Salt Lake City-based Intermountain Health has expanded its self-distribution model with the launch of a centralized service center in Billings, Mont., — the first in the state — to bring increased supply visibility and logistical control.
The facility, part of the health system’s broader strategy to increase supply chain resilience, integrates medical-surgical supplies and pharmacy distribution under one roof.
Becker’s spoke to Gordon Slade, senior system director of distribution services at Intermountain Health, about how crucial this strategic Montana central pharmacy center is to ensuring consistent access to medications and supplies across the health system’s hospitals.
Why Montana and why now
Mr. Slade said the new distribution center is the direct outcome of Intermountain’s 2022 merger with SCL Health, which brought three major Montana hospitals into the health system. However, the move also prompted the health system to evaluate supply chain capabilities in the region, which revealed vulnerabilities and opportunities.
“Montana is remote and beautiful, but it does not have a lot of medical, surgical distribution or warehousing within the state, which puts it a little bit at risk,” he said.
After evaluating critical factors like transportation costs, supply delays and the burden of Intermountain’s hospitals having to store large amounts of inventory on site, the health system concluded the demand volume in the state could support a consolidated service center.
Location strategy
Mr. Slade said the center was placed in Billings because of its central location along the Interstate 90 corridor and its proximity to St. Vincent Regional Hospital, one of the region’s largest hospitals.
“We picked Billings because that’s where the largest hospital, the center of most healthcare in Montana resides,” said Mr. Slade. “If you follow the I-90 corridor, we have hospitals on the eastern side of there, as well as the western side with St. Vincent kind of in the middle.”
Beyond geographical reasons, the facility was also designed to accommodate key service lines, including medical-surgical supply, limited pharmaceutical distribution and linen services, and to address a greater need for more reliable and cost-efficient support in the area.
Filling critical supply gaps
Another reason for the hub was that unlike Utah, where Intermountain operates a large distribution center in Midvale, Utah, Montana has previously relied heavily on third-party distributors because many don’t maintain a physical presence in the state, Mr. Slade said.
“The traditional big three medical surgical supply distributors do not have large distribution centers in Montana,” he said. “There are some pharmaceutical distributors, but not generally a large distribution center. You don’t see that in Montana”
Intermountain’s new Montana consolidated services center is designed to alleviate this supply gap by lowering costs and shifting supply storage out of clinical environments.
“We want hospital space to focus on patient care, not act as warehousing,” said Mr. Slade.
The facility also addresses longstanding shortage issues with linen services, replacing an outdated, energy-intensive co-op model with a laundry operation.
Emergency preparedness
The center also offers cold chain capabilities for critical lab and pharmaceutical items and is planned to be integrated into the state’s emergency response framework through partnerships the health system formed with the Montana Hospital Association and local government.
“In fact, our CSCs are part of our emergency management strategy at Intermountain Health. So it’s an actual part of the strategy,” Mr. Slade added. “Traditionally, we classify items in ABC and many different items that you normally see in inventory classifications. But we have created a number of other classifications based on the risk and criticality of those items being available.”
The center is also monitored through the health system’s supply chain control tower, which evaluates the inventories across the system and places strategic orders based on demand forecasts, risk analyses and projected supply needs.
“We learned from COVID-19, those with CSCs weathered the storm better because they owned their inventory,” he said. “It’s not about hoarding, it’s about inventory transparency and planning.”
Positioning for the future
Looking ahead, Intermountain expects the new CSC to deliver impact systemwide for improved supply assurance, lower per unit costs and greater operational efficiency. Over the next five years, Mr. Slade said he also anticipates continued expansion and integration of service lines as demand in Montana grows.
“In every way, it’s a win,” he said. “For Intermountain, for Montana and for the patients we serve.”
