When a hospital acquires a physician practice, it is easy for supply chain operations to get lost in the shuffle when it comes to data transfer. Physicians' EMR and other data are often the first to transfer over, while the practice's supply chain needs are typically the last pieces of information shared.
"Communication is always most important," says Brad Clark, general manager of enterprise accounts for Eastern U.S. at Henry Schein. "Ideally, hospital executives notify their supply chain team well in advance of acquisition or integration; however, in most instances we see more of a spontaneous approach than a formalized process. As a result, critical steps are missed creating inefficient operations throughout the continuum of care."
Mr. Clark notes capacity constraints can become an issue if the hospital is acquiring a large practice. "[Integrated delivery networks] that have always self-distributed to their nonacute locations are now reconsidering or transitioning from those models due to these capacity issues," he says. "They now rely on their nonacute distributor to help enable their growth rather than hinder it."
As the hospital or health system network grows bigger, the geographic footprint spans a larger territory and the logistics of ordering inventory become more complex.
"Another key activity during integration of practices under the IDN umbrella is training the practice administrators on the new procurement process and systems," Mr. Clark says. "Either the IDN supply chain personnel or nonacute distributor leads this training dependent upon the distribution model in place. Ultimately, the goal is to achieve optimal inventory management based upon the practice needs and supply chain goals."
Improper integration leads to increased cost in several areas: inventory management, training, freight expense and contract utilization. The cost associated with improper group purchasing organization rostering and contract access when onboarding new products can be significant. It can take up to 90 days for some vendors to gain access to those new contracts. The quicker a hospital tells their supply chain about an acquisition, the quicker they can work with the GPO and manufacturers to gain access to the right contracts.
Another issue arises if the hospital has standardized its products, but does not include the products physicians have purchased in the past. Switching from the former product to the new product can be disruptive, but the hospital's nonacute distributor can act as a liaison between the hospital and the practice to promote a positive program for the office.
"A best practice is to select a nonacute distribution partner," says Mr. Clark. "They can help create class of trade-specific formularies and drive compliance throughout the continuum of care. You can then form a nonacute committee where thought leaders come together and make procurement decisions when it comes to standardization. We only see a few IDNs that have nonacute committees outside of the hospital walls and they tend to have the best visibility and access to their entire supply chain."
Typically, the nonacute committees include a few members from the supply chain department, practice administrators and key physicians. The physicians represent the clinicians as a whole and are responsible for ensuring a positive outcome and recommendation adoption among their colleagues.
"Most importantly, the committee helps develop a communication [standard operating procedure] for letting all of the practices know which initiatives are being taken," says Mr. Clark. "They implement the changes, review the results and adjust their strategies with their distribution partner continuously."