Managing the healthcare supply chain continues to grow in intricacy, especially as integrated delivery networks expand their non-acute footprints and care moves to outpatient settings, explained Ken Rasbid, National Sales Director at Dublin, Ohio-based Cardinal Health.
To address this increasing complexity, providers should look to gain visibility and drive simplification across their supply chain continuum by embracing a mindset toward integration, Mr. Rasbid said.
"It is a journey, not a destination," Mr. Rasbid said. "Health Systems that have embraced a mindset of constant improvement seem to be the ones that adapt the fastest and continually realize additional untapped value."
Here, Mr. Rasbid discusses the trends he is seeing in the healthcare market, how the trends are affecting the IDN supply chain and tips IDNs can use to build an integrated supply chain.
Editor's note: Responses were edited for length and clarity.
Question: What trends are you seeing in the market?
Ken Rasbid: We are continuing to see heightened expansion, as well as merger and acquisition activity across the physician office and urgent care clinic space. While this kind of behavior has been present over the past decade, we are seeing continued development as more health systems look to increase coverage to their non-acute footprint. The focus on preventative health is at an all-time high as these care providers try to advance patient education and reduce total healthcare costs by keeping people out of the hospital.
This activity isn’t exclusive to health systems as private equity firms, and both regional/national players look to assert themselves and address a geography that is of interest to them. Speculation also exists regarding the impact of COVID-19 on the independent physician office and whether that may prompt additional market shifts.
Q: How have these trends affected the IDN supply chain?
KR: We have seen the trends result in a heightened desire of integration and gravitation toward standardizing core supply chain processes. As more clinics get added to an established footprint, the more likely it is that complexities and exceptions will follow. We are seeing a greater need for customers to understand their own current processes, get greater visibility of non-acute spend and implement more controls to enable good supply chain mechanics across the care continuum.
Not surprisingly, we see an inherent benefit of using a one-vendor platform to reduce touch points throughout the supply chain and eliminate waste by taking redundancies out of the process.
At Cardinal Health, we've approached this by leveraging consistencies that may already be in place as a result of our acute care relationship. For example, in health systems where we enjoy a prime vendor relationship for the hospitals, Cardinal will already have optimal tier pricing and acute contracting in place, as well foundational elements associated with account hierarchy and punch-out integration for their MMIS procurement platform. We then look at how we can replicate across all of the off-sites and scale so that the end user will feel the benefits of one vendor. We aren't looking to be just another distributor for your non-acute space, but instead are striving to bring a flexible solution that enables total supply chain integration.
Q: What can IDNs do to build an integrated supply chain across their acute and non-acute sites?
KR: Even in a large system, non-acute sites may be less than 5 percent of spend, but often can feel like 50 percent of your effort and headache to keep up with. This is because an IDN could have hundreds of sites placing orders. The larger the system or network gets, the more complex they become, which often leads to less visibility into the supply chain.
From my experience, the systems that are already on the right path to integration can at least articulate how many sites they have, where they are at and what their approximate spend is. That may sound extremely basic, but most systems are challenged to put their finger on what seems like a moving target. You can't be successful at something unless you can manage it, and you can't effectively manage something until you can explain it. The key is to build upon a firm foundation as opposed to continuing a one-off mentality and trying harder. Working smarter means that you understand who the end users are, what they are ordering and how often they are ordering it. From there, systems can build key performance indicators that are aligned with system-wide supply chain goals. The KPIs and measurements can measure progress and identify outliers. IDNs can engage and educate the sites that are outliers to make necessary changes. In best practice examples, this is a shared responsibility between the distributor and provider.
It also comes down to driving efficiencies in processes. When you're managing a handful of sites, inefficient processes can be masked. But when you start managing hundreds of sites, those extra steps start to multiply and begin to weigh on your procurement and fulfillment teams. The key to a sound foundation is to incorporate automation and simplify at every step, with a goal to reduce inefficiencies in the processes and eliminate waste so your people can do more with what time they have in the day. Simplification is important, but it is also helpful to recognize that it is not easy. There is no light switch to flip that instantly fixes things. There is no magic wand to this. Those that want to optimize their entire supply chain are ones that are building a culture and mindset toward a scalable and sustainable solution. They are also willing to prioritize and put in some work since they see it as a journey, not a destination. Systems that embrace that reality are often the ones that will feel the greatest long-term benefits and are in a position to continue adding more sites.
To learn more about Cardinal Health and how the distributor is helping providers build integrated supply chains, click here.