How 2 health systems are moving the needle on costs & outcomes with an optimized supply chain

Most healthcare leaders view supply chain as a strategic asset that can be tapped to cut costs amid declining reimbursements and tightening operating budgets. But many health systems have yet to use the supply chain to effect clinical change.

"Supply chain can be a strategic bridge between clinical and operational outcomes," said Robert Rajalingam, senior vice president of strategic accounts and enterprise marketing at Dublin, Ohio-based Cardinal Health. "But as most of us are aware, healthcare is a bit slow to adopt some of these best practices."

This article is sponsored by Cardinal Health.

Mr. Rajalingam kicked off Cardinal Health's April 1 summit at Becker's 10th Annual Meeting in Chicago by welcoming two leaders finding innovative ways to lower costs and improve care by pushing the boundaries of supply chain improvement:

  • Kelli McRory, associate director of strategic sourcing for Philadelphia-based Jefferson Health
  • Mark Chaparro, PharmD, director of pharmacy at Gastonia, N.C.-based CaroMont Health

These leaders discussed how their organizations are tapping innovative operational improvements to address complex clinical issues, such as high rates of clinical variation and readmissions.

Forming strategic vendor relationships
More health systems are recognizing the benefits of identifying a single vendor partner that can help with tasks like standardization and employee education, versus tapping multiple vendors who only offer low prices.

"You can't just go with the best price and fragment all of your business and spend," said Ms. McRory. "You want to collaborate with a partner that can do a lot of different things for you and streamline your process."

Working with one large vendor helps health systems drive standardization and SKU reduction, limit group purchasing organization contract variation and offer consistent employee education across all care sites. This helps health systems ensure all facilities are following the same clinical and operational processes to maximize cost savings and improve organizational efficiencies.

When selecting a vendor to partner with, health systems should look for an organization that shares long-term financial risk, maintains a wide breadth of product lines, offers education teams for providers and, most importantly, understands the system's "big picture" according to Ms. McRory.

"Jefferson is in major growth mode," she said, noting that it will be a 17-hospital system within three years. "The right vendor will know where you are in terms of that strategy. They will get to know your organization so they can understand where you are going."

As a growing system undergoing many changes, Jefferson Health turned to Cardinal Health for assistance. The supplier not only helped standardize products across all of Jefferson's care sites, but also worked with the system to overcome staff member's resistance to standardization and change fatigue. As a result, the system was able to standardize eight major product lines from three vendors to one.

"That process created new efficiencies we didn't even think were possible," Ms. McRory said.

Revamping pharmacy processes
Healthcare organizations are constantly looking for new areas to reduce budgets while expanding services. Pharmacy is increasingly becoming a target for these efforts. More hospitals are asking pharmacists to take on patient-centered initiatives, such as medication reconciliation or discharge pharmacy planning to help improve outcomes and prevent readmissions. However, these efforts can also cut into pharmacists' time allotted for regular order entry work.

At CaroMont Health, adding more full-time pharmacists to address this issue was not a realistic option. Instead, the hospital updated its pharmacist staffing models and tapped remote pharmacy services for additional support, according to Dr. Chaparro.

"We basically blew up our 20-year-old model and made three different groups of pharmacist teams," he said. "We now have an operational team, a clinical team and an emergency room team."

During this reorganization, CaroMont aimed to create more manageable patient loads for pharmacists and better hours. The hospital also outsourced order verification to remote pharmacists from Cardinal Health.

"We had to find somebody who could help us do the day-to-day monotonous kind of [pharmacy] processes that have to happen," Dr. Chaparro said, adding that the biggest challenge was getting existing pharmacists on board with the process changes.

To help achieve full buy-in and engagement, CaroMont invited one of the remote pharmacists to visit the hospital in person.

"We brought him into the department, introduced him to all the pharmacist he was going to be working with and made sure our pharmacists really looked at him as part of the team," Dr. Chaparro said. This meeting also gave the new pharmacist an opportunity to learn about pharmacy procedures and initiatives specific to CaroMont.

Handing off responsibility for medication order verification to remote pharmacists allowed CaroMont pharmacists to focus on other important activities like patient discharge medication reconciliation and counseling, post-discharge cultural reviews and antimicrobial stewardship efforts.

Three months into revamping its pharmacy operations, CaroMont pharmacists reviewed about 1,200 discharge medication reviews and made 277 clinical interventions. A year and a half later, these figures jumped to 10,095 discharge medication reviews and 3,527 more clinical interventions. The hospital's HCAHPS score for new medication side effects also increased from 63 percent at baseline to 83 percent over the same time period.

The days of viewing supply chain solely as a cost-cutting asset are over. Health systems nationwide are increasingly making innovative supply chain changes to better bridge clinical and operational processes, driving metric improvements for both. Ultimately, the healthcare organizations that adopt this new mindset will be most successful in reducing costs and achieving effective care delivery.


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