Winter Olympics, to be held in Salt Lake City. Intermountain had committed to taking full responsibility for the medical and doping control program.

“Who would have known the depth and breadth of this role and what an amazing opportunity this would be?” asks Ginny Borncamp, who at the time was leading supply chain product strategies at Intermountain. “On the other hand, you’d have to wonder why the position was posted four years ahead of the Games,” says Borncamp, who today is senior vice president, chief sourcing officer, Providence St. Joseph Health, Renton, Wash. As the 23rd Winter Olympic Games unfold in South Korea, now seems like a good time to hear her story about what happened 20 years ago.

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When “the letter” came, I was working with the supply chain team at Intermountain’s system office. I just loved that job, but after the entire city’s excitement of winning the bid for the Games, the chance of working with the Salt Lake Organizing Committee for the 2002 Olympics and Paralympic (SLOC) seemed like an adventure I should consider pursuing. Of course, when I submitted my name for the job, I had little understanding of the full scope of the role. The director of the medical program was merely described as the “coordinator of medical volunteers” for the 2002 Olympics and Paralympic Winter Games. I’d had the opportunity to work with a

February 2018 | The Journal of Healthcare Contracting

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number of amazing volunteer organizations in earlier years, and just that aspect was thoroughly enticing.

This role came with no instructions and led to a journey defining the requirements, finding incredibly passionate and talented clinical and operational leaders, and working with a team of skilled and enthusiastic volunteers. The opportunity to 1) collaborate with the chief medical officers from all the National Olympic Committees (NOCs), such as the US Olympic Committee or the Austrian Olympic Committee; 2) understand the varying medical care requirements of each International Federation of Sport; and 3) work with the recently formed WADA (World Anti-Doping Agency), the FBI & Homeland Security, the FDA and USDA, eight fire district emergency response organizations, the Utah Department of Health for licensing of clinicians/facilities, epidemiology…. the list goes on. As you can see, this grew to be the chance of a lifetime.

Why a supply chain exec?

Though some might wonder how my experience in supply chain management made me a strong candidate for this role, many in our industry understand how the breadth of supply chain relationships and experience with needs assessment could be keys to success. After all, needs assessment is just a beginning to researching options and, most important, facilitating consensus-building among groups of people with often competing goals.

Additionally, as not-for-profits, both Intermountain and the Salt Lake Organizing Committee would be challenged to stretch every dollar invested in the medical and doping control program. And that is the core to the mission of every supply chain organization.

The CIO said that anyone who could pull together our Games’ medical program must have some pretty good project management skills.

Four years prior to the Games, Intermountain and SLOC filled the chief medical officer and director roles. Dr. Charles Rich and I moved forward with planning activities through the first year. We started building a team that would ultimately include medical directors of the Olympic and Paralympic Village polyclinic and the SLOC doping control lab; venue medical and doping control officers for each training and competition site; and operations leaders, including certified athletic trainers, physical therapists, nurses, ski patrol and administrative staff. Pre-Games activities included: • Defining the requirements of each organization and agency impacting the medical and doping control program. There were very specific rules related to medical response to the field of play, safety/security, emergency response,

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food safety, International Olympic Committee (IOC) medical commission, international federations of sport, and national Olympic committees.

• Planning of all types, including recruitment and staffing, construction of 36 clinics and a multidisciplinary Olympic Village clinic, supply chain management, pre-hospital care, and building a system of “Olympic hospitals.”

• Optimizing staffing plans to maximize services with the fewest possible volunteers.

• Recruiting, certifying and credentialing over 1,300 medical volunteers.

• Financial solutions to mitigate financial impact to Intermountain Health Care. This included finding additional contributing sponsors, negotiating contracts with numerous public agencies and private companies, and optimizing the use of much “value-in-kind” from official sponsors of domestic and international Olympic and Paralympic organizations.

One year prior to the Games, each Olympic Host City holds an IOC Medical Commission-sponsored international scientific conference for sport medicine and biomechanics. This, in itself, is quite an endeavor – hosting a three-day event for medical, sport scientists and biomechanists from across the world. We had a terrific program agenda, but unfortunately, our event was scheduled for Sept. 12 to Sept. 15, 2001 – yes, the day after 9/11. With no air transportation available, the meeting was cancelled and rescheduled for the year following the Games. You

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can’t imagine how 9/11 impacted the security aspects for the Games, including disaster preparedness at a seriously escalated level.

While engaged in planning, we were also responsible for staffing and provisioning two years of “test events,” i.e. World Cup and Paralympic events including figure skating; luge/bobsled/skeleton; freestyle, Nordic and Alpine skiing; ski jumping; snowboarding and hockey. We also participated in a number of “observation events,” providing the opportunity to study back-of-house operations of the Nagano (Japan) and Sydney (Australia) Olympic Games, and a number of domestic and international World Cup events. While my focus was on medical and doping control operations, there were 40 other functions in Olympic Organizing Committees, so these observations were busy trips!

Throughout the planning period, we were inspected by and/or gave presentations to the IOC, to medical officers of each National Olympic Committee and International Federation of

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Sport, and to local, state and federal regulatory agencies. My team was absolutely fantastic, and we received kudos all along the way.

The Games begin During the Games we provided a comprehensive medical program: • Athlete care spanned venue-based sports medicine/physical therapy, emergency response, and a multi-disciplinary polyclinic located in the Olympic/Paralympic Village. The polyclinic housed an MRI, CT, dental clinic, ophthalmology clinic, physical therapy, primary care and on-call sub-specialty coverage.

• Volunteer and staff care required a separate system of venuebased clinics, all staffed with physicians and nurses and which served as bases for circulating first aid responders.

• Doping control included venue-based doping control stations and an ISO-certified, IOC Medical Commission-certified doping control laboratory.

• Epidemiologic surveillance was led by the state health department. We incorporated data collection into our medical records that would signal high-risk or early patterns of concerning health issues.

• Coordination of EMS coverage, medical transport and hospital preparedness with three Intermountain Health Care hospitals and the University of Utah Medical Center.

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OLYMPICS

While pulling together 1,300 medical volunteers for these five or six weeks, we had to ensure that healthcare to our community members remained seamless and accessible. A collaborative bond grew across all the agencies involved in planning, and this commitment ensured the flexibility we would need to respond to whatever community healthcare needs arose during the Games.

After the Games As an “executive on loan” from Intermountain, I remained employed by Intermountain for the entire four-year period. After the Games, SLOC nearly vanished overnight. With months to build-out, the venues came down in days. All but a small core of operations leaders left within weeks. Those of us who stayed drafted comprehensive after-action reporting. Part of my responsibilities included disposition of our medical and doping control equipment and supplies. While we had been able to lease (and return) the MRI and other radiology equipment,

we had to buy (and then sell) two high-resolution mass spectrometers and other high-tech lab equipment that were used in the doping control lab.

Following closure activities for SLOC, I had a terrific opportunity to join the medical informatics department at Intermountain as a project manager/product manager for some meaningful projects. The product manager role focused on bringing the internally developed EMR (electronic medical record) to non-employed physician practices in the community. Projects included development and management of a directory of all non-employed individuals who had authorized access to the EMR, and responsibility for implementing the systemwide credentialing and privileging program across Intermountain’s 22-hospital system.

