With 29 years of healthcare experience from finance to patient care, new HealthTrust CEO Ed Jones has a broad view of the industry
Perhaps it was his interest in pre-med as a college student, or the fact that he played a role in creating the first consolidated supply chain organization at the Hospital Corporation of America (HCA) almost 20 years ago. For whatever reason, Ed Jones has a broad, “end to end” view of supply chain management. It encompasses finance, patient care and everything in between. It’s a view that he has maintained for 29 years in the business, and one he intends to maintain in his new position as president and CEO of HealthTrust.
Jones got into the healthcare supply chain while a student, working part-time in a hospital as a means of helping finance his education. He started his college career as a biology pre-med major, but switched to business administration with a concentration in finance.
‘DRGs are coming’
It was 1983, he explains. “A cardiologist told me, ‘Ed, you need to change careers and get out of medicine; DRGs are coming and the impact of those changes on healthcare will create a very difficult operating environment. You need to get into finance.’” No, that wasn’t the deciding factor in Jones’s decision to withdraw from pre-med. Still, he listened to what that cardiologist had to say, and he remembers it today.
For 10 years, he worked in hospitals in all aspects of supply chain management, and ran the supply chain for a large facility. Then, in 1994, he was given the opportunity to create HCA’s first consolidated supply chain organization, servicing multiple hospitals in Richmond, Va. “We were fortunate to have a strong visionary as division president,” he says, referring to Marilyn Tavenner, who today is administrator of the Centers for Medicare & Medicaid Services. “She saw this as an opportunity for us to drive additional value from our size and scale, particularly for the supply chain.”
In 1999, the same year that HealthTrust was founded, Jones came to HCA’s corporate office in Nashville, Tenn., to help launch HCA’s supply chain organization, which today includes seven consolidated service centers and 14 consolidated distribution centers, servicing more than 160 hospitals. “We spent the early part of 2000 taking what we had accomplished in Richmond and other parts of the country, and – with HealthTrust founder Jim Fitzgerald, David Welch and John Paul – created a strategy that transformed HCA’s supply chain into a separate business unit,” he says.
An integrated supply chain
What made the undertaking unique was the relationship between the re-engineered HCA supply chain and HealthTrust, he says. That still is true today. “We understood early on the value of an integrated supply chain from a provider perspective. In essence, we took the view that our organization’s role was to be that of an end-to-end cost manager. We’re able to interpret the broad cost profile of an individual hospital or IDN and identify where opportunities exist for value creation. And that capability is synergistic with the goals of HealthTrust – making sure we help our customers evaluate their entire cost profile in order to create benchmark value.
“That spectrum of opportunity represents a portfolio of contracts, including physician-preference items and purchased services; as well as clinical resource management and supply chain consulting services – such as those offered by HCA subsidiary Parallon Business Solutions,” he says. (Created in May 2011, Parallon provides technology solutions, revenue cycle and other business processes, workforce management services, supply chain solutions, and group purchasing through HealthTrust.)
Just as Jones takes a broad view of the supply chain, so too do participating HealthTrust members. “When we talk to potential clients, the first thing we want to help them appreciate is their total cost platform,” he says. He asks questions, such as, “What key initiatives have you been focused on?” “Where have you seen progress?” “What have you done that hasn’t achieved your goals?” The conversation includes the GPO’s contract portfolio, and with good reason, says Jones. “If you put a strong focus on requirements, and you put a strong focus on sourcing discipline, you can truly realize the benefit of aggregation.
“But that’s only part of the answer. To help a customer, we want them to understand the whole landscape. We have to broaden the playing field, so we really understand the opportunities to lower their costs.”
Broadening the playing field means that clinicians’ priorities, particularly the well-being of their patients, must be part of the discussion, says Jones. “The foundation of our business starts with patients and clinical requirements. Once that is clearly defined, you can then execute a sourcing process that creates value.”
While much has been made of HealthTrust’s roots in the for-profit sector, the key to its success has been, and will remain, its ability to build and sustain a collaborative model of decision-making, says Jones. “It’s getting people aligned, carving out the emotion and staying with the facts. It’s asking, ‘What are we trying to solve for, while continuing to maintain the focus on high quality?’ If you lose sight of that, it’s hard to drive commitment and compliance.”
Healthcare providers face continued financial pressures, and that has accelerated the willingness of healthcare professionals to align themselves with one goal, says Jones. “People realize that a committed model is something that should best drive value. But it has to be done through consensus, in a collaborative way.”
Materials management and supply chain professionals at the hospital and IDN level must be able to build consensus within their own organizations, he says.
“People say, ‘Supply chain needs to move from the basement to the board room,’” he points out. “I think successful providers have had supply chain in the board room for quite some time. And the importance of supply chain is only going to increase.
Supply chain as meeting place
“What I’ve found in supply chain – and why I really enjoy it – is [the fact that] it is the meeting place for the financial and clinical teams to work together. Supply chain must talk to the finance team about the clinical aspects of the business. And we have to convey the financial aspect of the business to the clinical team.” Supply chain is the conduit between the two.
And it turns out, the two sides aren’t that far apart. The bridge between them is data.
“I learned early in my career that physicians are…[drawn to] data and information,” he says. “When you engage a physician, it’s not from the standpoint of, ‘Doctor, I need you to help me lower this cost.’ Instead, we need to be asking them, ‘Doctor, what are you trying to achieve?’
“I’ve had a lot of positive conversations and worked on various initiatives with clinicians over the last 20 years. There’s a lot of buzz that physicians are more willing [to talk about costs]. But I think they have always been willing to do that if you are able to share data and engage them in a way to seek to understand what is important to them.”
There’s no doubt that today, hospitals and IDNs must remove cost from their budgets. But they must do so without sacrificing quality of care. That calls for a broader view of supply chain management, says Jones.
“We help our customers understand their total cost profile,” he says. “We’re pretty relentless at digging in to interpret the data. When you do that, you’re helping the customer understand what they’re trying to solve for, and that expands the conversation.
“If you’re just saying, ‘Let’s look at a comparison of market-based pricing,’ that will only deliver a component of what they’re trying to solve for. I increasingly talk to people from a supply chain perspective and not just a GPO perspective. And when we start having that conversation, it really resonates with them.”