Detroit-based Henry Ford Health is leaning on unified data systems, clinician engagement and deeper supplier partnerships to strengthen supply chain reliability while finding new ways to cut costs.
For Candice Pytlik, chief supply chain officer at Henry Ford Health, that means moving beyond one of the industry’s traditional cost-cutting strategies.
“The days of just beating up suppliers over price are gone,” Ms. Pytlik told Becker’s. “We have got to start focusing on how we can create value together.”
The health system has made investments in its data infrastructure over the past year. Henry Ford moved to a common distributor through Medline and adopted a common ERP system, bringing purchasing, human resources and finance data onto one platform. In June, the system also transitioned to a common Epic EHR.
“By having an alignment, it makes our data just better,” Ms. Pytlik said, adding that data “drives a lot of what we do.”
Those changes have been accompanied by improvements in both cost and supply availability metrics. Henry Ford also switched its group purchasing organization and has seen its cost of providing care decrease, Ms. Pytlik said. Its unadjusted fill rate with Medline — which includes back orders and other availability issues — has also increased by more than 1 percentage point.
Within months of going live with Medline in December, Henry Ford’s fill rates also climbed above 98% and frequently reached 99%.
For clinicians, that improvement translates into greater confidence that needed supplies will be available each day, Ms. Pytlik said.
Another key piece of Henry Ford’s strategy is putting clinicians at the center of supply chain decisions. The health system holds monthly value analysis meetings with key service lines and clinical groups, allowing physicians and nurses to weigh in on products, utilization and opportunities to create value.
That approach has generated significant savings in some areas. Henry Ford’s neurosurgeons, for example, review supplies used in spine procedures, including their costs, and work across hospitals to determine where products can be standardized.
Those efforts create about $2 million to $3 million in value annually for the health system, according to Ms. Pytlik.
“They are willing to take a hard look at some of the products they use and then make decisions that are the most economical,” she said.
Henry Ford uses a similar clinician-led model when considering new medical technologies. Physicians who want to introduce a product present it to a group of their peers. Supply chain provides financial information and works with other teams to assess reimbursement, quality and outcomes, while physicians evaluate whether the technology should be adopted.
The process has led clinicians to delay adopting some technologies when the overall value proposition did not support immediate use.
“Physician to physician having a discussion is a lot more powerful than a non-clinician saying, ‘Oh, this thing is too expensive. You shouldn’t use this,'” Ms. Pytlik said.
That collaboration extends to Henry Ford’s suppliers.
During the health system’s transition to Medline, leaders held daily calls to raise issues and work through problems together. Henry Ford also gave Medline direct visibility into operational challenges. When receiving problems emerged, for example, Medline representatives could go to Henry Ford’s receiving docks to see where the process was breaking down.
“Being open to collaboration, having excellent communication and really just having the consistent discussions and goal setting” helped the organizations improve performance, Ms. Pytlik said.
Even as Henry Ford strengthens its operations, supply availability remains a persistent challenge.
The health system had hoped supply reliability would stabilize after the COVID-19 pandemic, but cyberattacks, geopolitical conflicts and natural disasters have continued to create disruptions. As a result, the supply chain team spends significant time anticipating potential problems and ensuring clinicians have access to the products they need.
“I wish we didn’t spend as much time on supply resiliency, but it clearly is not ever going away,” Ms. Pytlik said. “It’s just the world we live in.”
At the same time, financial pressures are pushing the health system to find additional savings. Rather than waiting for monthly financial results and then responding, Ms. Pytlik said her team is trying to be more forward-looking by maintaining a pipeline of ideas to reduce costs and better support the organization.
The next phase of that work will increasingly focus on areas beyond traditional product pricing. Henry Ford is exploring what Ms. Pytlik described as “phase 2” savings opportunities, including utilization, standardization and purchased services optimization. The health system is also examining technology related to resiliency and automation, including how AI could make supply chain work more efficient.
One question her team is asking, she said, is whether a task that currently requires five hours each month could instead take one hour with the help of technology.
“We feel like we are at the low for our pricing, and we are going to have to get creative to deliver value to the health system,” Ms. Pytlik said. “There is not any stone that we’re not trying to unturn right now.”
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