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When I asked the CIO why he recruited me for the position, he said that anyone who could pull together our Games’ medical program must have some pretty good project management skills. Of course, I had a whole team of committed professionals to help put our Olympic and Paralympic Games medical program together – and that is just what I encountered in this next role at Intermountain.

Learning experience Almost every aspect of planning for the Olympics provided new information and insight. Some of the more unexpected learnings included the following.

• I learned how to get legislation passed through state government. We had learned from the 1996 summer Olympic team in Atlanta that the process for temporary licensing for out-ofstate physicians was lengthy, and not all volunteers’ temporary licenses had been available by Games time. As such, Intermountain offered to do the primary-source credentialing of all volunteer physicians (in- and out-of state). This required legislative exemption from existing state licensing requirements.

• I learned that there are important rules for providing emergency medical response to the field of play in winter sport. For example, I liken speed skating to skating on knives(!) If athletes fall and are cut by a competitor’s skate, the laceration can be extremely serious.

The medical responders donned gloves as soon as they took their positions, and pocketed gauze

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and compression bandages for immediate response to the skater. They were staged at the corners of the track, where spills were most likely.

Working on the Games held its share of surprises too.

• Surprise No. 1: Volunteer recruitment. SLOC had standards for all volunteers, including a commitment to serve 10 days. When we started our physician recruitment, we found they unanimously responded that they could only commit up to three days, give or take a few days. Taking more time out of the office was completely unrealistic. I had no idea what to do.

Had I only known that by Games-time we’d be turning volunteers away!

• Surprise No. 2: Certification of an ISO-certified, IOC-certified doping control laboratory. The IOC Medical Commission was adamant that the DC Lab be located in the host city, even though there was a fully operational one in Los Angeles. Rather than allowing us to fly specimens from Salt Lake to Los Angeles each evening (with medical staff to ensure appropriate chain-of-custody), we had to build the lab.

• Surprise No. 3: The implications of 9/11. The Towers were struck just five months prior to Games “go-live,” and the security and surveillance measures that had to be put in place ballooned. Once again, it was amazing to see all planners step up to take on these additional responsibilities.

2006 and 2010 All organizing committees are responsible for transfer of knowledge, or TOK, to the future host cities. It was our pleasure to partner with the chief medical officer from TOROC (To-

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rino Organizing Committee) and their medical planning group as they experienced their own “observation events,” including our Olympic and Paralympic Games.

A remarkable aspect of working with an Olympic Organizing Committee (OOC) is that you develop an unusual area of expertise. This is true for the leaders of over 40 functional areas, including telecommunications, accreditation, food & beverage, security, sport, informatics, etc.

I was honored when TOROC asked me to help develop their medical program for the 2006 Games.

In developing the program scope document, I learned a lot about the Piemonte region’s EMS system, the community hospital system, and some really impressive sports and primary care medical professionals. TOROC was especially fortunate in that our Intermountain team had provided precedent-setting Games’ medical care data, which was invaluable in developing staffing levels, equipment needs, and logistics planning for TOROC’s medical program. I worked with TOROC throughout their first three years of planning, and counted my blessings for the opportunity to help provide a good base for their last year of planning, test events, and final Games preparations.

During TOROC’s planning period, the International Olympic Committee decided to develop a comprehensive TOK program. I was one of a number of consultants asked to write the technical manual for a program area. This was a wonderful idea, and I was able to see the benefit of these TOK manuals in Vancouver (site of the 21st Winter Olympics in 2010).

The general manager of Sport for VANOC, Cathy Priestner-Allen, had been my “one-up” at SLOC. I was not able to join her in Vancouver as the director of the VANOC medical program, but was thrilled for the opportunity to draft the operations plan to help the medical team get started on their own journey of Games planning.

This role came with no instructions and led to a journey defining the requirements, finding incredibly passionate and talented clinical and operational leaders, and working with a team of skilled and enthusiastic volunteers.

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MARKET INSIGHTS

Ready to Adapt?

Providers, suppliers discuss challenges, opportunities at Market Insights

“There’s no new money,” Jeff Little, Premier national field director for custom contracting and purchased services, Premier Inc., told suppliers at the Market Insights conference last fall in Miami, Florida. “The market is changing, and we have to adapt.”

Given the pressure providers face to reduce costs and improve the quality of care, price cuts alone won’t suffice, he said. Rather, suppliers and providers have to strengthen their working relationships in ways that go beyond price.

Sponsored by Share Moving Media (publisher of the Journal of Healthcare Contracting), the Market Insights conference was designed to help suppliers and IDN executives share ideas on how they can work together to tackle the challenges – and opportunities – presented by the present healthcare situation. Little moderated a panel discussion of supply chain executives on that topic at the conference.

High expectations Mark Campbell, vice president of materials management and process improvement, Tampa General Hospital in Tampa, Florida, told attendees that administration is expecting supply chain to help reduce the facility’s cost structure and maintain profitability. Supply chain, in turn, is looking to suppliers for help.

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February 2018 | The Journal of Healthcare Contracting

“Reimbursement continues to go down, private third-party payers are following Medicare’s lead,” he said. “We’re looking for partners to help us find opportunities to do something better or different.”

Physicians at Tampa General are one of those partners. “Physicians are much more savvy about reimbursement than they were five or 10 years ago,” said Campbell.

“They used to assume that if we charged for something, we would get reimbursed for it.” Now, they are receptive to data about costper-case and clinical outcomes.

Suppliers are valuable partners too. “They know they need to supply value analysis with information about their products – the clinical and financial benefits,” he said.

bundled payment program has extended supply chain’s influence even further, she said. “We looked not only at the cost of goods, but how we use them. Working across the entire continuum of a service line proved to be a good methodology too.” Prior to the project, relatively little was known about costs incurred for patient care following discharge, she pointed out.

“ We’re not static; our needs are changing continually. Suppliers have to ask questions and spend time to get to know us.”

– Sandy Myint

Supply chain as strategic partner Sandy Myint, executive director of value analysis, University of Miami, pointed out that in her organization, supply chain has escalated into a strategic department. “We are engaged in almost any activity,” she said, including equipment planning for new facilities. “We’re involved in leadership meetings; we help develop strategy; we are involved in the clinical committees.”

Working on projects such as the Comprehensive Care for Joint Replacement (CJR)

“We’re not static; our needs are changing continually,” said Myint.

“Suppliers have to ask questions and spend time to get to know us.”

Community hospitals Standalone community hospitals face some unique challenges, and suppliers can help, said Jean Sargent, a supply chain professional who now has her own consulting firm. For example, some small hospitals may not be prepared to implement unique device identification (UDI). But UDI can be a steppingstone to stronger, more strategic relationships between providers and suppliers, she said.

In addition, suppliers often have information about their products and services – such as total cost of ownership or return on investment – that can help providers make good product decisions. “For many years, I’ve gone to my suppliers and asked them to give me those matrices,” said Sargent. “I tell them, ‘You have all that information. If you bring it to me, it makes my job a heck of a lot easier.’”

