What happens next

One expert discusses how we arrived at the crises that surfaced amid the COVID-19 pandemic, and what the road ahead may look like.

In many ways, the COVID-19 pandemic was “the perfect storm” for the U.S.

healthcare supply chain, said Dr. Eugene Schneller, a professor of supply chain management at the University of Arizona State’s W. P. Carey School of Business, and the principal at Health Care Sector Advances.

“If you think about the last decade to two decades in healthcare, the mergers and acquisitions, the changes in technology, a number of things have happened,” he said. “Number one, we pushed as much as we could outside of the hospital. And by doing that we turn out to be one of the countries at the tail of the curve of number of beds per thousand, with one of the fewest.” While Japan, North Korea and others are leaders in this area, the United States has a relatively low number of beds, “because we put so much into outpatient surgical centers and other settings.”

Second, the U.S. has made an unrelentless push towards lowering costs. “One of the things we’ve done is push lean,” said Schneller. “Lean means that we have relatively few products. We’ve pushed all of the distribution of those products over to our traditional distributors. And they then are looking at their inventories and those inventories they’ve

become more lean to in terms of how they manage those.”

Thus the perfect storm – reduction in beds, outsourced products, and a move toward lean. Also add the impact of mergers and acquisitions. “Really, by not thinking ahead about how those big organizations can respond collectively, we have found ourselves in big trouble.”

In a podcast recorded in mid-April 2020 during the COVID-19 shelter-inplace order, Dr. Schneller discussed the immediate and long-term implications from the pandemic on the U.S. healthcare supply chain with The Journal of Healthcare Contracting Publisher John Pritchard.

look forward at this point, a month, two months and really worry a lot about what’s going to happen.”

Our obsession with cost ultimately cost us “We’ve had this cost obsession,” said Schneller, “and it’s really let lead to lean taking over all of our thinking.”

Lean can be wonderful in that it looks at and deals with the issue of demand, and it means that we can predict demand. “But one of the things we found out is we’re not very good at predicting demand for a pandemic.”

Schneller described the U.S. healthcare supply chain as one of the most resourcedependent supply chains that exists across industries. “And hospitals are probably the most highly dependent on other resources than any other industry you can think of,” he said. “They make almost nothing of what they use.”

Tier two and tier three suppliers – those who are making compounds that go into pharmaceuticals, parts that go into high tech or low tech devices – are very economically challenged due to COVID-19. Some may go out of business. “I think that the hospitals will begin to see shortages in those devices, as well as in the parts that are needed to repair devices when they become inoperative,” said Schneller. “So I am trying to

What will happen in the second wave of disruption? As companies domestically as well as in China, India, and around the world find themselves economically challenged, what will the impact be to the U.S. healthcare supply chain?

Linking public health with the everyday supply chain There has been a huge separation of planning for public health versus planning for everyday health in the United States, Schneller said. This came to a head with the national stores for pandemics. “We didn’t manage them very well,” he said. There were products in warehouses for long periods of time that weren’t inspected and checked properly, or had expired. For instance, ventilators had parts that needed to be maintained or inspected, such as plastic tubing. “And we need to think about how to finance that,” he said. “Think about this; we finance the fire department because we hope no houses will catch fire, but they’re on standby. We need to know how to understand how to fund standby in the supply chain, and we need to be able to divert some funding to do that. I’m not sure if the national level is the only level to do it.”

Tier two and tier three suppliers – those who are making compounds that go into pharmaceuticals, parts that go into high tech or low tech devices – are very economically challenged due to COVID-19.

As the principal investigator on a large Department of Defense grant, Schneller led a team that faced the same kinds of issues of maintaining large stores for emergencies. “But they understood that you need to be able to rotate stock,” he said. “Various products basically have expiration dates on them. And if you can’t move stock around very quickly, those national repositories aren’t going to serve the purpose.”

One of the realizations of the COVID-19 pandemic is we need a much better interface between our public health supply chain and our everyday hospital supply chain, Schneller said.

To listen to the full podcast, visit: www.nationalaccountexecutives. com/2020/04/national-accounts-todayepisode-8-dr-eugene-schneller.

Catalyst for change

Successful healthcare leaders require a new set of skills to succeed in a new era. The University of Tennessee Haslam’s Executive MBA for Healthcare Leadership aims to develop professionals who can lead these transitions.

The world is not slowing down. But with the right training and mindset, to

day’s healthcare leaders may master the ability to drive change in “one of the most complex sectors of our economy,” said Jim Rosenberg, director, Executive MBA for Healthcare Leadership for the Haslam College of Business, University of Tennessee.

