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CONTENTS

»» JUNE 2022

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

Feature

www.jhconline.com

Editorial Staff

T op Non-Acute Care Supply Chain Leaders

Editor Graham Garrison

» pg14

ggarrison@sharemovingmedia.com

Senior Editor Daniel Beaird dbeaird@sharemovingmedia.com

Art Director Brent Cashman bcashman@sharemovingmedia.com

Publisher John Pritchard jpritchard@sharemovingmedia.com

2 Publisher’s Letter: Where We Go from Here

Circulation Laura Gantert lgantert@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 2022 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

4 Battling Cancer Amid COVID How MD Anderson’s supply chain mobilized to protect employees and one of the largest and densest concentrations of cancer patients in the world during the pandemic.

Direct from the Source How Premier subsidiary S2S is working to create greater diversity in sourcing products for hospitals and health systems, along with long-term resiliency.

30 Operation Warp Speed Paul Mango, former Deputy Chief of Staff for Policy HHS, discusses the success of the public-private collaboration to deliver COVID-19 vaccines.

35 Book Spotlight: Significant Figures A Practical Guide to Unprecedented Cost Savings in Purchased Services

38 No Surprises Act is Flawed: Doctors They support the concept but not the proposed resolution process for payment disputes.

42 Heightened Cybersecurity Awareness The healthcare sector was the victim of more ransomware attacks than any other sector in 2021.

46 Healthcare Group Purchasing Organizations Critical partners in the COVID-19 response effort.

47 Building in Resilience Preparing for the next pandemic requires the right balance and right solutions.

48 News/Calendar of Events

contributing authors.

Subscribe/renew @ www.jhconline.com : click subscribe The Journal of Healthcare Contracting | June 2022

PUBLISHER’S LETTER

JOHN PRITCHARD

Where We Go from Here Over the last two-plus years, the COVID pandemic has altered our nation’s healthcare in huge, fundamental ways. But there were also more subtle things that changed – or didn’t change. For instance, supply chain teams across U.S. hospitals and health systems had to put on hold whatever projects and initiatives they had been working on to combat the disruptions and urgent needs of providing lifesaving supplies for our caregivers. As director of procurement, supply chain shared services / innovation at HonorHealth, Joseph Bates was working on a project of moving the non-acute to a different platform for ordering to give them a userfriendly Amazon type shopping experience when the pandemic hit. Obviously, that project was delayed as he and his team shifted to their pandemic response. But now Bates said he is looking forward to using the tools that this new platform gives his organization: looking at order efficiencies, opportunities for savings, and using those formularies to drive savings or to create standardization. “And then working with the non-acute clinical staff to find better ways to track inventory, and give us more visibility to some of those products that we lost sight of over the last couple of years amid the pandemic,” he told us in this issue’s cover story as we recognize some of the top non-acute supply chain leaders in the industry. Dawn Wells, senior director, supply chain, for Northwell Health, said she is looking forward to supporting the continued growth of her organization’s ambulatory network in many different areas. “We are relaunching many of our [Value Analysis Team] activities that were put on hold due to COVID and I am looking forward to working with our teams to achieve savings and create processes to align our non- acute facilities to our GPO agreements.” She is also excited about their sustainability and supplier diversity program. “We are embarking on an initiative to ‘green the ambulatory’ which will serve as an opportunity to align with system initiatives around the health impacts of climate change. I am a champion for supplier diversity and have been very lucky to lead and grow our supplier diversity initiatives for the past 10 years.” Indeed, it’s good to hear more and more of these stories of momentum coming back to supply chain initiatives. We hope you enjoy this issue of The Journal of Healthcare Contracting.

June 2022 | The Journal of Healthcare Contracting

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MODEL OF THE FUTURE

BY GRAHAM GARRISON

Battling Cancer Amid COVID How MD Anderson’s supply chain mobilized to protect employees and one of the largest and densest concentrations of cancer patients in the world during the pandemic.

The University of Texas MD Anderson Cancer Center (MD Anderson) is one of

While hospitals across the globe had

the world’s most respected centers devoted exclusively to cancer patient care, research,

issues with PPE, MD Anderson had

education and prevention. MD Anderson’s mission is to eliminate cancer in Texas, the

to be extra cautious due to its patient

nation and the world. The organization does this through outstanding programs that

population. Many of its patients are im-

integrate patient care, research and prevention.

munocompromised, even if they’re in the hospital for a non-cancer related issue like a spinal fusion or a cardiac event.

With one of the largest and densest

chain was a hyperfocus on all products

This required MD Anderson to be overly

concentrations of cancer patients in the

needed to ensure the safety of our patients

conservative to protect the safety of its

world, MD Anderson’s job of providing

resulting in sourcing from non-traditional

patients. For example, restricting visitors

an adequate and consistent supply of qual-

sources, increased inventory and the ex-

and utilizing N95 masks and Power Air-

ity personal protective equipment (PPE)

panded distribution of various products,”

Purifying Respirators (PAPRs).

took on an even greater significance amid

said MD Anderson Chief Procurement

the pandemic. “The effect on the supply

Officer Calvin Wright.

Working with MD Anderson’s IT leadership, disparate data systems were

MD Anderson Cancer Center Campus

June 2022 | The Journal of Healthcare Contracting

synchronized to provide a daily institutional dashboard on PPE inventory levels, days on hand and utilization rates. Another supply chain team member, Value Analysis Program Director Renato Maclan, facilitated a daily supply chain briefing for more than 100 weeks in which any safety concerns related to supplies (stockouts, substitutions, backorders, recalls, etc.) were addressed immediately to prevent impact to patients and clinicians. “We like to say Renato was the ‘glue’ that kept our supply chain responsiveness focused and together,” Wright said. “He is just one of the individual heroes from the supply chain organization that worked endless hours and absolutely refused to relent to protect patients and staff.” Lauri and inventory planners

Lessons learned Several things have come out of the pandemic that have actually strengthened the supply chain. In December 2019, prior to the pandemic, MD Anderson’s Incident Command Structure participated in a tabletop exercise centered on a global pandemic that initiated out of Europe and was spreading globally. “How prophetic,” Wright said. “Although we had foresight that this could happen, the actual COVID-19 pandemic far exceeded most expectations we had in terms of readiness. We need more of these exercises, and they should also include our distributors and critical suppliers. We must really think out-

MMS management

side the box going forward for any local, regional, national or global challenge that can touch our ability to deliver the best

supply chain team is always included in

One thing I have learned is not to let

cancer care in the world.”

the Incident Command structure. These

our imagination fail us.”

Per Matt Berkheiser, Associate Vice

scenarios take time to plan and being

“Our staff has been resilient, and

President of Environmental Health &

creative is essential to test our thought

both supply chain team members and cli-

Safety at MD Anderson, “These exercises

processes. The drills are valuable, but we

nicians have proven this repeatedly amid

are important to test our plans and the

must be prepared for the unexpected.

major supply disruptions. MD Anderson

The Journal of Healthcare Contracting | June 2022

MODEL OF THE FUTURE

clinicians have adapted to the new environment with a strong willingness to assist their supply chain teammates,” Wright said. “Clinicians have familiarized themselves with supply chain terminology, like supply backorders, allocation, functional equivalents, and third-party logistics (3PL). The collaboration between the supply chain and clinical operations teams during the pandemic has been great

SCM finance team

and continues to improve.” At the initial stage of the pandemic, well before the first reported case in the U.S., MD Anderson’s sourcing and contracting, and materials management teams, foresaw how a global pandemic could impact its patients and employees. “As such, we initiated large bulk orders for medical grade N95 and Level 3 isolation masks. This was accomplished through utilization of a Texas based historically underutilized business (HUB) that was also the second largest domestic manufacturer of N95 at the time. This contractual arrangement ensured us stable supply of the ‘highest quality’ N95 and Level 3 isolation masks throughout the pandemic,” Wright stated, adding that “MD Anderson’s support of local and Texas-based diversity and small business suppliers is critically important and an essential part to the organizations’ diversity, equity and inclusion initiatives.” MD Anderson also found value in local community collaboration. For instance, the organization partnered with a local community college and MD Anderson’s innovation team to print 3-D face shields. “Additionally, we worked with a local company to manufacture, test and alter isolation gowns,” Wright said. “These were wonderful collaborations.” Nationally, MD Anderson was one of the first healthcare providers to join the

MMS offsite receiving team members

June 2022 | The Journal of Healthcare Contracting

MODEL OF THE FUTURE

ʯ Establishment of a 3PL program

operating room, environmental health

tive (HIRC), which is a partnership of

to help manage critical PPE and

and safety, clinical administration and

leading healthcare providers working with

supply inventory that exceeded local

our group purchasing organization) to

major manufacturers and distributors to

capacity and capability of traditional

review backorders, supply shortages

increase transparency in the end-to-end

distribution channels.

and emerging threats to the healthcare

Healthcare Industry Resiliency Collabora-

supply chain.

ʯ Creation of real-time inventory Several other advances that were refined

dashboards around critical supply

during the global pandemic include:

inventory designed to let the supply

chain team will be focused on several initia-

chain team know emergent areas of

tives, including improving the organization’s

need or concern.

3PL program, inventory management

ʯ A significantly better understanding of MD Anderson’s highest risk exposure ranked by priority and importance conducted through

Looking ahead, Wright said the supply

capabilities and quality of information

ʯ Permanent implementation of a

about the products used across the enter-

several comprehensive risk

daily supply chain briefing (with

prise, as well as enhancing supply chain

management exercises

representatives from materials

resiliency in terms of demand forecasting,

and modeling, led by the

management, sourcing and

improved supplier and manufacturer part-

organization’s Enterprise Risk

contracting, finance, system and

nerships, redundancy in critical supply avail-

Management team.

support, value analysis, pharmacy,

ability, and overall business intelligence.

June 2022 | The Journal of Healthcare Contracting

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SOURCING

Direct from the Source How Premier subsidiary S2S is working to create greater diversity in sourcing products for hospitals and health systems, along with long-term resiliency.

A lot has changed in the U.S. healthcare supply chain in the last decade –

In the early days, the objectives were

especially in the last couple of years – as hospitals and health systems pivoted from

around sourcing quality products, and initially

just-in-time delivery and cost conscious buying habits to alternate sourcing and

just exam gloves, at the best cost possible.

pandemic needs.

“While this is still the core of our mission, we’ve expanded to match the evolving needs of the healthcare supply chain – today and “COVID-19 has undoubtedly

for tomorrow,” said Bain. “S2S now has a

highlighted issues with the globalization,

broad-portfolio market presence, is consid-

overreliance and fragility of our supply

ered an innovative and disruptive strategic

chains,” said Colin Bain, president of

partner and has doubled down on our

direct sourcing for Premier, Inc.

commitment to build long-term resiliency.

For ten years, S2S Global, a direct

Colin Bain

This is critical as our members today are

sourcing wholly owned subsidiary of

looking for us to aid them in evolving the

Premier, has been identifying new

supply chain away from an isolated, trans-

and untapped manufacturers around

actional purchasing activity and toward a

the world – working directly with them to

strategic enterprise-wide function.”

produce high-quality products, including those in short supply.

