Jefferson Health's supply chain success story — 3 tips for product standardization

Providers are continually searching for best practices to control costs without jeopardizing patient care, especially as declining reimbursements and increasing product expenses continue to squeeze hospital margins.

One key strategy emerging to help healthcare organizations meet clinical and financial goals is product standardization.

During a May 9th webinar hosted by Becker's Hospital Review and sponsored by Dublin, Ohio-based Cardinal Health, Kelli McRory, director for clinical strategic sourcing at Philadelphia-based Jefferson Health and Jessica Silvestri, senior consultant at Cardinal Health, discussed the benefits of clinical product standardization, shared best practices to achieve standardization success with a vendor, and explored a real life example of a win-win partnership between Jefferson Health and Cardinal Health.

The benefits of standardization

There are numerous benefits — both financial and clinical — when hospitals and health systems standardize products and processes, explained Ms. Silvestri.

Product standardization can create new supply chain efficiencies that support patient safety initiatives, generate cost savings and improve clinician workflow.

"Using common products and procedure kit componentry enables providers to leverage volume purchasing power [and] minimize SKU counts, waste and inventory on the shelf … Standardization also helps remove variation and creates one simplified approach across multiple settings," Ms. Silvestri explained. "It is proven best practice to support clinical outcomes, safety, improve efficiency and control costs."

While the benefits of product standardization are clear, being successful at standardizing clinical products requires collaborating with the right partner, explained Ms. McRory.

Here are three tips for identifying and collaborating with the right vendor to achieve standardization success:

1. Collaborate with a well-resourced vendor. A strong vendor will not only have a wide breadth of product lines and multiple group purchasing organization contracts, but it will also use data analytics to inform decisions and provide consistent education to staff across the healthcare organization's many facilities, explained Ms. McRory. "When you can consolidate spend under a single vendor with multiple GPO relationships, deep breadth of product line and strong distribution, you'll generate a greater financial value. Those dollars can be reallocated to improving patient care," Ms. McRory said.

2. Choose a vendor that's a good fit. Choosing the right vendor for your organization is key, Ms. McRory said. The right vendor will be a partner that understands the pain points and initiatives of an organization, shares in financial risk long-term and offers dedicated education teams instead of sales representatives. "It's super important is that your vendor sees the big picture. It's not just about the transaction, the next contract, the next contract addendum or the next product line. It is really about who we are as an organization … so we can really look at [goals] for the short term and the long term," Ms. McRory said.

3. Leverage a vendor to help overcome challenges. Overcoming clinical resistance to standardization can be particularly challenging. Often, providers need proof that switching to a clinical product is beneficial for the patient. Vendors can help organizations overcome the clinical resistance to generate buy-in through education and talking to providers. "It is so important that a vendor has a clinical team that can work directly with your [team] to support standardization," Ms. McRory explained.

A good vendor-provider relationship is defined by trust and transparency and how issues are resolved, according to Ms. McRory. "You want that vendor to go to bat for you. You want them to see the big picture and work side by side with you to achieve your long-term goals. Total transparency is the foundation of the relationship," Ms. McRory said.

Jefferson Health's success story

Jefferson Health, an integrated delivery network that has grown from four acute facilities to 14 in the last four years, began looking at standardizing clinical products as its system expanded, according to Ms. McRory.

"Our continued expansion increased the significant amount of complexity and potential inefficiencies that can cost real money," Ms. McRory explained.  "We really wanted to standardize clinical products across the breadth of our facilities and help centralize spend and achieve both cost control and quality care initiatives to support and help accelerate our success as we grew."

Through collaboration with Cardinal Health, Jefferson Health was able to successfully standardize eight major product lines, including exam gloves, custom procedure trays, topical skin adhesives, infection control apparel, freight management and others, from three vendors down to one.

"We definitely did not wait to tackle the more difficult product lines … As a result, over the past four years we met our aggressive goals related to standardizing major product lines and creating new efficiencies … it freed up clinicians to focus on patient care, reduced SKU counts and streamlined customer service," Ms. McRory said.

Standardization is an essential strategy for health systems looking to create new supply chain efficiencies to generate substantial financial savings while also supporting quality care initiatives.

To learn more about clinical product standardization, listen to the webinar here.

To learn more about how Cardinal Health is helping providers meet clinical product standardization goals, click here.

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