The Problem: It was more like a challenge that every supply chain faces. In March 2009, Carilion decided to benchmark its expenses to try to reach bigger savings goals. “We looked at every non-labor expense statistic and said, ‘How do we look?’” says Tarantino. The exercise helped Carilion identify potential supply chain savings of between $7 million and $12 million. Based on that estimate, the IDN set a goal: It would take $8 million out of the supply chain in fiscal year 2010, which began Oct. 1, 2009. “We did it,” she says
The solution: “We did some big, innovative things,” Tarantino says. “You can’t get to $8 million by following the status quo.” One example: Carilion saved $300,000 by putting contrast media out to bid.
“It’s change management; educating a lot of people about contracting, about how you aggregate volume, how you negotiate.”
Physician involvement and support throughout the process has been critical to the success of each of the initiatives undertaken, says Tarantino. For example, the chair of radiology was involved in the contrast media initiative.
The fact that Carilion employs its physicians certainly helps in achieving supply chain savings. But Tarantino and others on the team employed the same strategies that any successful supply chain team would. “You share data, ‘Here are the vendors we’re using; here’s what we’re spending; here’s where we think the opportunities are.’ That’s what makes it possible to do this – to educate people, and then follow the steps.”
Rather than the supply chain team leading the peer-to-peer discussion among the doctors, the department chairs and section chiefs do so, says Tarantino. “That’s really the only way it can be done. It has to be a peer-to-peer discussion.” That’s true whether physicians are employed or not, she adds. “Physicians respect each other, they speak the same language.”
“[It’s more about] your communication ability, that is, your ability to share information and data that’s accurate,” says Tarantino. “And your relationships are important. Have you built trust?”
Tarantino was selected as JHC’s Contracting Professional of the Year. To read the full feature on Tarantino and Carilion, click here