In the following interview, Bain discussed the changes to successfully

June 2022 | The Journal of Healthcare Contracting

sourcing critical healthcare products into today’s disruptive marketplace.

Other initiatives include:

ʯ A key differentiator in our strategy is

specifications, building a formulary of high-quality products that meet

a focus on automation, which brings

providers’ expectations. In addition,

JHC: Obviously COVID has been a

added efficiencies, savings and speed

members who leverage our global

disruptor. But what opportunities

to market. The DeRoyal partnership,

direct sourcing capabilities, see

has it presented the supply chain

for example, is transforming a

an average of $40 million in

that otherwise may not have been ad-

traditionally man-made process to

annualized savings.

dressed, or addressed as urgently?

fully automated production, with

Colin Bain: Major opportunity areas, ac-

the capability to produce two gowns

JHC: Why did domestic manufactur-

celerated by the pandemic, are three-fold:

every second. The isolation gowns

ing not work well in the past? What

are now coming off the line, and we

needs to be (or is) different this time?

ing and suppliers, including greater

expect this partnership to produce

Bain: Economics pushed many medi-

domestic production

more than 40 million domestically

cal manufacturers overseas, where tax

manufactured gowns annually.

incentives and lower-cost labor enabled

1. Greater diversity of manufactur-

2. Rethinking inventory management and safety stock as well as more dynamic and demand-driven strategies, including direct-to-manufacturer sourcing, forward buys and special distribution arrangements

3. Technology enablement and automation: both for greater endto-end visibility and within the production process

Economics pushed many medical manufacturers overseas, where tax incentives and lower-cost labor enabled cheaper production. Over time, this led to a dynamic in which 80% of all PPE was sourced from Asia, primarily China.

These strategies are vital for a futureforward supply chain – to build resiliency,

ʯ Throughout the pandemic, our direct

cheaper production. Over time, this led to

mitigate risk, increase efficiencies and

sourcing capabilities have continued

a dynamic in which 80% of all PPE was

realize cost savings.

to supply products for members

sourced from Asia, primarily China.

at or above 100% allocation levels.

It can be cost-prohibitive for manu-

JHC: Please tell us about recent S2S

S2S Global delivered more than

facturers who are competing in a lowest-

initiatives to find sourcing solutions

166 million masks and respirators

price-wins market. Sustainable solutions

for health systems.

and 66 million gowns during the height

for greater domestic production must

Bain: Together with our members, we’re

of the pandemic, and continues to

decrease barriers to entry, namely the time

changing the way we source critical health-

serve as a supplemental source of

and cost to enter the marketplace – and

care products and bringing production back

supply today.

we pioneered a syndicated model that

to the U.S. – helping to eliminate overreli-

does just that.

ance on oversees manufacturing and port

ʯ We’re not only employing innovative

congestion. Through collaborations with

strategies to expeditiously access to

Premier, S2S Global and our member

Prestige Ameritech, DeRoyal Indus-

PPE and other supplies, but we’re

health systems pool capital and commit

tries Inc, Honeywell and Exela Pharma

also ensuring these products live up

to long-term purchasing to incent the

Sciences, we’re producing millions of

to superior clinical standards. All

domestic production of vital products.

domestically made PPE (including masks,

S2S products come from validated

The up-front liquidity, aggregated demand

isolation gowns and nitrile exam gloves)

and inspected suppliers and are

forecasting and commitments to buy

and pharmaceutical products.

made according to our members’

give manufacturers the surety needed to

The Journal of Healthcare Contracting | June 2022

Our model is a vehicle through which

SOURCING

expand production, modernize facilities and drive innovations. This ensures that providers have cost-effective, domestic supply alternatives. S2S is looking to replicate this model with other types of supplies, and we’re in active conversations with four or five other manufacturers at the moment. Replicable investment models like this build market competition and offer domestic options for providers where they didn’t exist previously. And governmentbacked, zero-percent interest loans and tax incentives can help further close the cost gap between domestic and foreign manufacturing sources. JHC: Where does domestic manufacturing fit into the overall sourcing strategy of the U.S. healthcare supply chain amid and beyond the pandemic? Bain: The pandemic reinforced the fragility of the supply chain and the risks of overreliance on foreign manufacturers. When I think about domestic manufacturing, I almost think of it as my personal investment portfolio. You don’t want to put all your eggs in one basket. Our

A Holistic View Colin Bain, President of Direct Sourcing for Premier, Inc., said S2S is focused on: ʯ Sourcing vital products both domestically and internationally ʯ Providing meaningful cost reduction opportunities ʯ Providing exclusive global sourcing and manufacturing capability; members are also able to define, approve and refine product specifications ʯ Establishing the capability to support direct container shipments, taking additional cost out of the supply chain “We’re taking a holistic view of the entire healthcare value chain, from design and production to delivery, and how to make it more reliable and dependable.”

belief is that a successful strategy must be diverse and must be domestic. The philosophy of S2S Global and Premier is not to pick up all overseas manufacturing onshore or nearshore, but to have an appropriate amount of backstop. A new, hybrid approach to supply chain management is needed, where

Our team is working to balance both,

labor shortages and rising inflation. And

right now targeting a ratio of 70% inter-

while many of the most severe product

national and 30% domestic, although that

shortages have eased, supply disruptions

could change.

are expected to continue throughout all

geographically diverse and U.S.-based

of 2022.

manufacturing will help reduce overreli-

JHC: Do you foresee a return to

ance on any single country or region. This

normalcy for the supply chain

ing diversification and domestic manu-

diverse and balanced approach is not just

any time soon?

facturing investments, intentional design,

a better contingency plan for emergencies,

Bain: Economies and industries world-

automation and lower shipping costs, can

but it also recognizes the need for global

wide – including the U.S. healthcare indus-

help mitigate further challenges in this

sourcing to keep costs in check and help

try – continue to face significant head-

environment and is an innovative model

alleviate national security concerns.

winds such as global transportation delays,

for long-term resiliency.

We believe that S2S’ strategy, includ-

June 2022 | The Journal of Healthcare Contracting

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June 2022 | The Journal of Healthcare Contracting

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TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

Joseph Bates

Director of Procurement, Supply Chain Shared Services / Innovation, HonorHealth The Journal of Healthcare Contracting:

different specialties, cancer centers, radiol-

Why do you believe non-acute,

ogy, etc. Knowing those different leaders

alternate site locations are vital to

and being able to bring them together

our nation’s health care?

when needed to push your initiatives

Joseph Bates: Non-acute, alternate site

forward, and being able to communicate

locations help provide a full continuum

to those different groups, is key.

of care for our health systems. Patients

Many of the staff at non-acute sites

don’t have to go to the urgent care, or

are not supply chain professionals, so

ER, if they have a primary care provider.

keeping the supply chain functions

The co-pays are a lot less, and it allows for

simple will also help promote success.

value-based care where patients become

As an example, our standard ERP is

familiar with care providers that offer an

really more set-up for hospitals and

array of services.

larger acute sites, so I moved non-acute

We’ve also run into a lot of situations

to a more user-friendly portal, which

where a patient goes into a non-acute

gives more of an Amazon type shop-

site and are referred to an acute location

ping experience with immediate order

because of other underlying problems.

feedback, and self-service options. In

So ultimately, it’s doing good for the pa-

surveys, the staff indicated they were

tient that they’re able to go to a primary

excited about the change, because it was

care physician office rather than a CVS

easy to use.

to get their vaccine. Something we’ve

The other thing I’ve found help-

also seen grow quite a bit through the

ful is using locked formularies to drive

pandemic is telehealth, which I think will

purchasing standardization and savings.

start playing a bigger role in that non-

This helps to narrow the scope of avail-

acute care arena.

able products and increases compliance. It’s not just about putting formularies

JHC: What are some keys to success

in; you must manage the formularies. I

for supply chain teams that may be

found the best way to do that is to set

unique to non-acute?

up the appropriate approval processes

Bates: The biggest thing I’ve seen

of formulary changes, when we can

through the different organizations that

make exceptions (i.e., I need to buy this,

I’ve worked with is the understanding that

but I don’t want to add it to the formu-

different leaderships within the non-acute

lary). So allowing for those one-time

area are key to moving initiatives forward.

purchases, but also teaming with the

You typically have a medical group, but

sourcing teams to review for opportuni-

outside of that medical group you have

ties where we can bring in more savings.

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June 2022 | The Journal of Healthcare Contracting

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TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

Again, just simplifying the supply chain processes using analyt-

Bates: In the last two organizations I’ve

ics to monitor item usage, order efficiency, and variances to

worked for there has been an increase

help assure continued success.

in importance and growth of non-acute locations. The way that’s communicated

JHC: What have you and your team learned about

has been different in both, but ultimately,

navigating today’s most pressing disruptions to the

it’s about attracting patients, making sure

supply chain?

you’re taking care of them in the non-

Bates: My primary role is director of procurement, and I also

acute setting, and then when they do need

manage the non-acute sites. I found managing backorders and allocations in a pandemic takes a lot more resources than we were prepared for two or three years ago. Getting the right reports together to help monitor these issues has been helpful. It was evident that non-acute allocations were impacted sooner than what we saw at the hospitals. When we started running into PPE issues early on, it was hitting the non-acute sites a lot faster than it was hitting the acute side. That was amplified because of our continued growth, even during the pandemic. For instance, we doubled infusion beds for cancer treatments, so dealing with the allocations for those increases at the same time became challenging. Then just looking at alternate sourcing, your tier two and tier three suppliers, and who’s going to be your best partner. At HonorHealth we had a need to create a warehouse to bring in additional supplies to help out the non-acute and acute locations, to assure we had the products that we needed to care for the

In addition to finding ways to purchase our different products, we found value in creating an outlet for the clinical users to report concerns with daily huddles.

acute care, the non-acute locations refer them to our hospitals. So we’re keeping the patient within our system so that we can give them the best care possible. Not only have we seen growth and focus, I think we’re also seeing some strategy changes with telehealth. It’s ultimately giving patients easier access to care. JHC: What project or initiative are you looking forward to implementing now or in the near future? Bates: I started at HonorHealth just before the pandemic, and worked on a project of moving the non-acute to a different platform for ordering, to give them a user-friendly Amazon type shop-

patients and to protect our providers too. In addition to finding

ping experience. When the pandemic hit,

ways to purchase our different products, we found value in creat-

it delayed things. But now I’m looking

ing an outlet for the clinical users to report concerns with daily

forward to using the tools that this new

huddles. In our daily meetings we would have all the non-acute

platform gives us: looking at order ef-

locations on a call. We asked questions like: “What are your

ficiencies, looking at opportunities for

barriers?” “Are you looking at any products that you may be run-

savings, and tying down those formu-

ning low on?” With them not having a perpetual inventory, their

laries and using those formularies to

inventory level is out of sight, unless we’re talking to them on a

drive savings opportunities or to create

daily basis and giving them easy access to supply chain. So that

standardization. And then working with

communication really helped.

the non-acute clinical staff to find better ways to track inventory, and give us more

JHC: Has the perception/integration by executive lead-

visibility to some of those products that

ership of alternate sites within a health system or IDN

we lost sight of over the last couple of

changed in the last few years? If so, could you explain?

years amid the pandemic.

