Setting Goals to Achieve a More Effective Supply Chain

A good friend once told me, “Never a ‘should’ without a ‘how.’ ” I concluded my last column, which was about how supply chain leaders need to become advocates for safer, higher-quality and more efficacious care, with some specific recommendations. Those included getting involved with EMR initiatives, implementing GS1 standards and changing the way information systems are installed.

 In other words, I had lots of “should,” but left out the “how.”

Laurel Junk, vice president of Supply Chain for Kaiser Permanente Health and Anna Fox, executive director of the Dignity Health Purchasing Network, both spoke about these topics at a recent conference in Chicago. They essentially said the same thing that I discussed with physicians on my panel at the Association of Healthcare Resources & Materials Management conference in August. Supply chain practitioners must begin looking back into the organization to set their priorities and goals, they said. Strictly looking outward to the GPOs and suppliers will limit our perspective and we’ll likely not achieve the goals of lowering costs and improving care through a more effective supply chain.

Their talks left me thinking about the “how.” Here are some initial ideas (I will have more in future columns) that I pulled from my experiences serving the industry.

  • What about setting a savings target within your organization that articulates a dollar amount in terms of a patient deliverable? I once gave a buyer on my team a quarterly cost savings goal of “a bone densitometry unit.” It was that item at the top of our capital purchase wish list that we could not afford. Unbeknownst to me, the buyer had been taking turns with her family members driving their grandmother 65 miles to have routine bone scans performed. Let’s just say that I would not have wanted to be a supplier calling on that buyer, that quarter. Granted, I needed to clear a means to acquire the unit with operational savings with the CFO, but at the end of the day, that buyer was intrinsically motivated to deliver savings for the patients. Unfortunately, that is many times lost in translation and our supply chain teams feel disconnected with the good work performed at their organizations.
  • For that reason, we always endeavor to state the supply chain departmental goals in terms of their specific contribution to the overall organizational goals. Cost savings are not just to shore up the financials; they also serve to enable investments in improving patient care (as the previous example demonstrates). GS1 implementation, point of care technology investments and inventory improvement initiatives all drive patient safety and nursing satisfaction/caregiver time with the patient improvements. State the obvious supply chain goal, but also add a statement on how the goal improves care. This simple action is also an effective way to market your contributions throughout the organization.
  • Another effective way to promote your engagement/contribution, and enfranchise staff in the same, is to establish a patient-rounding program. I once set this up at an urban academic medical center in Washington, D.C., where many patients were admitted while traveling away from home, family and friends. Staff would volunteer to visit with patients in this situation, and I experienced a renewed sense of urgency to ensuring that the nursing units were well-stocked and maintained. Also, at the recent IDN Summit I had the privilege of moderating a panel consisting of team members from the Kettering Health Network presenting on the association between more effective supply chain and higher HCAHPS scores. One of the discussion points was on rounding by team members so everyone knows what patients liked/disliked about their stay and the products that were selected for their care.
  • So how about enfranchising physicians? Is there an effort in your organization to develop peer review studies? If so, are you leading it? Do you have specific goals? Comparative effectiveness tends to get narrowly defined in terms of a single product/technology, but our work at Optimé and a survey we conducted last year with VUEMED reinforced the reality that physicians want unbiased comprehensive peer review data. It can’t just be about a single product. Supply chain needs to expand its traditional data gathering efforts to better inform the whole “bill of materials” used to care for each patient.

Three quick learnings to share regarding this work:

  1. Start small, build with integrity and it will grow. This is our mantra when we help a client with this work. Time and again we see organizations wanting to boil the ocean, and the sheer amount of data anomalies drives them to take shortcuts and make assumptions. The results lack the integrity that clinicians require. We have learned that it is better to build with fewer initial data elements that can be combined with high integrity and leave your physicians wanting more. To get the additional data with high integrity will likely require process changes, but you now have a new champion for that work effort.
  2. Take great care in identifying high-integrity data sources. Root out the real source of truth for both the data element and the timing of the data collection. The traditional extrapolated average costs, multivariate codes and descriptors will cause great pains downstream when comparisons are trying to be made.
  3. Help your audience interpret the data. Users should have the ability to view the data with both their traditional taxonomy and a new standard taxonomy that will be required for comparisons.
  • Lastly, to expand on the taxonomy/vernacular theme: Consider changing your supply chain vernacular to better resonate with that of your clinician peers. I’ve had a great deal of success with simply using “reducing variation” (a Lean and clinical term for a good thing) instead of using “standardization” (a negative term associated with attempting to limit choice or take something away).

So those are just a few  “hows” you can consider as you redefine the supply chain role in your organization from a limited focus on contract prices to a prominent player in helping to solve the cost and quality problems in healthcare.

As always, call on us if we can help in any way.

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