Health system financial recovery and the supply chain: 5 experts + 5 insights

The past year has been difficult for hospitals and health systems. Looking ahead, financial recovery and responding to lessons learned are top priorities. This work includes initiatives to enhance supply chain resiliency.

During a virtual featured session sponsored by Accumen as part of Becker's Hospital Review 11th Annual Meeting, five experts discussed how, after the challenges of 2020, healthcare organizations are using supply chain and utilization management to improve their financial wellbeing:

  • Brent Bolton, vice president and general manager of supply chain for Accumen
  • Autumn Farmer, chief laboratory officer of Cincinnati-based Bon Secours Mercy Health
  • Dan Hurry, president of Advantus Health Partners and chief supply chain officer of Bon Secours Mercy Health
  • Joe Thomas, vice president and general manager of clinical optimization for Accumen
  • Jeremy Wilneff, supply chain director for Accumen

Five key takeaways were:

  • Hospitals and health systems recognize the strategic importance of supply chain savings. In 2020, healthcare organizations experienced reductions in revenues and operating margins, as patients abandoned routine care and elective surgeries. "The revenue impact of the pandemic was magnified by increases in supply chain costs," Mr. Bolton said. "Last year a record number of hospitals closed because they couldn't withstand the financial pressures. The pandemic highlighted the importance of supply chain in a hospital’s financial prosperity.”
  • Supply chain within the lab is now top of mind for healthcare leaders. Bon Secours Mercy Health, like many other health systems, struggled to obtain lab supplies during the pandemic. Downstream effects of COVID-19 persist today, with shortages of various lab testing products. "Lab is often viewed as a sunk cost," Ms. Farmer said. "The lower the cost for supplies, the more value we bring to the health system. We lean on our supply chain to analyze new technology, so we can find the best way to test and stretch our capital dollars."
  • Lab stewardship is a utilization management strategy that controls costs and improves quality. "Every health system should establish a formal lab stewardship program," Mr. Thomas said. "These initiatives improve the ordering and interpretation of lab tests, as well as securing proper financial coverage for medically necessary testing." Effective lab stewardship programs have four characteristics: a strong infrastructure with leadership buy-in and clinical engagement, meaningful data down to the provider level, effective communication and focused clinical interventions based on opportunity areas.
  • Patient blood management programs can also enhance patient safety, while lowering costs. To be successful, these initiatives need a strong clinical infrastructure with ownership and accountability, data that highlights variation in provider practices, clinical education, computerized order entry and clinical decision support and proactive strategies to mitigate transfusion risk. In some cases, getting patient blood management programs started is tough since behavior change is required.
  • Supply chain partnerships lead to valuable improvement opportunities. The pandemic has underscored the value of supply chain partnerships. "We look at supply chain as a function, not a department," Mr. Hurry said. "We need to partner to understand the challenges and COVID-19 put an exclamation point on the need to be integrated with one another." During Bon Secours Mercy Health's three-year partnership with Accumen, the organization has saved $12 million in laboratory supply chain expenses.

To learn more about this session, click here.

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