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June 2022 | The Journal of Healthcare Contracting

TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

Mona Clark

AVP, Strategic Initiatives, Ambulatory Quality, LifePoint Health The Journal of Healthcare Contracting:

the practices within those markets may

Why do you believe non-acute,

cover a large geographical area. These

alternate site locations are vital

locations can have logistical challenges

to our nation’s health care?

that need careful analysis, so we are

Mona Clark: LifePoint Health’s mis-

working effectively and efficiently to get

sion is Making Communities Healthier.

supplies to the locations when they need

This mission is not just about caring

them. Partnering with our non-acute

for patients when they are ill, but it also

distributor, McKesson, has been crucial

reflects a commitment to caring for indi-

in understanding the complexities each

viduals when they are well and partner-

location may encounter, and their will-

ing with them to protect and enhance

ingness to work through those challenges

their overall health. Non-acute locations,

has been hugely helpful.

like our physician practices, allow for

The pandemic has also strongly emphasized the value of single, enterprise-wide vendor contracts for standardization, clinical quality, and to best leverage supply and market share.

relationships to form and conversations

JHC: What have you and your team

to take place about how each patient can

learned about navigating today’s

maintain or improve his or her health.

most pressing disruptions to the

Preventative screenings for certain can-

supply chain?

cers start in the non-acute locations, and

Clark: The last couple of years have

when the cancer can be diagnosed and

been an unprecedented time, and

treated early, the outcomes are much

disruptions have been challenging to

better. Our practice locations make

predict and sometimes impossible to

significant contributions to the health of

avoid. The ability to be flexible, nimble

their communities and have never been

and pivot our strategy as the environ-

more important to the overall health of

ment changes has been extremely

our nation.

important to our ability to limit the impact to our physician practices

JHC: What are some keys to success

and, ultimately, our patients. We have

for supply chain teams that are

learned that having a close partner-

unique to non-acute?

ship with our distributor helps us stay

Clark: The complexities of the non-

abreast of trends and forecasts in the

acute space are unique in that they are

industry so we can evaluate the poten-

often comprised of varying groups of

tial impact and act accordingly.

providers who are serving communi-

ties and offering multiple levels of care

JHC: Has the perception/integration

across many specialties. Our markets are

by executive leadership of alternate

primarily in smaller communities, and

sites within a health system or IDN

Sponsored by McKesson Medical-Surgical

June 2022 | The Journal of Healthcare Contracting

changed in the last few years? If so, could you explain? Clark: The landscape of alternate sites is constantly changing as more services move away from the acute care setting. This shift in healthcare has made the non-acute sites a key area of focus for our leaders as we strive to meet the future needs of the patients and the communities we serve. The pandemic has also strongly emphasized the value of single, enterprise-wide vendor contracts for standardization, clinical quality, and to best leverage supply and market share.

The last couple of years have been an unprecedented time, and disruptions have been challenging to predict and sometimes impossible to avoid.

JHC: What project or initiative are you looking forward to implementing now or in the near future? Clark: We have a couple of exciting projects planned for this year centered around supply chain standardization and optimization that are focused on improving quality, maximizing contract values, and reducing variability across the enterprise. The first project is around formulary standardization, which will reduce costs and better align our practices. The second is a laboratory testing initiative, which will increase the testing availability in our physician practice space, reducing the number of hand-offs and the potential for delays in care. As an organization, we are always looking for ways to positively impact quality and patient safety, and I am looking forward to the evolving opportunities that arise to do so.

About LifePoint Health Brentwood, Tennessee-based LifePoint Health is a leading healthcare provider that serves patients, clinicians, communities and partner organizations across the healthcare continuum. Driven by a mission of Making Communities Healthier, the company has a growing diversified healthcare delivery network comprised of more than 50,000 dedicated employees, 63 community hospital campuses, more than 30 rehabilitation and behavioral health hospitals and 170 additional sites of care, including managed acute rehabilitation units, outpatient centers and post-acute care facilities. Through its innovation strategy, LifePoint Forward, the company is developing meaningful solutions to enhance quality, increase access to care, and improve value across the LifePoint footprint and communities across the country.

The Journal of Healthcare Contracting | June 2022

Sponsored by McKesson Medical-Surgical

TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

Eric Helliker

Senior Supply Chain Services Non-Acute Program Director, Banner Health The Journal of Healthcare Contracting:

for our non-acute locations in the early

Why do you believe non-acute,

days of the pandemic, and it continues to

alternate site locations are vital

support us today, as we are still facing the

to our nation’s health care?

ramifications of a fractured global supply

Eric Helliker: Non-acute care sites offer

chain. We secured several PPE items in

patients a “one-stop shop” with a wide

our DC, which in turn could be distrib-

array of service lines that include family

uted to our end-users when our normal

medicine, orthopedics, and women’s

distribution channels began to rapidly

services. Non-acute care sites also offer

breakdown. Very early on it became

imaging and lab services, so when provid-

necessary to have multiple distributors

ers order lab work or X-rays, the patient

for equipment as well as supplies.

won’t have to drive to multiple locations to have those diagnostics performed; they

JHC: Has the perception/integration

can simply take a walk down the hall.

by executive leadership of alternate

Essentially, non-acute care sites make

sites within a health system or IDN

healthcare easier for the patient, so life

changed in the last few years? If so,

can be better.

could you explain?

Non-acute care locations were also

must effectively communicate through

Helliker: I believe hospital and health

vital during the pandemic, offering

email and by phone to solve issues from

system leaders have seen how extremely

another point-of-care location for

1 to 100 miles away. For instance, we

valuable and important non-acute loca-

COVID testing, vaccinations, and

had to stand-up multiple COVID test-

tions truly are to the communities they

monoclinal therapies to help ease

ing sites in different states and work by

serve, as well as across the entire health-

some of the pressure on the nation’s

Microsoft Teams or phone meetings to

care continuum. A testament to that

overburdened hospitals.

identify our customers’ needs. We also

fact is that our number of alternate sites

needed to identify vendors in states that

continue to grow year over year.

JHC: What are some keys to success

could provide tents and other rental

for supply chain teams that may be

equipment and supplies. It was quite

JHC: What project or initiative are

unique to non-acute?

a task.

you looking forward to implement-

Helliker: A health system may have nu-

ing now or in the near future?

merous non-acute care locations spread

JHC: What have you and your team

Helliker: We will be working extensively

throughout one state or multiple states.

learned about navigating today’s

over the next several months to reduce

This presents a communication chal-

most pressing disruptions to the

the number of items on our current

lenge. As an example, in an acute facility,

supply chain?

non-acute formulary. Identifying the

if there is an issue on a unit, you could

Helliker: I think we have learned that

right supplies at the right price point will

walk over and speak with someone in-

it helps to have your own distribution

drive cost savings and help improve our

person. In the non-acute care space, you

center (DC). Our DC was a major lifeline

bottom line.

Sponsored by McKesson Medical-Surgical

June 2022 | The Journal of Healthcare Contracting

Hillrom is now a part of Baxter

of Americans are Hypertensive1

Using an all-in-one solution can help increase hypertension detection

hillrom.com/hypertension Virani SS, Alonso A, Benjamin EJ, et al. Heart disease and stroke statistics—2020 update. Circulation 2020; 141: e139–e596. DOI: 10.1161/CIR.0000000000000757 Baxter and Hillrom are trademarks of Baxter International, Inc. or its subsidiaries. ALL RIGHTS RESERVED. APR367102 Rev 1 23-MAY-2022 ENG – US

TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

Thomas Mullins

MBA, CSCP, Purchasing Manager, St. Elizabeth Physicians

It’s common for non-acute sites to have different technology than the hospital, having connectivity across the supply chain is critical in automating, monitoring compliance, and having strategic cost management.

The Journal of Healthcare Contracting:

to achieve key goals. To succeed, leaders

Why do you believe non-acute,

must manage their operational model to

alternate site locations are vital

meet the specific need of the individual

to our nation’s health care?

care setting. This includes vendor and

Thomas Mullins: Non-acute, alternate

product standardization, ensuring cost-

site locations are vital to our nation’s

saving opportunities, staff efficiency,

healthcare because these are the teams

and providing consistent quality of

who serve patients for ongoing and

care. It’s common for non-acute sites

long-term health treatment. The focus

to have different technology than the

must be maintaining good health, not

hospital, having connectivity across the

just treating sickness. As a patient-

supply chain is critical in automating,

centered organization, St. Elizabeth

monitoring compliance, and having

Physician’s goes above and beyond to

strategic cost management. Implement-

provide our patients access to the best

ing a strategic cost management effort

healthcare and experience in effort to

can lead to better financial, clinical,

become one of the healthiest commu-

and operational performance. Through

nicates in America. To aid our efforts

medical/surgical, pharmaceutical,

in delivering this quality care, we are

equipment, and lab, supply chain teams

focused on introducing innovative

should help manage the product and

treatments, technology, and processes

process. These teams are key to involv-

to improve the overall health and well-

ing necessary stakeholders to ensure the

ness of our region. We would not be

best product, application, and utiliza-

able to impact a patient’s overall health

tion is met through necessary training

and well-being without our non-acute,

and approval.

alternate site locations as a resource for our communities.

JHC: What have you and your team learned about navigating today’s

JHC: What are some keys to success

most pressing disruptions to the

for supply chain teams that may be

supply chain?

unique to non-acute?