Market Insights Sponsor: Vizient, Inc., the largest member-driven health care performance improvement company in the country, provides innovative data-driven solutions, expertise and collaborative opportunities that lead to improved patient outcomes and lower costs. Vizient’s diverse membership base includes academic medical centers, pediatric facilities, community hospitals, integrated health delivery networks and non-acute health care providers and represents more than $100 billion in annual purchasing volume. The Vizient brand identity represents the integration of VHA Inc., University HealthSystem Consortium and Novation, which combined in 2015, as well as MedAssets’ Spend and Clinical Resource Management (SCM) segment, including Sg2, which was acquired in 2016. In 2017, Vizient again received a World’s Most Ethical Company designation from the Ethisphere Institute. Vizient’s headquarters are in Irving, Texas, with locations in Chicago and other cities across the United States. Please visit www.vizientinc.com as well as our newsroom, blog, Twitter, LinkedIn and YouTube pages for more information about the company.

The Journal of Healthcare Contracting | February 2018

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MEDICARE REIMBURSEMENT

Changes in the Lab Medicare reimbursement to dip for many tests The Centers for Medicare and Medicaid Services released its final rates for the Clinical Laboratory Fee Schedule in November, as part of the Protecting Access to Medicare Act (PAMA).

The new schedule – which was to become effective Jan. 1 – is an attempt to bring the rates that Medicare pays for lab tests closer to the rates paid by private payers. (In other words, down.) If there’s good news, it’s that reimbursement for any test may be cut no more than 10 percent in years 1, 2 and 3, or 15 percent per year for the following three years.

Payment rates under the revised Clinical Laboratory Fee Schedule will be updated to reflect market rates paid by private payers every three years for most tests, according to CMS. Scott Adams, vice president, Share Moving Media (publisher of the Journal of Healthcare Contracting and Repertoire magazines), recently interviewed Mark Zacur, vice president and general manager, Fisher Health Care, a part of Thermo Fisher Scientific, with a focus on the acute-care and reference lab markets.

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Mark Zacur of Fisher Health Care points out that even though the Protecting Access to Medicare Act (PAMA) isn’t “new news,” interest among the company’s customers was relatively light until the latter part of 2017. That’s when the headlines and the reality of PAMA caught up with them. “They’re looking at it and saying, ‘Here’s another revenue stream that might take a hit. How are we going to make it up?’”

February 2018 | The Journal of Healthcare Contracting

Their concerns are justified, he adds.

“Any time reimbursement dollars are taken out of the system, providers have less money to invest in their facilities, care delivery and, ultimately, in the population they serve. There is a fear that these cuts could expand over time, and that private insurers will get on the bandwagon and cut their rates further as well.

For manufacturers and distributors, this would present more price pressure in a market that is already under intense pressure.”

By design, PAMA targets high-volume tests, says Zacur. “It’s a classic 80/20. Out of hundreds of tests, the top 25 or so account for about 60 percent of reimbursement.” Together, just five often-used tests – thyroid panels, metabolic panels, CBCs, vitamin D and A1c – accounted for more than 120 billion claims worth about $2 billion in 2016.

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Overall, the Centers for Medicare & Medicaid Services expects that PAMA will reduce reimbursement for lab testing by about 35 percent over time, he points out. “That’s a lot of money coming out of the system.” That said, roughly 10 percent of tests could see increases in Medicare reimbursement, including molecular-based tests, and some esoteric or emerging tests.

Zacur believes that because they enjoy a fairly broad revenue base, integrated delivery networks, or IDNs, may not feel the impact of PAMA as keenly as reference labs. Nor does he think that IDNs – in an effort to cut costs – will try to bring into a central lab much of the testing currently being done at the physician offices they own. “I don’t expect a huge By design, PAMA impact here,” he says. “Onsite testing targets high-volume is about convenience. It’s about the tests, says Zacur. patient leaving the setting with test results and a treatment protocol in “It’s a classic 80/20. their pocket.” That convenience and Out of hundreds patient-satisfaction factor will probof tests, the top 25 ably outweigh any financial or operaor so account for tional gains the IDN might realize by about 60 percent centralizing testing. of reimbursement.”

Among reference labs, large ones Together, just five should do better than small ones, often-used tests given their economies of scale, says – thyroid panels, Zacur. Still, Medicare accounts for roughly 10 percent of the total test metabolic panels, CBCs, vitamin D and volume in the two largest labs, and A1c – accounted for PAMA could result in a 1 percent or more than 120 billion greater revenue decline for each of the first three years. “It likely won’t claims worth about force established labs to shut down, $2 billion in 2016. but even a 1 percent decline can be significant in this industry.”

Zacur hopes that, in the end, PAMA will have a positive impact on providers, distributors and the health system at large. “Many labs provide guidance to practitioners about which tests to run versus which not to run. I would expect that to accelerate. Companies that specialize in diagnostics can help buyers identify products that best meet the needs of the IDN.” In some cases, that might mean nudging large customers toward test standardization across the system. In others, it might mean improving test accuracy.

“Ultimately, all this will lower costs throughout the healthcare network and hopefully enable the providers to achieve better outcomes.

“That’s what we’re all in this for.”

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RPC PROFILE

Feet on the Street Regional groups can be a valuable resource for members of national GPOs Most metropolitan and state hospital-council GPOs have disappeared. But even with today’s national giants, small groups remain a strong factor in group purchasing. Hence, regional purchasing coalitions, regional alliances and affiliates.

These subgroups exist largely on the energy, commitment and participation of their supply chain members. But they grow with the help of GPO sales reps. Representing national group contracting portfolios, reps such as Intalere’s Emily Hughes and Janice Lisowski also serve as key contacts – some might say the “glue” – of regional groups. Hughes was

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named West Alliance Rep of the Year, and Lisowski was named East Alliance Rep of the Year at Intalere’s 2017 member conference.

Lisowski calls primarily on nonacute providers in Illinois and Iowa.

She represents Intalere’s national contracts and works closely with the Intalere IKOINM Alliance (an acronym standing for Illinois, Iowa, Kentucky, Ohio, Indiana and Michigan). “Our members find value in membership in an – Emily Hughes

“We’re always trying to evolve. It’s a unique group.”

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alliance, with its regional pricing and programs, which are more specific to a smaller group,” she says. “I generally introduce that as an option to new Intalere members.” She seldom has to explain the concept of group purchasing to her accounts, as most are familiar with the concept. In some cases, it is the non-acute distributors that have introduced them to it.

Lisowski brought distributor experience with her when she joined Intalere in April 2015. She held sales positions with Cardinal Health and Kreisers (now Concordance Healthcare Solutions), as well as a couple of medical products manufacturers. That experience has served her well at Intalere. For one thing, she understands how pricing is set in the non-acute market, and she works with both members and distributors on pricing issues. Second, having been exposed to thousands of products as a distributor rep, she knows the brands on contract, as well as their competitors “I can say to an account, ‘We don’t have that brand on contract, but we have others,’” she says.

How closely do her accounts identify as Intalere members or IKOINM Alliance members? “It really depends on the customer,” she says. “First and foremost, I want them to know they are a member of Intalere. But I also want them to know they have this regional resource. I explain, ‘You’re getting the advantage of national contracts, but you also get the camaraderie of a regional group, and contracts specific to your region.’”

