Intalere CEO Julius Heil brings a logistics perspective to group purchasing
For Julius Heil, president and CEO of Intalere, now is not the time to circle the wagons. Yes, there’s uncertainty in healthcare, given the continuing debate in Washington and across the country about healthcare reform. And it’s true that in times of uncertainty, people tend to resist change, says Heil.
But today, participants in the industry – including supply chain executives – need to anticipate change, not resist it, he says.
Intalere intends to do just that by changing the game plan of traditional group purchasing organizations. Although aggregating demand and contracting remain core competencies, Intalere intends to focus on helping members improve the efficiency of their supply chains, and, by extension, those of their suppliers. And the organization is betting that Julius Heil is just the person to help bring that change about.
Heil came to Intalere in May 2016 with a different perspective from that of many GPO executives. He had no prior healthcare experience. He didn’t have much purchasing experience either. Instead, his strength was – is – logistics.
Early lessons learned
Born and raised in Hartville, Ohio, about 50 miles southeast of Cleveland, Heil learned some valuable lessons as a kid. From age 12, he helped out on a local Mennonite farm behind his house. “I cut a deal with the farmer,” he says. “I could ride my minibike on his property if I would help him bring in the hay.”
Lesson learned: “On a farm, ideas are worthless. The only thing that matters is action.” It doesn’t matter if it’s raining or hailing, you have to figure out a way to bring in the crops. “You have to flexible but intense,” he continues. “There’s a lot of work that needs to be done in a single day. My work ethic is based on that experience.”
He got a bachelor’s degree in transportation and logistics from The Ohio State University while working full time for UPS.
With more than 30 years of experience in 10 different industries on five continents, Heil held positions of increasing responsibility in global supply chain operations management, solutions development and implementation, multi-modal transportation systems and global sourcing and procurement strategy. He worked for companies such as CHEP, TransMontaigne, GeoLogistics, Burnham and UPS in support of Fortune 500 clients. He was with Preferred Freezer Services as executive vice president, operations and supply chain, where his leadership of the information technology group enabled a global growth plan.
Immediately prior to joining Intalere, Heil served as an independent consultant, advising organizations in digital technology, analytics, automation, operations and supply chain strategy and global strategic sourcing/procurement.
He is or has been a member of numerous professional organizations, including the Council of Supply Chain Management Professionals, the Warehouse Education Research Council, Institute of Industrial Engineers, the Society of Logistics Engineers, the World Packaging Organization, and the Institute of Packaging Professionals (Certified Packaging Professional Designation).
Personal healthcare journey
What brought him to healthcare was a private matter.
His wife, Elise, was diagnosed with non-Hodgkin’s lymphoma in 1999. The lymphoma remained indolent for years, but became aggressive in 2012. In fact, Elise was considered incurable. “It launched us on a campaign to save her life,” says Heil. That campaign brought them to numerous hospitals and research centers, and multiple clinical trials, including modification of Elise’s stem cells. The campaign was successful, though Elise suffers from the aftermath of the intensive interventions.
“What I found inside the hospital were a lot of good doctors, good nurses and great medicine,” says Heil. “But I also saw a lot of waste.” He watched caregivers open a bottle of saline, take a couple of drops, then throw the rest away. He asked nurses why they would open a suture pack, use the scissors and throw everything else out.
“Ninety-nine percent of people want to do the right thing, and for them, the right thing is providing the best possible care for the patient,” he says. Minimizing waste isn’t top of the list.
“I may not have been knowledgeable about medicine, but I knew how to fix these problems,” he says.
Bert Zimmerli, executive vice president and chief financial officer, Intermountain Healthcare, and chair of Intalere’s board of directors, agreed. Said Zimmerli at the time of Heil’s hiring, “What is particularly impressive is [Heil’s] record of applying solid business acumen to achieve hundreds of millions of dollars in cost savings through technological upgrades, coaching and mentoring, business process restructuring and creating a culture that is built upon trust to deliver innovation.”
Heil was charged with bringing a new perspective to the GPO.
End-to-end supply chain
“Aggregating demand and matching it to supply will always be a core component of Intalere’s offering,” he says. “That’s good for the supplier, the purchaser and Intalere. But the end-to-end supply chain functions are just as important. It’s not just what you buy and for how much, but when you buy, how you buy, how you store it – all things that aren’t related to the actual act of buying.”
Other industries get it, he says. “Manufacturers consider the conversion of raw materials to an end product as manufacturing; everything else is supply chain. I’m trying to instill that approach in healthcare.” Healthcare providers should focus on taking care of patients; supply chain can take care of the rest.
Intalere may not have the largest membership base of the national GPOs, but it has some advantages, says Heil. First and foremost, perhaps, is the Intermountain supply chain. “We want to bring in best practices and redistribute them,” he says. “Driving efficiency and quality, and doing things right the first time, has always been Intermountain’s charge,” he says. “We want to take that message to other hospitals that don’t have Intermountain’s resources.”
Another advantage is Intermountain’s expertise in analytics. “The first thing I told our members at this spring’s [Intalere] conference was, ‘There are two kinds of businesses in the world – digital, and those that don’t yet know they’re extinct.’”
And a third advantage is experience with and willingness to work with suppliers. “One thing a healthcare system can do to achieve best price is to become the best supply chain partner possible – easy to do business with, transparent, willing to share data. It’s supplier relationship management.”
“There are firewalls between suppliers, GPOs, hospitals,” he says. “Data doesn’t cross these lines as it should, so we can’t build an efficient supply chain. We have to find a way to break down the firewalls, understand what the customer wants and then build a supply chain around it.”
A new approach to group purchasing and supply chain management calls for a new approach by Intalere’s field sales force, says Heil. “We tell them, ‘Listen to the customer, understand the business issues, and sell the solution.’” Intalere’s salespeople – many of whom are clinicians – understand the issues facing their hospital and IDN members. “They have an understanding of the questions to ask,” says Heil. “Once they identify the customer’s problem, they refer it to our Solutions Group, the subject matter experts, to help the customer find the solution.”
In the months ahead, look for Intalere to make acquisitions and form strategic relationships with partners that are interested in doing things differently, says Heil.
“There isn’t much in the last year that we haven’t changed. We intend to disrupt the healthcare industry in a very positive manner. You’ll see more of that.”