Mullins: The key to navigating today’s

Mullins: In non-acute settings, there is

most pressing disruptions to the supply

no one-size-fits-all model. Due to the

chain is collaboration. In order to have a

complexity and fragmentation across

healthy and agile supply chain, we work

the many care settings, supply chain

with other departments and organiza-

teams play a vital role in leading organi-

tions to meet the needs of the customers

zational change and executing initiatives

and patients. Keeping an open line of

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June 2022 | The Journal of Healthcare Contracting

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TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

communication with our stakeholders to depicting accurate in-

research and care delivery innovations

ventory management. By utilizing our supplier and distributor’s

will enhance patient outcomes. It will

expertise for example, we’re able to leverage their information

be important to further develop tech-

on usage history, current and upcoming supply chain shortages,

nology and skills to enhance opportu-

and allocation changes. This allows our team to analyze order-

nities for optimizing treatments based

ing trends, set appropriate par levels, and structure an ideal formulary compliance. We have gained much better understanding of quality over cost through the disruptions to supply chain. Although it is advantageous to make purchasing decisions based on GPO compliance or best cost, we factor in delivery, storage, and service into our operations. By establishing a project plan and aligning with our partners, we utilize a one-voice approach to have greater visibility to deliver better care. JHC: Has the perception/integration by executive leadership of alternate sites within a health system or IDN changed in the last few years? If so, could you explain? Mullins: Adaptation to process planning, project management, and stakeholder alignment has been crucial to the suc-

Adaptation to process planning, project management, and stakeholder alignment has been crucial to the success of our health system.

on clinical guidelines. JHC: What project or initiative are you looking forward to implementing now or in the near future? Mullins: We have implemented and continue to evolve our inventory system with our distribution partner, McKesson. As providers and suppliers work toward the mutual goal of improved patient care, we continue to find better ways to align incentives to succeed. The value of clean, accurate data in healthcare is not only transactional, but should be

cess of our health system. Seeking out experienced non-acute

leveraged business wide to understand

information and assessments of operations has assisted in

where the real value lies. By utilizing

process automation, standardization, and allowed our team

data, supply chain professionals can

to make more informed decisions. By streamlining processes

better anticipate what will be needed

across non-acute care settings, the whole health system

and not falter to product discontinua-

benefits from better cost management and improved patient

tion or backorders.

care. For example, during the COVID-19 pandemic, in-person

Our future path leads to continue

care declined, in favor of telemedicine services. However,

having a clinically integrated supply

satisfaction with care delivery rose. Healthcare supply chain’s

chain, where we work closely and side

future will be extended past the walls of in-patient/out-

by side with our physicians. Work-

patient care to wherever the patient is physically located.

ing closely with our team to provide

As we gain a better understanding of practice patterns, new

guidance, support, and knowledge on product price points, outcomes, and alternatives. Allowing for continuous improvements, idea sharing, and com-

About St. Elizabeth

paring products/outcomes to make

Home to more than 10,000 associates and a medical staff of nearly 1,200 physicians and advanced practice providers, St. Elizabeth is deeply rooted in the communities it serves. St. Elizabeth has six facilities currently operating throughout Northern Kentucky and Southeastern Indiana – Covington, Dearborn, Edgewood, Florence, Ft. Thomas and Grant – as well as 169 St. Elizabeth Physicians specialty and primary care offices located throughout Kentucky, Ohio and Indiana.

continues to grow as a pillar of the

informed decisions. As supply chain organization, our efforts to focus on standardizing care must continue to be consistent from a patient perspective. Implementing and leading change to help determine not only the best price, but the best outcomes, will help change long-standing inefficient processes.

Sponsored by McKesson Medical-Surgical

June 2022 | The Journal of Healthcare Contracting

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TOP NON-ACUTE CARE SUPPLY CHAIN LEADERS

Dawn Wells

Senior Director, Supply Chain, Northwell Health The Journal of Healthcare Contracting:

multi-site/multi-specialty groups, imag-

Why do you believe non-acute,

ing centers, oncology centers, ASCs,

alternate site locations are vital

hospice, and more. One of the first actions we took to

to our nation’s health care? Dawn Wells: Non-acute and alternate

improve communication was to charter a

site locations are vital to healthcare be-

Value Analysis Team (VAT) with regional

cause they provide access to preventative

and service line representation as well

medicine to all communities, including

a physician advisory oversight group.

those that have suffered from barri-

The VAT has served as a conduit for

ers to quality care. It allows healthcare

multiple savings initiatives, and process

organizations to meet the patient where

improvements while allowing for the

they are and realize greater impact on

promotion of activities across the ambu-

communities to achieve health equity. As

latory network. The VAT also promotes

health systems and IDNs continue to ex-

collaboration between practice manage-

pand their footprint into non-acute care,

ment, clinical leadership, and supply chain

patients can benefit from a continuum

to support the continuum of care from

of care that is coordinated across several

inpatient to outpatient.

specialties. Northwell Health’s shared

Through our value analysis clinical teams, we have created and continue to manage substitution lists. We also understand how important it is to have full transparency of our suppliers and their sourcing methods and to have open lines of communications.

Collaboration with both internal and

services model allows for our supply

external stakeholders is another key to

chain to coordinate with both clinical

success. Over the years we have created

and non-clinical leadership to make sure

strategic relationships with key vendors

that we are meeting the needs of our

to provide support for our non-acute

physicians, patients, and the communities

locations which allows ease of ordering

we serve.

and supports the procure-to-pay model outside of our system ERP.

JHC: What are some keys to success

Flexibility is also a major component

for supply chain teams that may be

in achieving success in non-acute opera-

unique to non-acute?

tions. Historically, healthcare supply chain

Wells: Communication, collaboration,

has been hospital based, which focuses on

and flexibility are all keys to success

contracting and group/bulk purchasing.

in the non-acute supply chain space.

Understanding the nuances of purchas-

Northwell Health’s ambulatory and

ing in low unit of measure, class of trade

physician office network is comprised

restrictions and GPO rostering are all

of 14+ specialties spanning over 830

critical components to success and require

locations. These locations are a mix

a great amount of flexibility to support

of single provider physician practices,

clinicians and patients.

Sponsored by McKesson Medical-Surgical

June 2022 | The Journal of Healthcare Contracting

JHC: What have you and your team

JHC: Has the perception/integration by executive

learned about navigating today’s

leadership of alternate sites within a health

most pressing disruptions to the

system or IDN changed in the last few years?

supply chain?

If so, could you explain?

Wells: COVID and current supply chain disruptions have forced IDNs to adjust to a rapidly changing environment. Historically, we have been able to maximize savings by tightening formularies and utilizing on demand sourcing. We learned that we needed to be more flexible with our product and vendor selection and make sure that alternatives are always available to meet the needs of our physicians. Through our value analysis clinical teams, we have created and continue to manage substitution lists. We also understand how important it is to have full transparency of our suppliers and their sourcing methods and to have open lines of communications. We have increased the days of supplies on

We were lucky to have a mature vendor and supplier risk management team and that allowed us to more quickly assess new suppliers that came into the marketplace.

Wells: Executive leadership at Northwell Health has been very intentional with the integration of the ambulatory and physician practice enterprise. Very early on in our journey, business development assembled a transitions team to coordinate cross functional activities related to practice acquisitions and new facility openings. Each acquisition and site opening is assigned a project manager who works closely with a member of my team to track and coordinate all integration activities. This methodology, supported by senior leadership, has been instrumental in informing our team growth and organizational operations. JHC: What project or initiative are you looking forward to implementing now or in the near future? Wells: I am absolutely looking forward to supporting the continued growth of our ambulatory network in many different areas. We are relaunching many of our VAT activities that were put on hold due to COVID and I am looking forward to working with our teams to achieve savings and

hand at our Integrated Distribution

create processes to align our non- acute facilities to our

Center, which allows our distribution

GPO agreements. I am extremely excited about our sustain-

center to support our non-acute

ability and supplier diversity program. We are embarking

locations for back ordered items

on an initiative to “green the ambulatory” which will serve

when necessary. We were lucky to

as an opportunity to align with system initiatives around

have a mature vendor and supplier

the health impacts of climate change. I am a champion

risk management team and that allowed

for supplier diversity and have been very lucky to lead

us to more quickly assess new suppliers

and grow our supplier diversity programs for the past

that came into the marketplace. Our

10 years. Expanding our geographical footprint puts us in

existing efforts around sustainability,

a position to very intentionally engage with suppliers that

supplier diversity, and impact spending

reflect the communities that we serve, and in doing so, we

allowed us to quickly partner with

can have an economic impact on the communities that need

local suppliers.

it the most.

The Journal of Healthcare Contracting | June 2022

Sponsored by McKesson Medical-Surgical

SUPPLY CHAIN

Operation Warp Speed Paul Mango, former Deputy Chief of Staff for Policy HHS, discusses the success of the public-private collaboration to deliver COVID-19 vaccines.

Paul Mango, the deputy chief of staff for policy for the U.S. Department of Health and Human Services (HHS) from 2019 to 2021, joined Share Moving Media’s Scott Adams for a Q&A on Operation Warp Speed (OWS), a public-private partnership to facilitate and accelerate the development, manufacturing and distribution of COVID-19 vaccines, therapeutics and diagnostics. Mango served as the formal liaison for OWS and has written a new book called Warp Speed: Inside the Operation That Beat COVID, the Critics, and the Odds. They also discussed the Strategic National Stockpile (SNS) and Project Airbridge, a program created to shorten the amount of time it took for U.S. medical supply distributors to bring PPE and other critical medical supplies into the U.S. during the initial COVID-19 pandemic response.

Scott Adams: It was really unique to watch our industry come together, even competitors working side by side (during the initial COVID-19 pandemic response). Your team had a ton to do with that. Talking about the Strategic National Stockpile, in those early days of the pandemic when you were developing strategy on how to collaborate, you worked specifically with medical and supply chain distributors. What were the potential shortages during that time?

June 2022 | The Journal of Healthcare Contracting

Paul Mango: All hell was breaking loose.

medical supply company distributors. It

the allocation of 50% of whatever we

But exceedingly early in the pandemic, in

was McKesson, Henry Schein, Quidel,

picked up. Our ability to take a con-

February 2020, when we started experi-

Abbott and Owens & Minor. Cardinal

strained supply base and redirect it to

encing hospital admissions and then some

was very instrumental. Great, iconic

the hotspots was crucial to the long-

of the initial fatalities here in the U.S., I

American companies that had rights to

term success. These medical suppliers

called six or seven large health systems

much of the PPE in China.

and distributors were patriots. They

that were treating these patients because

Wuhan, China, ironically, was where a

exhibited no self-interest and were all

we wanted to know what the supply con-

lot of PPE was manufactured and they had

sumption was associated with a COVID

to shut down their factories for six weeks

patient in the early days. It was a 10-day

during the early days of COVID. When

(DPA) Title VII, which permitted normal

length of stay on average.

they resumed production, they had been

competitors to collaborate during this

Providence in Seattle had some of the

a team. We used the Defense Production Act

filling up their warehouses with stuff these

time of a public health emergency. One

first cases, and the clinical medical direc-

medical supply companies owned. If they

of the ways they collaborated was, along

tor said they were going through 350 N95

put them on the normal transportation

with Palantir Technologies, which is a

masks per patient over a 10-day length

route on large container ships coming back

great information technology company,

of stay. We started doing the math. Our

to the U.S., it would’ve taken 45 days to get

creating an information technology sys-

Strategic National Stockpile had 12 mil-

here, unloaded and put on trains or trucks

tem giving us line of sight into each N95

lion N95 masks. You can start to figure

from the West Coast. It could be 55 or 60

mask, gown and booty from factory to

out that after about 40,000 patients the

days – two months.

warehouse to where it was being shipped

cupboards were going to be bare, and we

in the country.

were expecting a lot more.