Always evolving Emily Hughes is regional manager for Health Resource Services (HRS), the Seattle, Washington-based affiliate of Intalere, and an independent LLC within the Virginia Mason Health System. She calls on hospitals and surgery centers and clinics, as well as a growing number of long-term-care and

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senior-living facilities. On a day-to-day basis, she may be promoting Intalere national contracts or Intalere National Healthcare Alliance contracts (a group of five Intalere affiliates). Or she may be promoting the HRS Northwest Healthcare Supply Chain Council, which she facilitates.

The Council is a decades-old group of supply chain executives from key HRS facilities in the Pacific Northwest and Alaska. “We’re focused on maximizing Intalere agreements, but also negotiating regional agreements where there is a need,” Hughes says. “Based on direction from the Council, we have signed agreements for medical commodities, construction and, most recently, print services.”

Emily Hughes Food service is another expanding

“You’re getting the advantage of national contracts, but you also get the camaraderie of a regional group, and contracts specific to your region.”– Janice Lisowski area, given its importance to senior living facilities.

Hughes enjoys watching the Council grow and change, as members retire and new ones join, and as the group continues to evolve and shift its focus. “We’re constantly looking to our members and askJanice Lisowski ing, ‘What are your hot spots now?

How can we help bring in suppliers to address them? What are we as a GPO missing?” The group meets three times a year, and those meetings often involve an educational component. “It’s an opportunity to learn about things that we can be helping each other with, the day-to-day things that people are up against.

“We’re always trying to evolve. It’s a unique group.”

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VIZIENT SUMMIT

Vizient Spring Connections Summit coming up In new format, members and suppliers meet together

The third and final day of the Summit will be focused on education for both members and suppliers through a series of “rapid fire” presentations on key industry topics, trends and case studies, says Tankersley.

“We believe the new format will afford members and suppliers more opportunity to network and share innovative ideas on how to best address the challenges facing the healthcare industry today.

“A few of the topics at our Connections Summit in the spring will include how to best affect clinical outcomes through the use of data, how to best lower costs and improve quality of care, how to manage during this time of uncertainty in healthcare reform, and strategies to address rising pharmacy costs and specialty drugs.”

Vizient’s fall Connections Summit – including the Innovative Technology Exchange – will be held at the Wynn/Encore Hotel in Las Vegas, Nevada, Oct. 1-4, 2018.

Vizient will bring together members and suppliers in one place (the Bellagio Hotel in Las Vegas) for the Spring Connections Summit, May 1-3. In prior years, Vizient held two separate Summits in the spring – one for members, one for suppliers. The events were back to back with an overlap day during which members and suppliers shared sessions. “However, through attendee feedback, we learned that this networking time hasn’t been adequate,” says Jan Tankersley, vice president, event strategy, marketing and planning for Vizient Inc. “In 2018, we are integrating the events and changing the name to the Vizient Connections Summit.”

The first day will feature breakout meetings in which hospitals with similar characteristics or goals can come together to share how they are addressing challenges, explains Tankersley. There will also be networking opportunities for suppliers to meet with Vizient teams. The day will close with a reception for all attendees.

On day two, the opening general session will feature a keynote speaker and another series of networking opportunities for suppliers and members. The day will also include recognition of suppliers for achievements in distribution service excellence, participation in specific Vizient supplier programs and recognizing the national account manager of the year.

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February 2018 | The Journal of Healthcare Contracting

TRENDS

the delivery of high-quality patient care through two avenues: the Meritbased Incentive Payment System, or MIPS, and Alternative Payment Models, or APMs. The Merit-based Incentive Payment System consolidates components of three prior programs: the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals.

Quality Payment Program: Year 2 Physicians facing some changes in MACRA Physicians caring for highly complex patients will receive some relief in Year 2 of the Quality Payment Program, established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). In addition, say the feds, the program will offer: • Meaningful measures and activities.

• A reduction in clinician burden (part of the Centers for Medicare & Medicaid Services’ recently launched “Patients Over Paperwork” initiative).

• New incentives for participation.

• Better care coordination.

• An easier way for clinicians to qualify for incentive payments by participating in Advanced Alternative Payment Models (Advanced APMs) that begin or end in the middle of a year.

Not all physician practice groups were pleased, however.

MACRA replaces the Medicare Sustainable Growth Rate (SGR) methodology for updates to the Physician Fee Schedule with a new approach to payment called the Quality Payment Program. The program was designed to encourage

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For MIPS, physicians earn a payment adjustment based on evidence-based and practice-specific quality data. To show evidence that they provided high-quality, efficient care supported by technology, they must send in information in the following categories: • Quality.

• Advancing care information, which replaces the Medicare EHR incentive program, also called Meaningful Use. • Improvement activities, such as expanding practice access, improving care coordination and promoting patient safety.

• Cost. (New for 2018.)

Alternative Payment Models, or APMs, are payment approaches that provide added incentives to deliver high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population; and they allow the provider to earn an incentive payment for participating in an innovative payment model. Advanced APMs are a subset of APMs, and let practices earn more for taking on some risk related to their patients’ outcomes.

February 2018 | The Journal of Healthcare Contracting

Year 2 changes Released in November, the final rule for Year 2 of the Quality Payment Program offers up to five bonus points on the physician’s final score for treatment of complex patients, based on a combination of the Hierarchical Condition Categories (HCCs) and the number of dually eligible patients treated.

The final rule also weighs the MIPS “Cost” performance category to 10 percent of the total MIPS final score. The Centers for Medicare & Medicaid Services is including the Medicare Spending per Beneficiary (MSPB) and total per capita cost measures to calculate practices’ cost performance scores for the 2018 MIPS performance period. CMS will calculate cost measure performance; no action is required from clinicians.

In addition, the final rule: • Allows the use of 2014 edition and/ or 2015 Certified Electronic Health Record Technology (CEHRT), and gives practices a bonus for using only 2015 CEHRT. • Automatically weighs the Quality, Advancing Care Information, and Improvement Activities performance categories at 0 percent of the final score for clinicians affected by hurricanes Irma, Harvey and Maria, and other natural disasters. (In other words, clinicians in affected areas who do not submit data will not have a negative adjustment.)

• Continues a phased approach to public reporting Quality Payment Program performance information on Physician Compare.

To accommodate small practices (that is, groups of 15 or fewer clinicians), Year 2: • Excludes individual MIPS-eligible clinicians or groups with less than or equal to $90,000 in Part B allowed charges or less than or equal to 200 Part B beneficiaries.

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• Adds five bonus points to the final scores of small practices.

• Gives solo practitioners and small practices the choice to form or join a Virtual Group to participate with other practices. A Virtual Group is a combination of two or more Taxpayer Identification Numbers (TINs) made up of solo practitioners and groups of 10 or fewer eligible clinicians who come together “virtually” (no matter specialty or location) to participate in MIPS for a performance period of a year.

• Continues to award small practices three points for measures in the Quality performance category that don’t meet data completeness requirements.

• Adds a new hardship exception for the Advancing Care Information performance category for small practices.

“ CMS has yet to extensively test new episode-based measures, reform the patient attribution methodology, and implement risk- and specialty-adjustment to avoid penalizing physician practices who treat the country’s most vulnerable patients,” says McLaughlin. “We are also concerned CMS will not provide feedback about costs and patients who are attributed to groups during the performance period, so groups will have no way to track their resource utilization.”

