MSS: Value Beyond Price
For Dee Donatelli, serving as president and CEO of Mid-America Service Solutions (MSS) is a dream come true.
She began her career in nursing at St. Francis Regional Medical Center (now Via Christi Hospital St. Francis) in Wichita, Kan., and then became director of supply chain management. In 1994, she began a career in supply chain and clinical consulting, working with such companies as BD Healthcare Consulting, Cap Gemini Ernst & Young, Owens & Minor, VHA (now Vizient), Hayes Inc. and Navigant. She returned to Vizient in September 2016 to lead MSS, a Vizient “Member Business Venture” in Overland Park, Kan.
“All of my previous experiences have prepared me for this very diverse opportunity,” she says. “As a nurse, I worked from the bedside to the executive suite. I understand the clinical application of products and the hard work of clinicians, and have always been a champion for a clinically integrated supply chain.
“An evidence-based approach to supply chain is one that I carried forward from my nursing leadership position to the purchasing department. I have always prided myself on working to achieve a win-win for all parties served, but never forgetting that the ultimate goal is delivering quality patient care. As a consultant, I worked with many of the leading healthcare facilities, assisting in the creation of more than 100 value analysis programs nationwide. Working for MSS allows me the opportunity to work with the owners to create new and innovative programs and services in the most disruptive period of GPO history.”
Her primary task at MSS? Driving value.
Mid-America Service Solutions is a limited liability corporation with nine health system owners, explains Donatelli. It covers a 10-state geographic area that includes Montana, Idaho, Wyoming, Colorado, New Mexico, Nebraska, Iowa, Illinois, Missouri and Kansas.
MSS has 108 members and serves 238 facilities, representing more than $4.5 billion in supply spending. The organization also serves 121 member affiliates. More than 200 non-acute-care facilities are associated with MSS, but are not counted in the total number of member participants.
The nine owners make up the board of directors, which establishes the MSS membership criteria. The primary tenet of membership is being a Vizient member located within the MSS geography. The board operates under shared governance (equal vote) and decision-making on behalf of the members.
When MSS was launched in 2009, its founders envisioned creating a consolidated service center, which would offer multiple services as well as a centralized order management system for its members, explains Donatelli. However, MSS experienced such rapid geographic growth that it needed more than one distributor to service the network, as well as other challenges, including:
- Duplication with members’ systems and normal distributor services.
- The fact that some members were not able to use the selected CSC distributor partner.
- The expense to manage and maintain the center.
For all these reasons, the organization decided against proceeding with the consolidated service center. But the RPC continued to explore opportunities, not the least of which was contracting.
MSS chooses to use Vizient as its group purchasing organization, says Donatelli. Vizient’s entire contract portfolio is available to all members.
“MSS has several MSS-only contracts outside of Vizient, but that is not our primary area of focus,” she says. “The foundation upon which MSS is based is contract enhancement, and we currently have approximately 300 contracts. Our goal is to manage 75 percent of MSS member supply spend.” MSS also has a statement of work – SOW – with Vizient to provide employees and services, such as legal and technology platforms, to run the corporation. Donatelli as well as all of the MSS staff are Vizient employees.
“The number one thing MSS must do is drive commitment,” she says. By using Vizient’s information technology platform, MSS staff can aggregate the supply spending of all its members, to check on compliance and to identify new contracting opportunities. Members are expected to maintain an 85 percent commitment to MSS contracts in most areas.
“We are highly compliant on contracts and loyal to our supplier partners,” says Donatelli. “As a result, the supplier community is eager to do business with us. Due to the high commitment and compliance demonstrated in the marketplace for nearly a decade, we are now on second or third, and in some cases fourth, round of renegotiations with suppliers.
“The keys to success are what you would expect – volume, commitment and compliance. Less obvious but equally important are peer-to-peer trust and collaboration and a lot of hard work. Our members find great value in the benefits we are able to negotiate on their behalf, which then drives their strong loyalty and commitment to our contracts.
“Our success in all of these areas is demonstrated by many contracts and renewals where MSS has proven over a 90 percent compliance rate on committed volume.
“While I feel all of our contracts are successful, the most beneficial may be those with the highest levels of compliance, which bring added value to our smaller members,” she says. “Understand that all members, regardless if they are a 30-bed critical-access hospital or a major health system, garner the same contract value, All MSS members receive the highest tier and value available through our committed contracting and compliance mode.”
Getting low prices is essential, but “in today’s difficult reimbursement landscape, it is increasingly important that we align with our supplier partners to drive value beyond the price,” says Donatelli.
A clinical focus
MSS’ emphasis in 2017 is on building a clinical focus around its highest supply-spend categories – clinical and physician preference items, says Donatelli. With a newly hired director of clinical programs, MSS plans to enhance its clinically integrated supply chain approach. “That’s the space I know really well,” says Donatelli, a Registered Nurse.
The goal is to establish evidence-based standards and formularies for clinical practice and product usage, she says. Working with clinical subject matter experts from its owner facilities, MSS’ chief executive councils will oversee task force work focusing on utilization management, clinical outcomes and overall process improvement to drive additional value beyond contracting.
“Making that scalable is probably our largest challenge,” says Donatelli. “Our approach is to install the ‘vanilla’ version, and let each organization add its own color.”
MSS is also exploring ways to enhance value in the areas of capital asset management and purchased service offerings. “We believe our highly committed model and historic success can drive incremental value in these two large spend categories.”
MSS expects help from its suppliers, she adds. “It’s not enough to keep going back to our suppliers three or four times, asking for price concessions. We want to work with partners who are willing to work with us on creating additional value, and furthering our mission of providing the highest standard of care at the lowest cost.
“The corporation is looking at innovative business ventures that make sense not only for the nine owners, but for all those who otherwise would not have access to these benefits,” says Donatelli. “Part of the MSS mission is to do what we can to benefit all of our members, especially the smaller ones. That’s what has resonated with me since joining MSS. I’m so dedicated to helping smaller hospitals – particularly those in rural communities – keep their doors open. Our board continues to explore creative ways to do that.
“I continue to be impressed by the commitment of the owners of MSS to make decisions on behalf of the entire membership and to work every day to be the lowest-cost provider of the highest-quality care in the communities our members serve. This opportunity is a dream come true for me.”