This decision support system was

We had to develop a strategy quickly

phenomenal. Distributors had never had

on how we were going to get supplies to

that on their own, and now we have one.

those hospitals and health systems that

It’s really a national asset and that permit-

needed them most. We put a team to-

ted us to reallocate.

gether to understand where the PPE was

Again, the first principle was Ac-

manufactured. You had masks, gowns,

celeration. That was getting things here

booties and Nitrile gloves.

overnight that would normally take two months. Once we did that, it shifted

What we learned was the vast majority of

around using this IT system to send

these were manufactured outside of the

more gowns to Mount Sinai in New

U.S. Nitrile gloves were 98% outside of

York, for example, because New York

the U.S. N95 masks – we actually made

was blowing up with cases. That meant

quite a few. But when it came to gowns, they were sewn in Mexico or in South

Paul Mango

America. We developed a strategy with

Acceleration (Project Airbridge) was a function of us working with these great

some of their other customers, but those would be customers that didn’t have the

four major components:

1. Acceleration 2. Reallocation 3. Preservation 4. Repatriation

these suppliers would have to short

same need at that time. We decided to send 747 cargo jets over

The third part of our strategy was

to the warehouses in China and this was

Preservation. We decided to get hospi-

the fundamental nature of the Airbridge.

tals and health systems on the phone

The medical distributors would still own

and the American Hospital Association

100% of the product we picked up, but

helped us. We had 2,000 participants

in return for us financing the transporta-

from hospitals around the U.S. listening

tion, the companies permitted us to direct

to those leaders in the hospitals that

The Journal of Healthcare Contracting | June 2022

SUPPLY CHAIN

were treating COVID patients. This is

distributors at 8 a.m. The CEOs were on

unprepared for what hit us. The mission

where COVID wings came about. Hos-

the phone calls. They were committed.

of that stockpile had a lot to do with

pitals created COVID wings to put the COVID patients together.

The private sector knows best what

chemical, biological and nuclear warfare.

to do. We needed to elicit their input and

In the early days of the Trump administra-

ideas. Our role was to coordinate, not

tion, the biggest threat to this country in

Repatriation to bring production back to

tell them what to do. These calls were

2016 through early 2018 was North Korea.

the U.S. Close to $500 million worth of

them informing us on how to get this

grants were issued to expand domestic

done. We’d have morning calls and late

that would protect America against

manufacturing capacity of masks, gloves

afternoon calls every day. We had the

nuclear threats. We weren’t prepared for a

and other things. A lot of this was off-

right leadership at the table, and it was

biological threat like this. But when I left,

shored 20 years ago when labor arbitrage

real-time problem solving. We got into a

we had close to 300 million N95 masks in

opportunities were significant.

rhythm, and once there, it was fantastic.

the stockpile.

The last part of our strategy was called

Many resources went into antidotes

Two things have happened in the

FedEx, UPS and others helped us with

interim period. One is worldwide labor

the Airbridge. Great, iconic American

the past, but the government dramatically

costs have normalized a bit. It’s not

companies stepped up.

increased demand for certain supplies

I hope we don’t repeat the mistakes of

equal, but it’s normalized a bit. Secondly, after we offshored a lot of this manufacturing, Asian countries applied automation techniques and equipment to manufacture it. We learned that the U.S. was actually a cost advantaged place to manufacture it 20 years later, particularly

The private sector knows best what to do. We needed to elicit their input and ideas. Our role was to coordinate, not tell them what to do.

Nitrile gloves. The base raw material for Nitrile gloves is petroleum, and it’s much cheaper in Louisiana, Mississippi and

In Fall 2020, we were prioritizing

during the pandemic. Unfortunately, we

Texas than it is in Vietnam. There was

for vaccinations and there was a debate

saw this with testing too, and once that

a potential cost advantage in bringing

about vaccinating the elderly and most

demand goes away, the supply goes away.

this manufacturing back, but an initial

vulnerable first or vaccinating the

Then it’s exceedingly difficult to respond

capital investment in the equipment was

healthcare workers first. Deborah Birx

to the next pandemic. The federal govern-

necessary to automate it, and that’s what

said that out of 20 million healthcare

ment needs to continue to fund the pres-

we funded.

workers in the U.S., only 200,000 had

ence of idle capacity that is warm and can

been infected at that time. People who

be hot very quickly.

Adams: Talk about Defense

are in contact with COVID patients ev-

Collaboration needs to take place

Production Act Title VII that allowed

ery day weren’t infected. That’s because

between the Strategic National Stockpile,

national distributors to work

of the success of Airbridge and these

medical supply distributors and manufac-

together early on.

companies. We got PPE to the right

turers to ensure it’s in place and pressure

Mango: Early in the pandemic, HHS

place at the right time.

test it multiple times a year. The federal

collaborated closely with FEMA, which

government is going to have to pay for

is an expert at responding to disasters

Adams: Give us a couple lessons you

that, but it’s significantly cheaper than

– floods, hurricanes or tornadoes. They

learned and some things that we

the trillions of dollars of lost economic

had representatives distributed across 10

might be able to avoid if we face this

growth because we weren’t prepared.

regions in the U.S. as logistical hubs. I

again, which we probably will.

was at FEMA at 7:30 a.m. every morning

Mango: Coming back to the Strategic

in an emergency like this is to enable

and we had our initial call with these

National Stockpile, we were fundamentally

the private sector to be successful. It

Lastly, the federal government’s role

June 2022 | The Journal of Healthcare Contracting

depends on the private sector to deliver

It had a number of principles around

But Peter Marks (with the FDA) made

success. The government enables, the

governance, doing things in parallel and

a pledge of having an answer in 14 days

private sector delivers.

assuming financial risk, and spreading

on any data he received and any applica-

our investment risks across three tech-

tion he received from EUA. He had his

Adams: I want to shift gears and

nology platforms – mRNA, viral vector

staff working in three shifts, eight-hour

move to Operation Warp Speed.

and protein subunit. Another especially

shifts, 24 hours a day. Typically, after

Please tell us how it started.

important principle was bringing in pri-

authorization from the FDA is when a

Mango: In the early days of the pan-

vate sector expertise as our manufactur-

pharmaceutical company starts manufac-

demic, even in January 2020, the initial

ing lead. That’s how it started, and

turing because they don’t want to put a lot

stages of Operation Warp Speed had

the rest is history.

of effort and resources into it before they

begun. Moderna was working with the NIH before the pandemic broke out on using mRNA technology to develop cancer therapies. When the viral sequence – the DNA sequence of the coronavirus – was posted on Jan. 10, 2020, Moderna and the NIH collaborated on using mRNA technology to develop a vaccine

We were already manufacturing, and it’s the first time in history that there were millions of doses of vaccines available and being shipped 24 hours after the FDA authorized use. That was one principle.

very quickly. It had never been done before. mRNA is a new vaccine technology. In

Adams: March 28 and March 29,

know it’s going to be approved. We took

about 10 days, they had a good vaccine,

2020, is when this was outlined?

as much of that as possible. Phase one,

unbelievably. They didn’t know it. We

Mango: That’s correct. Now, there’d

phase two and phase three clinical trials

didn’t know it. But what was developed

been some early work done on screening

were measured in days, not months. We

in those first 10 days is basically what

the world for vaccines and investment in

used a lot of the NIH’s clinical trial sites.

Moderna eventually distributed. At

Moderna, but it wasn’t a coherent initiative.

the time, there were about 95 vaccine

It didn’t have a governance structure or

that weren’t necessarily patients. A lot of

candidates that were being developed

strategy. Secretary Azar got it right away

them were healthy. Then, we began manu-

around the world. We started funding

and said, this needs to change dramatically.

facturing in the Summer 2020. Remember,

a number of companies to accelerate that development. Secretary Alex Azar and I sat down

We helped recruit individuals for trials

the first EUA was granted on Dec. 11. We Adams: Talk about some of those

were already manufacturing, and it’s the

guiding principles that help with the

first time in history that there were millions

with the FDA and the Office of the

effort of doing that.

of doses of vaccines available and being

Assistant Secretary for Preparedness

Mango: The most important one was

shipped 24 hours after the FDA autho-

and Response (ASPR). Secretary Azar

performing activities in parallel as much

rized use. That was one principle.

mapped out the strategy for Operation

as possible. The typical approach for a

Warp Speed, and everything that used

pharmaceutical company is going through

fascinating. I spent 25 years at McKinsey

to be done in series would now be done

a phase one trial, examining those results,

& Co. leading transformational efforts

in parallel. The financial risk associated

starting a phase two trial a couple of

in large corporations, and it’s a remark-

with that, like starting manufacturing

months or even a year later, examining

ably similar principle. When you have an

even though we didn’t know whether

those results, then going into phase three,

emergency like this in any organization,

the vaccine would be authorized by

large scale human trials, and finally taking

you can’t let the bureaucracy bog you

the FDA, would be assumed by the

it to the FDA. The FDA could take six

down. What we did was set up an Opera-

federal government.

months to evaluate data.

tion Warp Speed board co-chaired by

The Journal of Healthcare Contracting | June 2022

When it came to governance, it was

SUPPLY CHAIN

Secretary Mark Esper at the Department of Defense and Secretary Alex Azar. We had a number of physicians and some White House representatives on it. We met every Friday morning to make decisions. If we needed any support beyond that board, we had a direct line to the Oval Office. That took weeks and months off

These vaccines took different sized needles and syringes. They had to be stored and distributed under different conditions. The complexity of the supply chain issues would grow exponentially as you added vaccine candidates.

of contracting issues and defense product act use issues. It was all action. That was an especially important principle. The third one was the venture capital

syndicated it with the board, and we evalu-

out because America’s public sector infra-

ated each candidate on three dimensions –

structure is dilapidated at best. They don’t

mindset from Moncef Slaoui. He’s the

the probability they could get EUA before

have electronic scheduling of patients and

most successful vaccine developer of our

year’s end, their ability to scale up manu-

don’t know how to call patients back for

generation. He brought 14 vaccines suc-

facturing and their effectiveness in those

their second doses. We looked into all of

cessfully to market at GlaxoSmithKline.

over age 65. We knew in Summer 2020

that, and we had an underlying belief in

But he’s a strategist at heart and he laid

this virus disproportionately affected

the private sector.

out the candidate investment portfolio.

those with certain underlying conditions

Some people in the scientific commu-

and the elderly. We used those criteria and

Adams: What were some lessons

nity were saying, ‘get every horse you pos-

performed a cumulative probability analysis.

learned through this?

sibly can in the race.’ Invest in 20 of these

The cumulative probability analysis

Mango: This is an uplifting story about

things. However, what those scientists

suggested a 75% probability of having

America. Amid all this divisiveness, intol-

didn’t understand and Moncef Slaoui and

at least one safe vaccine manufactured at

erance and political divisions, hopefully

General Gus Perna did was that the more

scale and effective in those over age 65

Americans are proud of how exceptional

you invest in, the less probability you have

before year’s end. There was a 32% chance

America is. It’s the only country in the

of getting through clinical trials. You need

we’d have two and less than a 10% chance

world that offered vaccines to each of

30,000 people in each clinical trial. If you

we’d have three. We wound up with two.

its citizens by April 2021. It’s an extraor-

had 20 different trials going on, that’s

We were considering a seventh candi-

dinary level of innovation, industrial

600,000 Americans. You have potentially

date, and every candidate we invested in

dexterity and nimbleness, and the talent

a shortage of raw materials. You would

was about $2.5 billion.

and capability that we have.

add to the complexity of distribution. These vaccines took different sized

We ran the seventh company through

A lot of people disparage large corpo-

our probability analysis, and it only took

rations. But in times of need, there’s no

needles and syringes. They had to be stored

the 75% probability to 78%. It wasn’t

better place to be than within American

and distributed under different conditions.

worth the leadership dilution and the com-

industry. Without the development that

The complexity of the supply chain issues

plexity in the supply chain. We used that

had taken place decades before mRNA

would grow exponentially as you added vac-

tool successfully to help us make decisions.

technology, warehouse management,

cine candidates. We limited ourselves to six,

The CDC had a strong preference

distribution management, information

and potentially seven, but we said no more

for using the public health infrastructure

technology, and tens of thousands of

than that across three technology platforms

to distribute and administer vaccines.

clinics, we never would’ve gotten through

and two candidates in each platform.