– Jennifer McLaughlin, senior associate director, government affairs, for MGMA

APMs and Advanced APMs CMS says that Year 2 offers more details on how the agency will incentivize clinicians who participate in APMs offered by payers other than Medicare, starting in 2019. This standard allows a non-Medicare payment arrangement to meet the financial risk criterion to qualify as an Other Payer Advanced APM if participants are required to bear total risk of at least 8 percent of their revenues from a given payer.

The agency has also updated its policies to further encourage and reward participation in Advanced APMs in Medicare.

Specific policies include: • Extending the 8 percent generally applicable revenue-based nominal amount standard that allows APMs to qualify as Advanced APMs for two additional years, through performance year 2020.

• Exempting Round 1 Comprehensive Primary Care Plus participants from the 50-clinician limit on organizations that can earn incentive payments by participating in medical home models.

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TRENDS

“MACRA was implemented seemingly to reduce physician practices’ regulatory burden, but MIPS is largely a continuation of … legacy programs,” that is, the Physician Quality Reporting System, or PQRS; and Meaningful MACRA replaces the Use (of certified electronicMGMA perspective health-record technology), CMS says that it worked with more than 100 Medicare Sustainable says McLaughlin. stakeholder organizations and over 47,000 Growth Rate (SGR) MGMA also takes exceppeople, and reviewed over 1,200 stakeholder methodology for tion with CMS’ decision to comments to finalize its Year 2 rule. But not updates to the Physician limit the pool of APMs to all of those stakeholders are pleased with the Fee Schedule with a new those developed by the Cenresult. The Medical Group Management Asapproach to payment ter for Medicare and Medsociation is one. MGMA represents more icaid Innovation. “There is than 40,000 medical practice administrators in called the Quality a much larger pool of innomore than 12,500 organizations.

Payment Program. The vative alternative payment In response to the association’s 2017 Reguprogram was designed models out there,” includlatory Burdens survey, more than half of reto encourage the ing those in the Medicare spondents reported they were participating delivery of high-quality Advantage program and in MIPS in 2017, and 72 percent said they the Patient-Centered Medical planned to exceed the minimum reporting patient care through Home care delivery model, requirements, says Jennifer McLaughlin, setwo avenues: the Meritnior associate director, government affairs, for based Incentive Payment says McLaughlin.

MGMA expressed disapMGMA. “However, 73 percent view MIPS as System, or MIPS, and pointment with CMS’ decia government program that does not support Alternative Payment sion to measure cost in 2018 their practice’s clinical quality priorities, and Models, or APMs. even though that informathe vast majority are very concerned about the tion is still incomplete, she clinical relevance of MIPS to patient care. continues. “CMS has yet to extensively test new episode-based meaMGMA supported the MACRA legislation, but the association believes sures, reform the patient attribution meththat, as implemented: odology, and implement risk- and specialty• MIPS is burdensome and incompatible with the intent of Conadjustment to avoid penalizing physician gress to improve the quality of and reduce the cost of healthcare. practices who treat the country’s most vul• Physicians have limited opportunities to move into an eligible nerable patients,” says McLaughlin. “We are APM, in large part because the regulations establish a restrictive also concerned CMS will not provide feedrisk standard. back about costs and patients who are at• The Center for Medicare & Medicaid Innovation – a part of CMS tributed to groups during the performance charged with supporting the development and testing of innovaperiod, so groups will have no way to track tive healthcare payment and service delivery models – has taken a their resource utilization.” top-down, government-driven approach to developing APMs. • Changing the requirement for Medical Home Models so that the minimum required amount of total financial risk increases more slowly.

• Making it easier for clinicians to qualify for incentive payments by participating in Advanced APMs that begin or end in the middle of a year.

Editor’s note: For an easy-to-read chart pointing out the differences in Year 2 of MACRA, go to this CMS website: https://www.cms.gov/Medicare/Quality-Payment-Program/resource-library/QPP-Year-2-Final-Rule-Fact-Sheet.pdf

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February 2018 | The Journal of Healthcare Contracting

Cardiologists are ready for MACRA encouraging our members that The American College of Cardiology is “Historically, it is not only important to particiconfident its members will fare well under cardiologists have pate, but also to continue to reMACRA’s pay-for-performance approach. performed well in view their performance and con“We expect positive quality measure reporting quality tinuously improve the quality of performance to carry through under measures under care they provide to patients.

MIPS and help many of our members not “Looking to future and more only avoid a penalty, but potentially also [the Physician robust years of the program, the have a shot at the payment incentives Quality Reporting ACC will continue to advocate available to high performers,” says ChrisSystem], so we that CMS allow cardiologists to tine Perez, associate director, Medicare expect this to carry report measures that are clinically payment and quality policy, American over under MIPS.” meaningful to the patient popuCollege of Cardiology.

– Christine Perez lation they treat.”

In the College’s 2017 practice census, over half of practices surveyed stated that they have in place an implementation plan for the Quality Payment Program, says Perez. “We believe that this number may be higher, as there are many practices where clinicians may be unaware that their administrative team, quality team, or clinical leadership [are] taking the lead on MIPS and APM activity on behalf of the group.

“Historically, cardiologists have performed well in reporting quality measures under [the Physician Quality Reporting System], so we expect this Most ACC members plan to report their perforto carry over under MIPS. We have heard of several mance measures via ACC’s qualified clinical data practices aiming for a full year performance this year registry, EHR, or a qualified registry, says Perez. since they have already established much of the re“We have heard concerns regarding the availporting infrastructure and expertise with measure ability of CMS’ attestation portal for Advancing reporting under the previous Medicare programs.”

Care Information and Improvement Activity re“The ACC agrees that quality should be a major porting. There were hopes that this portal would part of new payment methodologies, as long as it be available earlier in the year so practices would is measured appropriately,” says Perez. And ACC behave a chance to become familiar with it and know lieves MACRA is headed in the right direction. that they had a solution available for reporting “Unlike PQRS, which was pay for reporting, these categories.”

MIPS is now pay for performance, so we have been

The Journal of Healthcare Contracting | February 2018

39

MODEL OF THE FUTURE

Forming a PAC How a Partner Advisory Council can build successful relationships between vendors and providers

Ed Hardin will tell you, relationships take work. Hard work. Continual work. Work through good times, work through bad times. In fact, he would say that in order to build successful business relationships, you must make work part of your – and your team’s – DNA. That’s why he created a Partner Advisory Council (PAC) when he was system vice president at CHRISTUS Health in Dallas, Texas, and that’s why he intends to do something similar as senior vice president of supply chain management at Beaumont Health in southeast Michigan, which he joined in October 2016. It’s about taking vendor relationship management seriously.

Get strategic vendors involved The key to a successful PAC is to involve the health system’s most strategic vendors, each of whom dedicate a single individual – ideally, an executive with little to no transactional responsibilities – to meet regularly to discuss ways to improve their supply chain relationship, says Hardin. He attributes the success of his previous council “to the many incredible individuals who saw the value of collaboration and committed their time, energy and thought leadership to make it happen.”

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February 2018 | The Journal of Healthcare Contracting

“ Vendors understand that our goal is to change the trajectory of the health system.”

