As I travel around the country working with hospitals and other providers, I have been seeing some early signs of a shift in the mindset of supply chain stakeholders. For now, it is more seedling than Sequoia; we must cultivate this new attitude more fully if we are going to play our rightful role in improving the quality, safety and efficiency of care under health reform.
Today, most supply chain leaders and the senior leaders that they report to see their main role as lowering costs. Their principal interactions are with GPOs and vendors, getting the best terms and conditions on contracts and getting product where and when it is needed. That worked for decades, but it won’t be enough going forward. With federal and state governments now fully engaged in payment reforms and quality metrics; employers experimenting with new care delivery models; and the public, providers and insurers focusing on performance and value, supply chain leaders need to change their perspective if they want to stay relevant.
Put simply, they need to become patient-centered advocates for safer, higher-quality and more efficacious care. Their principal relationships need to be redirected internally with physicians, clinicians and patients. They need to expand their ability to provide the information that doctors and patients need to make valid and reliable choices on care and utilization. That will require investments in new data repositories and expanded analytics capabilities, but the ROI on that spend will be plentiful.
As we discussed with the attendees at the recent Association of Healthcare Resources & Materials Management (AHRMM) conference last month in San Antonio, supply-chain practitioners have a responsibility to provide better clinical supplies documentation – knowing what products were used, what they cost, when they were used and how they affected the clinical outcome. With value analysis becoming more relevant every day and payment reforms putting the spotlight on quality and cost efficiency, the pressure to generate, analyze and report these data through accessible dashboards will only grow in intensity. The supply chain leader is the natural person to take on this challenge.
Doctors are looking to them for it. Last year, my company and VUEMED commissioned a survey of physicians to evaluate their perspectives on their relationships with supply chain/materials organizations, their contribution to the product selection/purchasing decisions and the impact of healthcare reform on their practice. Nearly 70% of physicians surveyed described the relationship with their supply chain/materials organization as “supportive” or “collaborative,” in which both parties exchange relevant information and participate in product review and evaluation decisions. The respondents also said they would like to see more peer utilization data to aid them in their product selection decisions; however, they want this data to be supplied by hospitals and others without a conflict of interest.
At the AHRMM meeting, I moderated a panel of physician leaders actively involved in supply chain-related functions in their respective organizations. These physicians represented industry-leading facilities: Dr. David A. DiLoreto, CMO of Presence Health in Chicago; Dr. Tom C. Krejcie, CTO of Northwestern Memorial HealthCare in Chicago; and Dr. Sean Lyden, Supply Chain CMO at The Cleveland Clinic in Cleveland. These physicians took two to three days away from their responsibilities and practices to speak to a group of supply chain practitioners. That’s a profound shift in the attention paid to supply chain by C-Suite executives and a potential harbinger for the physician-supply chain relationship.
I closed the panel session with the observation, “We’ve come a long way, baby.” I recalled another session that I moderated at the IDN Summit about the Thompson Reuters 100 Top Hospitals program, including a supply intensity matrix as a key criterion in top level performance. Dr. DiLoreto and I discussed a recent article entitled “Big Med” in The New Yorker, in which famed surgeon-writer Atul Gawande described how successful efforts to streamline care delivery depend on standardization of processes and products, including implants, and how getting physicians to change their utilization patterns requires data on cost, quality and profitability.
It is also my opinion that there’s still a long way to go. Supply chain leaders need to participate in EMR and clinical information systems implementations, with an eye to generating data for comparative effectiveness reviews. They need to ensure through GTIN adoption that we have taxonomy standards that make the supply chain safer for the customer. Investments in systems and technology must be installed to align with our changing requirements.
Everything we do must somehow benefit the patient and improve care and outcomes – that’s the relevancy we must seek. This shift may not be comfortable at first, but in the end it will dramatically raise the profile and perceived value of the supply chain as a key component of solving the large and complex problems now facing the healthcare industry.