But General Perna in the Army Material

this. Let’s not disparage our large corpora-

In August 2020, we performed ‘trust but

Command said, ‘we prefer CVS, Walgreens,

tions for being profitable because they

verify.’ Moncef had laid out his candidates,

Walmart, UPS and FedEx,’ and that won

developed unprecedented capabilities.

Editor’s note: To listen to the complete conversation, visit http://repertoiremag.com/paul-mango-podcast.html

June 2022 | The Journal of Healthcare Contracting

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approach across many global industries.

factures IV bags not made with DEHP or PVC plastic. A growing body of evidence shows

Health system supply chain executives

“Manufacturing methods are often

that Americans receiving care in hospi-

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linked to a growing list of illnesses and

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for B. Braun Medical Inc. (B. Braun).

Products not made with DEHP help

“Sustainability includes producing zero

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neonatal patients, pregnant and lactating

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women, and patients receiving certain

Sustainability has been fundamental to

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business for B. Braun for decades. The

PVC contains vinyl chloride which

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says it’s not eco-friendly either. “We’re

of its direct supplier spend against global

assessing our products for changes in

sustainability standards.

materials, especially in the case of orthophthalate plasticizers like DEHP.”

B. Braun is reviewing its entire portfolio of products and focusing on

B. Braun containers and bags for IV

eliminating chemicals of concern, such

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as Diethylhexyl phthalate (DEHP) or

made with DEHP or PVC. The company is committed to reducing DEHP and PVC

polyvinyl chloride (PVC) plastic. We are continuously working with our suppliers

This takes significant investment.

across its’ extensive product portfolio. “We’re constantly reviewing our product

to identify short-term safer materials. The

B. Braun has invested more than $1 billion

changes in product formulation will often

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CA, Allentown, PA and launch its latest

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1 OEHHA Science for Health California. Proposition 65 Warnings Office of Environmental Health Hazard Assessment: Di(2-ethylhexyl)phthalate (DEHP). June, 2017. https://www.p65warnings.ca.gov/factsheets/di2-ethylhexylphthalate-dehp

June 2022 | The Journal of Healthcare Contracting

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TRENDS

No Surprises Act is Flawed: Doctors They support the concept but not the proposed resolution process for payment disputes.

The No Surprises Act of 2020 has gotten off to a rocky start since it went into effect on January 1. Few people oppose the concept, that is, protecting patients from receiving bigger-than-anticipated bills from their provider following a procedure, or totally unanticipated bills from out-of-network providers (e.g., emergency room physicians, orthopedists, radiologists) who participated in their care.

June 2022 | The Journal of Healthcare Contracting

at in-network facilities, and services from

Enforcement of the “good faith esti-

out-of-network air ambulance service

mate” requirement will expand over time,

providers. (People covered by Medicare

according to legal firm Reed Smith. In the

and Medicaid already have these protec-

current first phase, providers must provide

tions.) It establishes an independent

such an estimate inclusive of their own

dispute resolution (IDR) process for pay-

charges. Effective Jan. 1, 2023, however,

ment disputes between plans and provid-

they will have to include co-provider esti-

ers. It also provides dispute resolution

mates, such as out-of-network emergency

opportunities for uninsured and self-pay

services. In “Phase 3,” whose effective date

individuals when they receive a medical

has yet to be determined, good faith esti-

bill that is substantially greater than the

mates – including provider and co-provider

“good faith estimate” they receive from

estimates – will be required for all patients

their provider.

regardless of their insurance status.

“ Physicians will have little to no leverage to negotiate contracts above whatever an insurer calls the ‘median,’ which itself is subject to manipulation by the insurers.” Before the No Surprises Act, people

Rather, the primary point of con-

Doctors object

with health insurance who received care

Under the law, once a patient with insur-

from an out-of-network provider or an

ance initiates a dispute over payment,

out-of-network facility, even unknow-

the matter is paused pending resolution.

ingly, would often be on the hook for the

Generally, the IDR process will follow a

difference between the billed charge and

“baseball-style” approach, following these

the amount paid by their health plan. (This

steps, according to the American College

practice, called “balance billing,” is banned

of Emergency Physicians:

in some states.) An unexpected balance bill

1. The out-of-network physician

tention has been the process by which

from an out-of-network provider is now

submits claim to the patient’s in-

payment disputes between out-of-network

considered a surprise medical bill.

surer. The patient is only respon-

providers and commercial payers will be

For people without insurance or who

resolved regarding claims filed on behalf

self-pay, the No Surprises Act assures

of people covered by group and individual

they will get a good faith estimate of how

health plans.

much their care will cost prior to delivery

sible for any costs as if they were provided in-network, and is now out of the middle.

2. Physician/group can dispute the

of the service. For services provided in

amount during a 30-day open

ple covered under group and individual

2022, patients can dispute a medical bill if

negotiation period.

health plans from receiving surprise

final charges are at least $400 higher than

medical bills when they receive most

the good faith estimate, but they must file

take the dispute to IDR using

emergency services, non-emergency

a dispute claim within 120 days of the

an online portal. They select an

services from out-of-network providers

date on their bill.

arbiter from a pre-vetted list of

The No Surprises Act protects peo-

The Journal of Healthcare Contracting | June 2022

3. If that fails, either party can

TRENDS

IDR entities. Both parties must

unequal weight to the Qualified Payment

sufficient to determine the appropriate

pay the IDR fee upfront – $200 to

Amount (QPA), tilting the process unrea-

IDR entity to oversee a payment deter-

$500 for one claim; $268 to $670

sonably in favor of insurance companies.

mination. Underlying these matters is a

for “batched” claims of similar

While a relief to doctors’ groups, several

concern that there needs to be disclosure

services with the same insurer.

are still jittery.

of the IDR entity’s record if the Depart-

(The “winner” of the dispute

ments detect a pattern of consistently

will be refunded its fee.)

4. Each party submits offer for

favoring one side or the other.

Physicians’ stance

“We encourage the Departments to

reasonable payment within 10

Share Moving Media received e-mailed com-

consider the long-term impacts that the

days. Those offers must include

ments about the No Surprises Act from

Provider-Patient Dispute Resolution

the Qualified Payment Amount

the American Association of Orthopaedic

process may have on self-pay and unin-

(calculated as the median in-

Surgeons (AAOS), American College of

sured patients, particularly the under-

network rate), information on

Emergency Physicians (ACEP) and Ameri-

represented communities it is, in part,

the physician’s training and

can Society of Anesthesiologists (ASA).

intended to serve. While the monetary

experience, and a description of

threshold to access the provider-patient

the complexity of the procedure

Douglas W. Lundy, MD, MBA, FAAOS,

dispute resolution process was care-

or the medical decision-making

Advocacy Council Chair, American

fully considered during rulemaking, the

associated with it.

Association of Orthopaedic Surgeons

time patients will have to spend going

5. The impartial reviewer evaluates

“AAOS believes that the patient protec-

through the process may prove prohibi-

submissions from provider and

tions afforded by the No Surprises Act

tive or exclusionary.”

insurer, then chooses one of the

are vital to improving access to care.

two payment amounts within 30

While the manner in which the law

Laura Wooster, senior vice president,

business days.

was interpreted and subsequently final-

advocacy and practice affairs, Ameri-

6. The “loser” makes the other side

ized by the Departments is beyond

can College of Emergency Physicians

whole and pays for the IDR fee

the scope of the legislation that was

“Emergency physicians have consistently

within 30 calendar days.

passed with the support of AAOS, we

advocated in support of solutions to

remain committed to ensuring that our

stop surprise bills, promote transparency,

The regulations as implemented

patients have access to the care they

and protect patients since earnest discus-

allow arbiters to assume that the correct

need and are held harmless for finan-

sions about this issue began in Congress

amount for an insurer to pay the doctor is

cial burdens that extend beyond their

four years ago,” she said. “The ruling in

the median amount usually paid for that

in-network cost-sharing.”

Texas is a strong step in the right direc-

service in that geographic area. Doctors’

Despite the February ruling in favor

tion and one of the clearest indications

groups argue that the text of the law

of physicians in the Texas Medical

to date that policy granting unequal

precludes such a presumption and that

Association’s lawsuit, Lundy said that

weight to the qualified payment amount

other factors must be given equal weight,

AAOS remains concerned with aspects

(QPA) directly contradicts the language

including the provider’s training, quality

of the IDR process. For example, the

in the No Surprises Act. It also reaffirms

of outcomes, patient acuity or complexity

four-business-day time frame for initiat-

the congressional intent of the law as

of services provided, and teaching status

ing IDR following the end of the open

noted in a November 2021 letter to the

and case mix of the facility where services

negotiation period may be unreasonable

Administration signed by more than

were provided.

should circumstances beyond the control

150 members of Congress.

In February 2021, a federal judge in

of the physician to meet the deadline

Texas ruled in favor of the Texas Medical

arise, he said. “Likewise, we are con-

and revises its guidance on IDR imple-

Association, deciding that the No Sur-

cerned that the timeline for the parties to

mentation, ACEP is hopeful that

prises Act implementation did indeed give

jointly choose an IDR entity may not be

the department changes the policy

“As HHS assesses its legal options

June 2022 | The Journal of Healthcare Contracting

permanently so that insurers are dis-

into effect in many states for more than 20

contracts above whatever an insurer calls

couraged from narrowing networks,

years.” However, even with the favorable

the ‘median,’ which itself is subject to

canceling contracts and pursuing tactics

outcome of the current lawsuits, “the over-

manipulation by the insurers.”

that make it harder for patients to ac-

all process will likely drive down physician

cess lifesaving emergency care.”

payment over time. Insurers will have the

federal government is now regulating

ability to eliminate any contracts above the

contracts between private parties in a way

Randall M. Clark, M.D., FASA,

median, creating an immediate effect on

that has never been done before. This ex-

president of the American Society

at least half of physician contracts.

tends beyond asserting the parameters of

of Anesthesiologists

“It won’t matter in the future if physi-

The public should recognize that “the

how contracts should be managed, which

“The ASA has long maintained that patients

cians are in network or out of network.

one could argue is very appropriate, and

should be held harmless when there are

Health insurers will be able to treat both

now extends into what one private party

disputes between physicians and insurers,”

groups exactly the same. Physicians will

pays another. This is unprecedented, in

he said. “We have had the ability to put that

have little to no leverage to negotiate

our opinion, and fraught with hazard.”