About four months into his tenure at Beaumont Health, Hardin called together five of the most active Partner Advisory Council members at his previous health system. “We held a very candid, lengthy – and sometimes painful – meeting to discuss lessons learned from the original formation,” he says. As a result, he intends to limit the number of participants on the Beaumont Health council to 16 members, with as few competitive conflicts as possible. Quarterly in-person meetings will be supplemented with video conferences when necessary.

Collaboration will be the key. “The feedback from former PAC members was to section off the meetings with opportunities for council members to participate,” says Hardin.

“But keep in mind, they are participating with

The Journal of Healthcare Contracting | February 2018

– Ed Hardin

other council members, so it’s unlikely anyone will use it as a sales opportunity.” Nor will price be a topic of discussion. “There is a recognition [by participants] that this isn’t about price,” he says.

“That said, we can discuss things that may reduce each other’s cost to serve, which may be reflected in price reductions.”

Ed Hardin

A safe place

If history is any guide, vendor members may very well be reluctant to speak up at their first few meetings. “With all these different people involved, they’re not sure if this is a safe place to talk or not,” says Hardin. “But usually, by the second year, there’s a sense of comfort. They understand that our goal is to change the trajectory of the health system. And there’s always an

41

MODEL OF THE FUTURE

industry mindset – we bring people back to the needs of the industry, so we can create something that will be a legacy for others.”

As he has in the past, Hardin intends to invite supply chain executives from other healthcare systems to occasionally sit in on council meetings. In addition, he intends to encourage council members to invite other members of their teams to occasionally join council meetings, and to generate more participation from Beaumont Health senior executives too. “We want to ensure that the ‘collaboration gospel’ is socialized [among suppliers and the health system],” he says.

As with his former PAC, Hardin expects the early going at Beaumont to be hard work. “It takes extra time – time out of people’s days.” But the payoff for both the provider and suppliers is worth it. “We made it part of our DNA as to how we operated,” he says. “We challenged suppliers to deliver measurable value to us, and once we started to prove this out, we extended our agreements with them and socialized these examples to the rest of the supplier community.”

Supply chain school As an adjunct professor with the Satish & Yasmin Gupta College of Business of the University of Dallas, Ed Hardin learned as much as he taught about the future of supply chain. And he expects to continue to do so by serving on the advisory board of the Wayne State University Global Supply Chain Management program.

“I truly enjoy working with young people,” says Hardin, senior vice president of supply chain management at Beaumont Health. “They challenge me and I challenge them. Nothing means more to me than to see people grow professionally and personally.”

Hardin is optimistic about the future of supply chain for several reasons.

42

“First is the proliferation of supply chain undergraduate and graduate programs,” he says. “I don’t believe we’ve reached the saturation point, as the programs I’ve encountered in the Michigan area are quite good. They’re graduating very qualified workers, and some are even considering healthcare.

“Second, we’ve become a ‘sexier’ profession, and are finding our way out of the basement and into the halls of senior leaders. We’re also surrounding ourselves with some rather impressive technology and starting to pay ourselves more competitively.

“All in all, we’re becoming a profession that I believe gives young people pause to say, ‘Perhaps I should take my supply chain skills to a place where they can really be used and where I can be supported.’”

February 2018 | The Journal of Healthcare Contracting

By Jeff Girardi, HIDA Getting the Most from Your Most Important Supplier

New research into supply chain models illustrates distribution’s role Almost 90 percent of IDN and hospital supply chain executives are satisfied or very satisfied with their distribution partner, according to a recent HIDA survey. Below are some key findings from the upcoming report.

Providers value distribution’s role in streamlining healthcare

HIDA PRIME VENDOR:

expertise as we attempt transitioning to just in time inventory.”

In fact, just-in-time and low-unitof-measure inventory models that carry more frequent product delivery schedules and expedited emergency shipments when needed remain common among providers. Forty percent of respondents value distribution’s role in reducing their need for dedicated real estate or inventory space – partly due to the prevalence of these models. In addition, since fewer than 10 percent of systems have plans to construct either new consolidated

A majority of hospital and health system supply chain executives think their prime vendor distributor partner adds value to the supply chain. Distributors’ ability to streamline ordering and procurement was the top benefit identified. “We value the availability of a large selection of items,” said one Chief Financial Officer from the Southwest. “We never know what new item we are going to need next.”

Fifty three percent of respondents identified supply chain cost reductions as the top advantage of using distribution. Some respondents noted that buying direct can increase total costs: most suppliers have specific order level or delivery requirements, or charge additionally for shipping/freight – which is not always reflected on product list prices. “Small utilization of some products still makes using medical-surgical distribution model work for us,” said one Vice President of Supply Chain in the South. “We avoid small orders with large shipping cost, i.e. cheaper to use local distributor for low volume items.”

Still, cost reduction was also the number one reason some organizations cited for purchasing items directly from manufacturers. Respondents identified various factors influencing this decision, such as seeking better leverage on price and contract terms.

Many executives plan to increase distribution’s involvement in supply chain Respondents plan to rely on distributors for additional product volume in the coming years, according to comments from survey participants. Whether “funneling additional products through the distributor to reduce freight costs,” or shifting “more Physician Preference Items (PPI)” into distribution channels, approximately 40 percent plan to increase their distributor’s role in supply chain over the next two years.

Eighty eight percent of supply chain executives are currently satisfied or very satisfied with their primary distributor, and many are looking to deepen these business partnerships. One example involves a health system asking its distributor for help “maximizing our continued efforts to standardize products and relying on their

The Journal of Healthcare Contracting | February 2018

service centers (7 percent) or distribution centers (8 percent) in the next three years, most providers will still rely on a primary medical-surgical distributor to deliver products to their organizations.

Keep an eye out for this Horizon Report, released in the first quarter of the year and covering many different aspects of provider supply chain models.

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HSCA

The Healthcare Landscape in 2018 Key trends to watch In 2017, the healthcare sector and supply chain experienced a period both of great challenge and transformation. Congressional debate surrounding the Affordable Care Act generated uncertainty among patients, providers and payers alike, and ultimately resulted in repeal of the individual mandate. The FDA Reauthorization Act of 2017 increased competition in the generic drug market, helping to preserve patient and provider access to critical

By Todd Ebert treatments. Policymakers pursued solutions to the rapidly escalating opioid crisis. A wave of emergencies and natural disasters tested the supply chain. And prescription drug price spikes and drug shortages continued to threaten patient care.

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The Healthcare Supply Chain Association (HSCA) represents leading healthcare group purchasing organizations (GPOs), the sourcing and purchasing partners to virtually all of America’s 7,000+ hospitals, as well as the vast majority of the 68,000+ long term care facilities, surgery centers, clinics, and other healthcare providers.

Given our unique line of sight over the entire healthcare supply chain and our experience working on the front lines of the healthcare industry, HSCA has an intimate understanding of the challenges the healthcare industry will continue to face as it enters the 2018.

Here are a few of the trends we are seeing as well as areas of focus and policy priorities that HSCA will continue to pursue in the coming year:

February 2018 | The Journal of Healthcare Contracting

Drug pricing and generic drug competition. Significant price spikes for critical generic drugs and ongoing prescription drug shortages continue to jeopardize patient access to care.