“In the rapidly changing environment of healthcare today, organizations are under tremendous pressure to reinvent themselves,” said Rosenberg. “There is much experimentation and change as healthcare leaders react to new payment models, risk sharing models, customer satisfaction measures, expectations, and more. It is imperative we invest in the knowledge and capabilities of these leaders who are driving change in one of the most complex sectors of our economy.”

As the healthcare industry continues to face challenges that demand increased efficiency and quality of care, the need to combine healthcare industry knowledge with broad strategic business foundations has never been greater. The Haslam College Executive MBA for Healthcare Leadership program is designed to meet that need.

“The Haslam EMBA-HL program is a catalyst for these healthcare leaders and their organizations to successfully implement change and deliver the next era of healthcare,” said Rosenberg.

Building solutions across the health sector UT’s Executive MBA for Healthcare Leadership specializes in developing leadership for administrators, nurses, physicians and other healthcare professionals. The program builds on Haslam’s centers of excellence in supply chain management, Lean for healthcare, healthcare finance, and more. “We work with leaders across the health sector who are building solutions for the next chapter in healthcare service: a renewed era of affordable, accessible, equitable, and excellent care.”

The Haslam EMBA-HL program’s applied approach introduces new ideas and challenges participants to put them to work immediately, with the full support of expert faculty. “Participants grow personally, see immediate movement on their initiatives, and walk away with new capabilities that will support them throughout their careers,” said Rosenberg.

The Executive MBA for Healthcare Leadership is a highly-applied, one-year degree program for experienced professionals. In this hybrid in-person and online model, students attend four inperson residencies during the year, complete bi-weekly online distance learning sessions, and tackle applied homework assignments. In addition, each student completes an organizational action project (OAP) to apply new concepts to a strategic project developed with the senior leadership of their organization. Students spend the entire year analyzing an issue facing their organization and work closely with an assigned advisor to craft and implement solutions (see accompanying sidebar).

These projects, used in many of the college’s Executive MBA programs, have realized an average ROI for their organizations of over $6.5 million, said Rosenberg. “This thesis-like undertaking is representative of the immediate application offered by this program. In a time when healthcare is facing unprecedented changes, the OAP is a real-world investment that far exceeds the cost of the program.”

Students also participate in a personalized leadership development curriculum, guided by structured assessments and individual coaching. “We offer meaningful course content on leadership skills and evaluate personal leadership style allowing students to refine skills while learning the business of healthcare.

Our graduates become healthcare leaders who can drive innovation and change in their organizations.”

“In all, students complete 45 credit hours in an accredited program,” said Rosenberg. The program model has been used by the college since 1994 and has supported the education of over 800 senior level healthcare graduates from across the health sector.

The healthcare environment today is changing dramatically, and at a rapid pace. Professionals across the sector are working to transition from a system designed for acute care; dependent on cross-subsidies for many patient populations; and with few mechanisms for cost control.

Critical competencies The healthcare environment today is changing dramatically, and at a rapid pace. Professionals across the sector are working to transition from a system designed for acute care; dependent on cross-subsidies for many patient populations; and with few mechanisms for cost control. “The next era in healthcare is driven by a renewed focus on affordability and population health outcomes, which demands new attention to wellness, prevention, and chronic care,” said Rosenberg. “Leaders must simultaneously improve equity in care, expand access, and contain costs without sacrificing quality of care.” The Executive MBA for Healthcare Leadership curriculum is focused on building six critical competencies for healthcare leadership and transformation: ʯ Consumer centric thinking ʯ Business model innovation ʯ Healthcare policy influence ʯ Systems thinking and operational excellence ʯ Data and technology facility ʯ Change leadership and self-development.

“The program weaves together core MBA skills; leading-edge cases, speakers, and practices focused on key challenges including value-based payments, industry consolidation, pricing and contracting transparency, and healthcare consumerism; and direct application by students,” said Rosenberg. “This combination of concepts, cases, and application transforms the thinking and capabilities of students to lead and transform the next era in healthcare.”

In addition to delivering the curricular needs of today’s healthcare professionals, Rosenberg said the learning model is designed to provide intense, applied, and relevant opportunities for learning that allows students to gain information quickly and apply it immediately within their organizations.

High marks

The Haslam College of Business executive education programs are recognized as among the best in the world, ranked #20 globally (Financial Times 2019). The Executive MBA is ranked #1 for relevance by participating executives (Economist 2018).