Hospitals wary of No Surprises Act Doctors aren’t the only ones who are disgruntled with the No Surprises Act. The nation’s hospitals have their own beef, citing the potential burden they face providing “good faith estimates” for services provided people without insurance or who self-pay. In a March 7 letter to Kathleen Cantwell, director, Office of Strategic Operations and Regulatory Affairs, Centers for Medicare & Medicaid Services, AHA Senior Vice President Ashley Thompson wrote, “Many hospitals already delivered pre-care estimates to uninsured and self-pay patients, but the new timeline and format requirements necessitated workflow and other operational changes, including from even the most sophisticated hospitals. While these efforts have generally allowed hospitals to meet the requirements in place today, our members report that the ongoing burden is significant. The estimates regularly take between 10-15 minutes to produce, and though hospitals are looking at ways to introduce additional automation, it will be difficult to fully automate given the individualized nature of the estimates.”

AHA expressed further concern about yet-to-beimplemented rules for good faith estimates set to become effective on Jan. 1, 2023. At that time, providers will be expected to include projected charges from unaffiliated providers or facilities. “There is currently no method for unaffiliated providers or facilities to share good faith estimates with a convening provider or facility in an automated manner,” wrote Thompson. “In order to share this information, billing systems would need to be able to request and transmit billing rates, discounts and other necessary information for the good faith estimates between providers/ facilities. This is not something that practice management systems can generally do, since billing information is traditionally sent to health insurers and clearinghouses, not other providers/facilities. “We urge HHS to refrain from enforcing the comprehensive good faith estimate requirement until a technical solution for exchanging this information is developed and implemented across all providers.”

‘There is currently no method for unaffiliated providers or facilities to share good faith estimates with a convening provider or facility in an automated manner.’

The Journal of Healthcare Contracting | June 2022

CYBERSECURITY

BY DANIEL BEAIRD

Heightened Cybersecurity Awareness The healthcare sector was the victim of more ransomware attacks than any other sector in 2021.

However, according to a cyber readiness report by cybersecurity company Trellix that surveyed 900 cybersecurity professionals from across critical infrastructure sectors in April, the healthcare industry is woefully underprepared to defend against cyberattacks.4 Nearly three-quarters (74%) of healthcare providers in the report admitted that they had not fully implemented sufficient software supply chain risk management policies and processes. The healthcare sector particularly noted underinvestment as a contributing factor. While 83% of healthcare services Russia’s invasion of Ukraine has marked Europe’s largest refugee crisis since

respondents claimed to have implemented

World War II with more than 6 million Ukrainians fleeing the country.1 Meanwhile, the war

some degree of software supply chain risk

in Ukraine has U.S. health systems and supply chains on high alert for cybersecurity breaches.

management policies and processes, the

Rapid integration of new technologies during the pandemic like telemedicine and

sector significantly trails other CIPs in fully

remote monitoring technology are heavily relied on now. But the sector is susceptible to

implementing these measures. Difficult

cyberattacks due to poor cybersecurity infrastructure.

implementation (92%), little oversight on cybersecurity products themselves (68%) and a lack of U.S. federal government de-

Therefore, the bipartisan Healthcare

potential primary threat groups to the

mands on cybersecurity (83%) were all cited

Cybersecurity Act of 2022 (S. 3904) 2 was

U.S. healthcare and public health sector:

as reasons for a lack of full implementation.

introduced in March by Sens. Bill Cas-

1) organizations that are part of the Rus-

But almost nine in 10 healthcare

sidy (R-LA) and Jacky Rosen (D-NV)

sian government, 2) cybercriminal groups

respondents reported the need to secure

to buttress healthcare defenses against

based out of Russia and neighboring

remote access to their enterprise resources

potential Russian cyberattacks amidst the

states, and 3) organizations that are part

became more important in maintaining

war in Ukraine. The Healthcare Cybersecurity

of the Belarussian government.

their cybersecurity posture during the

Act calls on the U.S. Cybersecurity and

Healthcare entities have been pro-

COVID-19 pandemic.

Infrastructure Security Agency (CISA) to

moted as critical infrastructure providers

“It all starts with understanding and

collaborate with HHS to improve cyber-

(CIPs) for years and the COVID-19 pan-

outlining the risks involved with leveraging

security in the healthcare sector.

demic highlighted this fact as the health-

telemedicine and virtual operations,” said

Shortly after the war in Ukraine

care sector faced the most ransomware

Ben Schwering, vice president, chief infor-

began, HHS claimed there were three

attacks in 2021 compared to other CIPs.

mation security officer for Premier Inc.,

June 2022 | The Journal of Healthcare Contracting

representing an alliance of approximately 4,400 U.S. hospitals and health systems and more than 225,000 other providers

According to the CSA’s Healthcare Supply Chain Cybersecurity Risk Management and

and organizations.

the Ponemon Institute, which runs IT infrastructure studies, there are several reasons

“Performing regular risk assessments, documenting standard architecture and

why supply chain and risk management programs fail in healthcare,7 including:

ʯ The lack of automation and reliance upon manual risk management

data flows, and undergoing formal threat

processes makes it challenging to keep pace with cyber threats and the

modeling are essential to understand po-

proliferation of digital applications and medical devices used in healthcare.

tential risks and weak points and ultimately

ʯ Vendor risk assessments are time-consuming and costly, so few organiza-

addressing them,” he said. “One of the biggest lessons from COVID-19 is identity

tions conduct risk assessments of their vendors.

ʯ Critical vendor management controls and processes are often only partially

management. Health systems need to

deployed or not deployed at all.

focus on securing all identities, including patient, provider and staff, as well as machine identities, including medical devices and telemedicine. Many times, these won’t by CISA,” Schwering said. “Focusing on

supply chain, it’s critical that healthcare

Schwering explained that Zero Trust

basic cyber hygiene and sticking to the

delivery organizations identify, assess and

architecture has become a standard approach

fundamentals are the best approach to

mitigate supply chain cyber risks to ensure

to securing health systems in a post

prepare for a potential cyberattack.”

their business resilience.”

be within the four walls of a hospital.”

COVID-19 world, where identities are se-

Schwering said this includes fundamen-

cured first before physical networks. “The

tals such as security awareness training and

Healthcare providers and suppliers are

concepts and best practices associated with

up-to-date BC/DR (business continu-

high-value targets. When addressing cyber

Zero Trust principles apply anywhere –

ity and disaster recovery) and incident

risk and security within the supply chain,

within the hospital and remotely,” he said.

response plans that are regularly tested. It

the Cloud Security Alliance (CSA) recom-

Zero Trust is a strategic approach to

also includes technical fundamentals such as

mends healthcare delivery organizations:

cybersecurity that secures an organization by

multifactor authentication, system patching,

eliminating implicit trust and continuously

secure remote access gateways, and mod-

validating every stage of a digital interaction.

ern endpoint detection and response.

prioritize and identify those they consider to be strategic suppliers.

ʯ Tier suppliers based on risk, using

The Healthcare Cybersecurity Act would

a third-party risk rating service

partner CISA with HHS in an agreement, as defined by CISA, to improve cyberse-

Vendor and supplier risk

curity in the healthcare and public health

Healthcare providers also face risks from

sector. It supports training efforts for

many different types of supply chain

private sector healthcare professionals.

vendors. This dramatically increases the

CISA would be responsible for teaching

consequences of a cyberattack.

healthcare providers, suppliers and manu-

ʯ Inventory all suppliers, then

if possible.

ʯ Contractually require suppliers to maintain security standards.

ʯ Develop a schedule for reevaluating suppliers.

“Current approaches to assessing and

facturers on cybersecurity risks. CISA

managing vendor risks are failing,” said

CSA is dedicated to defining and raising

would also explore strategies on securing

Dr. James Angle, co-chair of the Cloud

awareness of best practices to help ensure a

medical devices and EHRs.

Security Alliance’s Health Information

secure cloud computing environment. It offers

Management Working Group, which

cloud security-specific research, education,

available to help health systems and

drafted a whitepaper called Healthcare

training, certification, events and products.

hospitals shore up their security capabili-

Supply Chain Cybersecurity Risk Management

ties such as the resources made available

in May. “Given the importance of the

“There are several great resources

The Journal of Healthcare Contracting | June 2022

“Supply chain exploitation is a reality,” said Michael Roza, a risk, audit, control

CYBERSECURITY

and compliance professional, CSA Fellow and a contributor to the whitepaper. “It’s incumbent on healthcare delivery organi-

HSCA and its Committee for Healthcare eStandards issued its own guidance for

zations to ensure that their supply chain

healthcare providers on key cybersecurity considerations,8 including:

ʯ ʯ ʯ ʯ ʯ ʯ

partners comply with data management policies in order to keep their organizations and their users safe.”

Relying on electronic communication

Designating an IT security officer and maintaining anti-virus software. Providing cyber training and assessment for staff. Purchasing insurance policies that cover cybersecurity risks. Testing manufacturer claims. Encrypting personal authentication data. Certifying that suppliers of network-accessible medical devices, software and services are compliant with FDA guidance documents.

ʯ Adopting, implementing and actively using industry-wide data standards

Cyberattacks are costly – the average financial impact of a supply chain attack

for improving efficiencies and safety throughout the healthcare supply

reached $1.4 million this year, making it the

chain. Participating in at least one Information Sharing and Analysis Or-

most expensive type of cyber incident5

ganization (ISAO) like the Health Information Sharing and Analysis Center

– and additional economic burdens on

(H-ISAO). Adopting an IT security risk assessment methodology like the

healthcare providers are being experi-

NIST Cybersecurity Framework (CSF).

enced with increasing fines and investigations from HHS and the Office of Civil Rights (OCR) due to current supply chain risk management approaches. can help identify potential weak points and

“Fundamentals such as developing

ment, transportation and payment rely

safety risks. Infusing cybersecurity controls

standard operating procedures (SOPs) for

on electronic communications. Medical

throughout the lifecycle of a device, from

updating devices, implementing strong

devices are now connected to the cloud

procurement to disposal, is critical in en-

authentication, removing hard coded

so that vendors can manage them. This

abling safe use of online devices.”

passwords and disabling unused compo-

Order processing, inventory manage-

complexity and interdependency heightens

This starts with a strong partnership

nents are critical steps in securing your

the potential risk. Healthcare organizations

with the manufacturers and suppliers

are targeted given they have more assets to

to ensure cybersecurity expectations

potentially exploit,6 and the supply chain

are clearly outlined and agreed upon,

mised, a healthcare provider’s networks

is the most fundamental component to

Schwering emphasized.

and systems are at risk.

uninterrupted daily business operations. “Supply chain security, especially with

The supply chain is an interdependent

online footprint,” Schwering said. When the supply chain is compro-

“The cybersecurity risks in delivering

system that affects everything in health-

healthcare services have beyond just the

medical devices, has become one of the

care. An insecure supply chain can impact

four walls of the hospital,” Schwering

top cybersecurity priorities for health

a healthcare provider’s risk profile and

said. “Health systems are much more

systems,” Schwering said. “Performing risk

security. Assessing and mitigating risk in

aware of the need for strong supply chain

assessments and threat models for each use

the supply chain should be applied with

security, especially involving medical

case involving online devices and services

the same energy as it is internally.

devices and managed services.”