Patients have long relied on generic drugs to reduce costs and increase access to essential medications, and price spikes for commonly used drugs create hardship for patients and providers alike.

In 2017, HSCA advocated for – and policymakers enacted – priority review of abbreviated new drug applications (ANDAs) for drugs with three or fewer approved alternatives. In 2018, HSCA will continue to work with policymakers and supply chain stakeholders to increase competition in the generic drug market and find solutions to generic drug price spikes and ongoing prescription drug shortages. Our efforts will include policy recommendations for closing the FDA’s Risk Evaluation Mitigation Strategies (REMS) loophole, which currently allows some brand-name drug manufacturers to prevent generic competitors from entering the market. HSCA will also continue to advocate for policies and FDA guidance that support the safe and swift uptake of biosimilar medications.

Cybersecurity. Advances in technology have led to unprecedented developments in the healthcare sphere; medical device and service technology are improving patient care and creating efficiencies in the healthcare system. However, medical devices and services, like any computer system, are vulnerable to cybersecurity threats that could jeopardize patient health, safety and privacy.

With the recent wave of cyberattacks in various industries, cybersecurity will continue to be a focus and priority in the year ahead.

In 2018, HSCA will work with healthcare stakeholders to develop best practices and

With the recent wave of cyberattacks in various industries, cybersecurity will continue to be a focus and priority in the year ahead.

key considerations for cybersecurity, enabling the healthcare industry to continue to protect patient privacy while improving patient care.

Drug utilization. In recent years there have been numerous high-profile reports of inadequate supplies of generic drugs that have served as the standard of care for some diseases. HSCA members have a portfolio of solutions to help clients manage price changes and tackle drug utilization – issues closely connected to drug shortages – and will continue to be industry leaders in helping healthcare providers mitigate the impact of shortages in the coming year.

Global data standards. A common set of electronic data standards is critical in encouraging efficient operations for manufacturers as well as enabling providers to safely and accurately perform their duties.

Through our Committee for Healthcare eStandards (CHeS), HSCA will continue to advocate for policies that accelerate the adoption, implementation, and active usage of industry-wide data standards for improving efficiencies throughout the supply chain.

Emergency preparedness. In 2017, the country experienced a wave of natural disasters and other emergencies that put stress on hospitals and healthcare providers as they served affected communities. GPOs were on the front lines of those emergencies, providing support to healthcare providers and working with manufacturers to identify and locate supplies of much-needed resources. As we enter 2018, HSCA will work with lawmakers and healthcare supply chain stakeholders to provide key insights into improving emergency preparedness and offer strategic policy recommendations that will enable the healthcare industry to continue to provide top-quality care to patients in every situation.

As we head into 2018, HSCA and its members remain committed to helping hospitals and healthcare providers deliver the most effective and affordable care possible to the patients they serve.

Todd Ebert, R.Ph., is president and CEO of the Healthcare Supply Chain Association.

The Journal of Healthcare Contracting | February 2018

45

Send all upcoming events to Graham Garrison, managing editor, at ggarrison@sharemovingmedia.com

CALENDAR Association for Healthcare Resource & Materials Management (AHRMM) The AHRMM Conference & Exhibition Aug. 12-15, 2018 Chicago, Ill.

Share Moving Media ANAE Annual Conference July 17-18, 2018 Chicago, Ill.

Federation of American Hospitals Public Policy Conference & Business Exposition March 4-6, 2018 Marriott Wardman Park Hotel Washington, D.C.

Premier Premier 2018 Breakthroughs Conference and Exhibition June 19-22, 2018 Gaylord Opryland Resort & Convention Center Nashville, Tenn.

GHX 2018 Healthcare Supply Chain Summit May 7-9, 2018 Red Rock Resort, Las Vegas, Nev.

Intalere Elevate 2018 May 20-23, 2018

Health Industry Distributors Association (HIDA) Executive Conference March 20-23, 2018 Hyatt Regency Grand Cypress Orlando, Fla.

Gaylord Palms & Convention Center Orlando, Fla.

Vizient HealthTrust HealthTrust University Conference 2018 July 23-25, 2018 Nashville, Tenn.

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Vizient Spring Connections Summit May 1-3, 2018 Bellagio Hotel, Las Vegas, Nev.

February 2018 | The Journal of Healthcare Contracting

D E N W O N D I REACHING 4,400 IDN EXECUTIVES, 2,400 HOSPITAL EXECUTIVES AND 700 GPO DECISION MAKERS. CALL US FOR MORE INFORMATION:

LIZETTE ANTHONIJS

770-263-5266 e-mail: Lizette@sharemovingmedia.com

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ALICIA O’DONNELL 770-263-5261 e-mail: aodonnell@sharemovingmedia.com

Industry news

48

Suture Express receives 2017 Healthcare Emerging Model Award

Premier Inc c-suite survey finds healthcare providers are taking action to address opioid epidemic

Share Moving Media, publisher of The Journal of Healthcare Contracting, announced that Suture Express (Overland Park, KS) is the recipient of the 2017 Healthcare Emerging Model Award. The award recognizes companies and organizations that are bringing innovative solutions, services and products to meet the challenges that providers face in today’s marketplace. Suture Express was the recipient of the 2017 Healthcare Emerging Model Award for the company’s unique work with health systems that self-distribute or have a hybrid model.

“We hear a lot from hospitals, health systems and IDNs that the distribution model for the healthcare supply chain Suture Express continues to change,” said John Pritchard, publisher of The Journal of Healthcare Contracting. “The 2017 Healthcare Emerging Model Award acknowledges Suture Express for their custom, innovative offerings to meet the needs of health systems.”

Suture Express recently sponsored a webinar, “The Many Faces of Self-Distribution,” where supply chain leaders discussed the challenges and best practices of self-distribution models. You can download the webinar at https://sutureexpress.com/the-many-faces-ofself-distribution-supply-webinar/.

Healthcare providers are continuing to take action to address the opioid epidemic, according to a recent C-Suite survey from Premier Inc. Approximately 90 percent of C-Suite leaders from Premier member health systems are prioritizing strategies to curb opioid use.

According to the survey, the majority of C-Suite leaders are focusing their efforts on conducting patient assessments with standardized tools upon admission to evaluate pain levels, staff education on resources for safe opioid use and alternative methods for pain relief. Leaders also suggested they are engaging in patient education on pain management treatment and the safe use of opioids; collaborating with state, local and community partners; and using technology for clinical decision support, patient alerts, prescribing practices and continuous electronic monitoring of patient-controlled analgesia.

“With the number of people dying from opioid overdoses quadrupling since 1999 and the death toll continuing to climb, the President has deemed the opioid epidemic a public health emergency,” said Susan DeVore, president and CEO at Premier. “Premier and its members are continuing to take significant steps to improve pain management efforts, and reduce addiction, overuse and misuse by spreading and scaling tools, resources and practices focused on improving healthcare quality and patient safety.”

Premier has launched a series of efforts to address the opioid epidemic and make care safer. This includes a recently-published Safer Pain Management Toolkit for its members, which provides information on the history of opioids

February 2018 | The Journal of Healthcare Contracting

abuse, inappropriate access, and patient safety and pain management methods to improve care delivery processes.