Organizations that have participated include: ʯ Amedisys ʯ Cigna ʯ Covenant Health ʯ Pathways ʯ TeamHealth ʯ UT Medical Center ʯ Northwestern

Medicine ʯ Medtronic ʯ Anthem ʯ Centene ʯ LifePoint Health

ʯ Kindred Healthcare ʯ American College of Cardiology ʯ Sutter Health

A rare opportunity Several U.S. universities offer healthcarefocused Executive MBA programs. “What sets apart the Haslam Executive MBA for Healthcare Leadership is the core focus on preparing leaders to transform the industry by integrating business concepts to build creative solutions,” said Rosenberg. “Each cohort brings together highly experienced leaders from across the healthcare sector including providers, payers, and suppliers.”

This provides a rare opportunity for deep exploration, collaboration, and

A big thank you

We are truly inspired by your selfless courage and unwavering commitment to your hospitals, healthcare facilities and organizations during this COVID-19 pandemic.

At Health Connect Partners, our goal is to connect providers and suppliers through educational meetings and conferences. Our mission is to provide the best in healthcare education and networking.

We realize that the need for connection in our healthcare communities has never been greater, even though being in the same place is not possible right now. For our first ever Virtual Conferences held this spring, we facilitated those same one-one-one interactions our attendees have come to expect during our signature Reverse Expo, with no travel required.

Thank you to all who participated in our inaugural Virtual Conferences, and thank you to the Educational Advisory Board for their continued support.

We are beyond grateful to all of you for your understanding and willingness to make the Virtual CoNNection possible.

Together we will always make a difference.

“The next era in healthcare is driven by a renewed focus on affordability and population health outcomes, which demands new attention to wellness, prevention, and chronic care.”

ʱ Jim Rosenberg, director, Executive MBA for Healthcare Leadership for the Haslam College of Business, University of Tennessee

understanding across silos in the industry. “Haslam’s EMBA-HL is the only accelerated one-year program allowing for quick adoption of leadership skills and business acumen,” said Rosenberg. Students make an immediate impact on their organization through applied assignments to advance their work and improve delivery of care. The unique curriculum is driven by a faculty with deep experience in the healthcare, finance, operations, and strategic management sectors and dedicated to student success.

“The greatest asset to success is investing in yourself and being equipped to handle adversity,” said Rick Smith, vice president of operations - South Region, Pathways by Molina, an alum of the program. “Led by innovative faculty who possess global experience, this program provides life-changing value to ensure you have the skills needed to maximize your leadership potential.”

“We have over 20 years of experience leading healthcare executive education programs,” said Rosenberg. “Participants grow personally, see immediate movement on their initiatives, and walk away with new capabilities that will support them throughout their careers.”

Organization Action Project

A key component of the Haslam EMBA-HL program is the Organizational Action Project (OAP). Each student is required to complete an OAP to apply new concepts to a strategic project developed with the senior leadership of their organization. Students spend the entire year analyzing an issue facing their organization and work closely with an assigned advisor to craft and implement solutions.

“The Organizational Action Project (OAP) was one of the highlights of the program,” said Jason Fugleberg RN, BSN, MBA, CENP, chief nursing officer, Brigham City Community Hospital. “The OAP allowed me to leverage the knowledge of faculty mentors and apply concepts learned throughout the academic year to a company initiative with a real financial return. The financial benefit of my OAP was more than $5 million. This project was a game changer for our hospital.”

Other examples include:

Implementing a remote-order-entry pharmacy service.

The senior vice president of pharmacy for a hospital system with more than 42,000 employees and 100 hospitals worked with Randy Bradley, assistant professor of information systems and supply chain management at Haslam, to propose a proof-of-concept program for implementing a remote-order-entry pharmacy service for after-hours order review in 10 hospitals. Although the proposal emphasized pharmacy job satisfaction, its ultimate significance was in the improvement of patient care and safety. The fiscal goal of the proposal was to break even on cost through savings generated by reduced pharmacist and nurse turnover. Initial conservative estimates showed these savings covered 43% to 88% of the service cost. Through data tracking, the proposal was able to show a break-even program and patient care was advanced at the same time.

Growing a toxicology laboratory into a marketplace

force. The vice president of business operations for a forensic toxicology laboratory with 30 employees in Nashville sought to grow her company into a competitive marketplace force. The lab, which specializes in sports organizations, medical examiners, crime labs, physicians and pain management clinics, was struggling financially at the time. Its leadership team was very serious about return on investment – requiring at least $10 for every dollar invested into its vice president’s Executive MBA program. That return on education investment ultimately capped out at more than $2,000 per dollar spent, and the business now boasts approximately 280 people.

To learn more about recent OAPs implemented by EMBA-HL students visit: https://haslam.utk.edu/healthcare-emba/oap