Operational Data Portal: Ukraine Refugee Situation S. 3904 – Healthcare Cybersecurity Act of 2022 3 Federal Bureau of Investigation: Internet Crime Report 2021 4 Trellix Cyber Readiness Research: Path to Cyber Readiness – Preparation, Perception and Partnership

ITProPortal: Supply chain attacks are now more costly than ever Palo Alto Networks: Ransomware Threat Report 2021 7 Ponemon Institute: The Economic Impact of Third-Party Risk Management in Healthcare 8 HSCA: Medical Device and Service Cybersecurity

June 2022 | The Journal of Healthcare Contracting

December 2021 • Vol.17 • No.6

Women Leaders in Supply Chain Annual celebration of women leadership from many backgrounds, with many different experiences and mentors.

Allison P. Corry, Assistant Vice President, Procurement, Supply Chain Organization, Intermountain Healthcare, Salt Lake City, Utah

The only publication dedicated solely to the healthcare supply chain.

REACHING 4,400 IDN EXECUTIVES, 2,500 HOSPITAL EXECUTIVES, 600 GPO DECISION MAKERS AND 3,500 SUPPLIERS/MANUFACTURERS

CALL US FOR MORE INFORMATION: ANNA McCORMICK 770-263-5280 e-mail: amccormick@sharemovingmedia.com

We are proud to partner with The Journal of Healthcare Contracting. The unique educational content and market knowledge JHC provides serves as a vital resource to the supply chain and GPO communities. The benefit we receive has far exceeded our investment. — Bob Davis, AVP, Marketing & Communications, HealthTrust

JHC PUBLISHES YEAR-ROUND • 6 PRINT EDITIONS • 6 DIGITAL EDITIONS VISIT US ONLINE AT JHCONLINE.COM TO READ MORE EDITIONS OR FOR MORE INFORMATION

HSCA

BY TODD EBERT

Healthcare Group Purchasing Organizations Critical partners in the COVID-19 response effort.

As the COVID-19 pandemic continues

Demand Surge Notices Led to

Expanding to Non-Traditional

to strain hospitals, healthcare organiza-

Increased Manufacturer Capacity.

Suppliers Helped Ensure Continuous

tions, providers, and patients, the Health-

Communications from one GPO to

Supply of Essential Products.

care Supply Chain Association (HSCA) has

manufacturers about anticipated demand

By expanding partnerships beyond

taken a comprehensive look at pandemic

surge resulted in expanded manufacturer

traditional healthcare vendors into

response efforts from group purchasing

capacity and an additional 17 million

non-traditional and adjacent industries,

organizations (GPOs) across the health-

N95 respirators, 57.5 million isolation

such as distilleries, textile manufacturers,

care sector in a new issue brief. GPOs have

gowns, 2.1 million face shields, and

steel and automobile manufacturers,

a proven track record of providing critical

25.8 3-ply adjustable million cotton

and others, GPOs were able to help fill

support during emergencies like Hurri-

masks, among other products.

supply gaps for essential products such

cane Harvey, the California wildfires, and outbreaks of infectious diseases. COVID-19 has highlighted weak-

as hand sanitizer, face shields, isolation Supply Chain Resiliency Programs

gowns, shoe coverings, surgical caps,

Resulted in New Manufacturers

and nasal swabs.

nesses across the healthcare supply

Coming to Market. Multiple GPOs

chain, and GPOs have been among the

launched programs aimed at increasing

Collaborating with Public Authori-

first to respond, leveraging their unique

supply chain resiliency and redundancy

ties Resulted in New Policy Solutions.

insight to address supply issues and

to prevent shortages of critical products.

HSCA member GPOs worked with the

anticipate surges in demand. The follow-

One GPO’s program resulted in the

White House and government agencies to

ing are just some of the ways that GPOs

availability of an additional 676,000 units

get needed products to healthcare provid-

have helped stakeholders across the in-

of the sedative propofol. Another

ers and provide recommendations regard-

dustry navigate the COVID-19 pandemic

GPO added 40+ new manufacturers

ing regulatory flexibility around telehealth,

over the past two years.

of COVID-19 supplies, signed more

excluding key medical products from

than 100 new contracts, and evaluated

tariffs, improving supply chain visibility,

supplies from more than 2,500 brokers.

supply strategies for PPE and more.

Building Essential Medications Lists Helped Avert Drug Shortages. Multiple

The innovative data-driven solutions

GPOs compiled and identified lists of

Vetting Prevented Fraudulent or

developed by GPOs have helped thou-

essential medications whose absence would

Inferior Products from Getting to

sands of patients get essential care and

threaten the ability of hospitals to provide

Caregivers and Patients. One GPO

informed preparations for future public

immediate and high-quality patient care

vetted thousands of leads and found that

health emergencies. GPOs will continue

and shared the lists with government au-

more than 90% were illegitimate. Anoth-

to collaborate with industry partners

thorities. One GPO identified 200 essential

er GPO vetted 2,400 new manufacturers

and provide them with data, operational

medications, including 77 acute and chronic

to confirm registration with FDA and

support, and logistical guidance to ensure

life-saving drugs that have no alternatives in

the National Institute for Occupational

a resilient healthcare supply chain that

the event of a supply disruption.

Safety and Health (NIOSH).

supports providers and patients.

Todd Ebert, R.ph., is the president and CEO of Healthcare Supply Chain Association (HSCA).

June 2022 | The Journal of Healthcare Contracting

HIDA PRIME VENDOR

Building in Resilience Preparing for the next pandemic requires the right balance and right solutions.

As healthcare organizations across the country work to become better prepared for the next crisis, supply chain resilience is often defined as “more inventory.” That is a good first step, but the issue is a lot more complex than that. Stockpiling enough supplies to be ready for every possible contingency would be incredibly wasteful and require significant management. As healthcare supply chain professor David Dobrzykowski of the University of Arkansas said at a recent meeting, “If for the last century you had carried enough product to be fully prepared for a pandemic, you would have been irresponsible for 99 years.”

Medical supply spend is going up. Providers’ supply

supply chain. Many healthcare providers are working

chain expenses are already rising fast. The American

closely with their prime vendor distributor to identify

Hospital Association reports increases of 15.9% since

the most critical products to have in a pandemic stock-

2019. Medical supply expenses in ICUs and respiratory

pile, determine optimal inventory levels that increase

care departments are growing even faster, at 31.5% and

preparedness without leading to massive waste, and to

22.3% respectively. Large public sector stockpiles have

establish efficient ways to store and turn this inventory.

By Elizabeth Hilla; Senior Vice President, Health Industry Distributors Association

left governments with millions of dollars’ worth of PPE sitting unused in warehouses. And with so much prod-

It’s also important to recognize that the next pandemic may look nothing

uct already sitting unused, orders for PPE and other

like COVID-19, and could require a very different set of products. As a

critical supplies are dropping, causing many of the new

result, we need to find ways to:

companies that ramped up production at the beginning of the pandemic to scale back or shut down. We absolutely need to increase the level of “buffer inventory” in the supply chain. The pandemic proved

ʯ Increase agility: Organizations are working to increase flexibility in various ways. For example, by identifying back-up vendors, partnering with manufacturers that can pivot their production during demand spikes, and having pre-approved product substitution lists.

that the supply chain was too lean. But that doesn’t mean we need to have stockpiles at every point in the

ʯ Improve demand management and forecasting: Both suppliers and providers are working to increase their demand planning expertise, and importantly, to understand how to best share demand forecasts with their trading partners. They’ve learned that simply relying on history is insufficient and that short-term demand sensing is essential.

ʯ Reduce areas of over-dependence: Despite the concern about shortages, medical supply production is still heavily concentrated in certain countries for specific product categories. Industry leaders are working to diversify their sourcing and to support domestic and nearshore production with ongoing purchasing commitments. We cannot just stockpile our way to success. But we can work together to develop solutions that strike a balance and find the proper level of preparedness for providers.

The Journal of Healthcare Contracting | June 2022

NEWS

University hospitals, Cleveland Clinic join forces to prevent substance misuse and overdose deaths

Baylor Scott & White Health appoints Steven Newton as chief growth officer

Intermountain Healthcare and SCL Health complete merger

Texas-based Baylor Scott & White Health has

and SCL Health, two leading nonprofit

Substance misuse and unintentional

tapped Steven Newton to serve as EVP and

healthcare organizations, have completed

overdose deaths continue to be seri-

chief growth officer, effective April 25. In

their merger, creating a model health

ous problems in the United States. The

this role, Newton will drive enterprise growth,

system that provides high-quality, acces-

National Survey on Drug Use and Health

creating and enhancing customer-centric part-

sible, and affordable healthcare to more

showed most misused prescription drugs

nerships that help the organization advance its

patients and communities in Utah, Idaho,

were obtained from family and friends,

strategy. Newton has nearly 35 years of health-

Nevada, Colorado, Montana, Wyoming,

often from a home medicine cabinet. The

care experience—including almost 20 years

and Kansas. This combination employs

best way to dispose of unused or expired

in several of the system’s key geographies. He

more than 59,000 caregivers, operates

medications is to take them to an official

most recently led two North Texas regions,

33 hospitals (including one virtual hos-

disposal location. As part of the Drug

including six hospitals, and served as president

pital), and runs 385 clinics across seven

Enforcement Administration’s National

of Baylor University Medical Center, one of

states while providing health insurance

Prescription Drug Take Back Day on

the health system’s flagship academic medical

to one million people in Utah and Idaho.

April 30, University Hospitals (UH) and

centers. Since joining Baylor Scott & White

With the close of this merger, Inter-

Cleveland Clinic are partnering to host

in 2004, he has also served as president of

mountain Healthcare is the eleventh

collection efforts at 17 locations through-

Baylor Scott & White Medical Center –

largest nonprofit health system in the

out Northeast Ohio in addition to pro-

Grapevine and Baylor Scott & White All

United States.

moting collection at two police stations.

Saints Medical Center – Fort Worth.

CALENDAR

Utah-based Intermountain Healthcare

Due to COVID-19 restrictions at press time some dates and locations may change.

Association for Health Care Resource & Materials Management (AHRMM) AHRMM22 Conference & Exhibition August 7-10, 2022 Anaheim, California

Premier Breakthroughs 22 June 21-23, 2022 Gaylord DC National Harbor Washington, DC

Health Connect Partners Summer 22 Hospital Supply Chain Conference June 20 – July 1, 2022 (Virtual)

Share Moving Media National Accounts Summit Dec. 1-2, 2022 Fort Worth, Texas

IDN Summit Fall IDN Summit & Reverse Expo August 29-31, 2022 JW Mariott Desert Ridge Resort and Space Phoenix, Ariz.

Vizient 2022 Connections Summit Sept. 19-22, 2022 Wynn Hotel Las Vegas, Nevada

SEND ALL UPCOMING EVENTS TO GRAHAM GARRISON, EDITOR: GGARRISON@SHAREMOVINGMEDIA.COM

June 2022 | The Journal of Healthcare Contracting

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Articles inside

Healthcare Group Purchasing Organizations

Operation Warp Speed

Book Spotlight Significant Figures

Building in Resilience

Publisher’s Letter Where We Go from Here

Direct from the Source

No Surprises Act is Flawed: Doctors

Battling Cancer Amid COVID