Hackensack Meridian Health to merge with JFK Health, become largest health system in NJ Hackensack Meridian Health (Edison, NJ) revealed plans to combine operations with JFK Health (Edison, NJ). The merger will make Hackensack Meridian the largest health system in New Jersey. With the merger, Hackensack Meridian will consist of 16 hospitals and more than 160 patient care locations across the state. The combined health system will include nearly 33,000 employees and 6,500 staff physicians. Hackensack Meridian will invest $12 million to expand the cardiac catheterization lab at JFK Medical Center, the 498-bed flagship hospital of JFK Health.

Officials said they expect to complete the project this year, pending regulatory approval.

University of Pennsylvania Health System acquires Princeton HealthCare System The University of Pennsylvania Health System completed its acquisition of Princeton HealthCare System (Plainsboro, NJ) January 9, 2018. Under the acquisition agreement, PHCS and its affiliates will be rebranded Penn Medicine Princeton Health.

TPC and Vizient announce strategic agreement TPC (Plano, TX), a network of independent health systems located in Arkansas, Missouri and Texas, signed an agreement with Vizient Inc (Irving, TX) for comprehensive sourcing, performance improvement and cost management services, including strategic sourcing, utilization management, and clinical and operational consulting, as well as, service line, clinical and supply chain analytics. Through the multi-year agreement that begins in early 2018, Vizient will serve as the preferred national GPO and strategic cost management partner for TPC’s network of health systems. This agreement reestablishes the TPC and Vizient relationship that was previously severed in late 2016.

Medical City Dallas names new CFO Medical City Dallas appointed Melissa McLeroy as CFO. McLeroy comes to Medical City Dallas from Medical City Plano and Medical City Frisco, where she was

The Journal of Healthcare Contracting | February 2018

CFO. McLeroy previously worked at Medical City Dallas, where she served in a number of roles, including VP of finance and controller.

HealthSouth rebrands as Encompass Health Corp HealthSouth Corp (Birmingham, AL) changed its name to Encompass Health Corp. The operator has changed its ticker symbol on the NYSE from “HLS” to “EHC.” The Encompass Health includes 127 hospitals and 235 home health and hospice agencies in 36 states and Puerto Rico.

The rollout of the Encompass Health brand includes changing names and logos across its field operations as well as corporate resources. The operator’s facilities will also transition to the Encompass Health name, beginning April 1, with locations in Texas, Alabama, and Arkansas.

The full rollout is expected to be complete by Q1 2019.

Baylor Scott & White Health, Tenet announce agreement with Pipeline Health regarding sale of Baylor Scott & White Medical Center White Rock Baylor Scott & White Health (Dallas, TX) and Tenet Healthcare Corporation (Nashville, TN) reached a definitive agreement to sell 218-bed Baylor Scott & White Medical Center – White Rock hospital to Pipeline Health LLC. Baylor Scott & White Medical Center – White Rock is part of a joint venture partnership with Baylor Scott & White Health, in which Tenet is the minority owner. The transaction is expected to be completed in Q1 2018, subject to regulatory approvals and customary closing conditions.

Anthem Inc acquires HealthSun Anthem Inc (Indianapolis, IN) completed its acquisition of HealthSun, one of the fastest-growing integrated Medicare Advantage health plans and health care delivery networks in Florida. HealthSun serves more than 40,000 Medicare Advantage consumers in Miami-Dade and Broward counties through its network of 19 wholly-owned primary care and specialty centers. It also provides pharmacy support, transportation services, a dedicated network of physician specialists, and integrated medical cost management. HealthSun will operate as a wholly-owned subsidiary of Anthem and its associates will join Anthem’s Government Business Division. Financial terms of the transaction were not disclosed.

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OBSERVATION DECK

Meet Tomorrow’s Docs For the first time, the number of women enrolling in U.S. medical schools has exceeded the number of men, according to data released by the Association of American Medical Colleges.

Females represented 50.7 percent of the 21,338 matriculants (new enrollees) in 2017, compared with 49.8 percent in 2016. Female matriculants increased by 3.2 percent in 2017 year, while male matriculants declined Mark Thill by 0.3 percent. Since 2015, the number of female matriculants has grown by 9.6 percent, while the number of male matriculants has declined by 2.3 percent.

Overall, the number of matriculants in U.S. medical schools rose by 1.5 percent this year, and total enrollment stands at 89,904 students.

In contrast, the number of applicants to medical school declined by 2.6 percent from 2016. Although this is the largest decrease in 15 years, it is not the first, reports AAMC. Previous declines occurred in 2002 and 2008. As with matriculants, there was a significant difference by sex: The number of female applicants declined by 0.7 percent, while male applicants fell 4.4 percent. Since 2015, the number of female applicants has increased by 4.0 percent, while the number of male applicants has declined 6.7 percent. While the majority of ma– Darrell G. Kirch, MD, triculants this year were female, males remained AAMC president and CEO a slight majority (50.4 percent) of applicants.

Despite this year’s decline, the overall number of medical school applicants has increased more than 50 percent since 2002, and the number of matriculants has grown by nearly 30 percent over the last 15 years, reports AAMC. Twentytwo new medical schools have opened since 2007, including two in the past year, at the University of Nevada, Las Vegas, and Washington State University. Among matriculants in 2017, 8.7 percent attend one of these 22 schools.

“This year’s matriculating class demonstrates that medicine is an increasingly attractive career for women and that medical schools are creating an inclusive environment.”

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Entering classes at the nation’s medical schools continue to diversify. From 2015 to 2017, black or African American matriculants increased by 12.6 percent, and matriculants who were Hispanic, Latino, or of Spanish origin rose by 15.4 percent.

“This year’s matriculating class demonstrates that medicine is an increasingly attractive career for women and that medical schools are creating an inclusive environment,” Darrell G. Kirch, MD, AAMC president and CEO, was quoted as saying. “While we have much more work to do to attain broader diversity among our students, faculty, and leadership, this is a notable milestone.”

Additionally, an AAMC annual survey of matriculating medical students found: • More students indicated that having a work-life balance rather than a “stable, secure future” or the “ability to pay off debt” was an “essential consideration” in their career paths after medical school.

• Nearly 30 percent of new medical students indicated plans to eventually work in an underserved area.

Want to learn more about tomorrow’s doctors? You can see the AAMC annual survey results at https://www. aamc.org/download/485324/data/ msq2017report.pdf.

February 2018 | The Journal of Healthcare Contracting

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1 CIN: Computers, Informatics, Nursing: Eliminating Errors in Vital Signs Documentation, FIELER, VICKIE K. PhD, RN, AOCN; JAGLOWSKI, THOMAS BSN, RN; RICHARDS, KAREN DNP, RN, NE-BC, 2013. The paper vital signs recording had an error rate of 18.75%.

2 JHIM FALL 2010 Volume 24:Number 4, Vital Time Savings: Evaluating the Use of an Automated Vital Signs Documentation System on a Medical/Surgical Unit 3 Going One Step Further at Scott & White Medical Center—Temple: Eliminating manual vital signs documentation to prioritize value-added care. 2017 Welch Allyn. www.welchallyn.com 4 CareAware® VitalsLink: Eliminating Data Latency & Manual Documentation at Naples Hospital. Prepared by Cerner, 2013. © 2017 Welch Allyn

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