Meeting challenges at Cleveland Clinic head-on has led to growth for the organization, as well as for its supply chain executive director, Simrit Sandhu.
By Laura Thill
When she joined Cleveland Clinic in 2006, Simrit Sandhu could not predict the scope of the IDN’s mission, nor her role in that mission. For the past nine years, she has immersed herself in her organization’s multi-year transformation, with a growing focus on cost reduction and infrastructure expansion.
Since assuming her current position as the head of all supply chain enterprise operations in 2013, Sandhu has played a key role in re-engineering Cleveland Clinic’s infrastructure, including item master and analytics redesign, systems realignment, procure-to-pay optimization, and distribution and logistics redesign focused on Just-in-Time delivery. A project she has found most challenging, however, has been the launch of Excelerate Strategic Health Sourcing. “Excelerate is a provider-led joint venture between Cleveland Clinic and VHA,” she says. “It is a group purchasing organization that focuses on providing access to market leading contracts by leveraging the clinical excellence of Cleveland Clinic and best-in-class analytics.
“The journey to build this company has been challenging,” she continues. “Over the last five-to-seven years, we have worked hard to build a sustainable cost-basis reduction process through physician leadership, clinician engagement and evidence-based sourcing efforts. We believe that the process and its results are valuable to all like-minded providers.” To implement this strategy, her team defines value as quality/cost. Taking that one step further – defining quality and establishing clinical comparability and equivalence of products – has been “a multi-year journey,” she adds.
Indeed, Sandhu’s approach has been successful. “At Cleveland Clinic alone, we have saved $230 million in less than five years and have a standardized portfolio, often with a lower market share vendor being awarded the contract based on proven product equivalence, along with appropriate utilization guidelines where applicable,” she points out. “We’ve [always known] we could not build this offering alone, so [earlier in the process] we began looking for a partner that could [support] us in our endeavor.” That partner turned out to be VHA, she notes.
From the beginning, both companies worked hard to determine the strategy and establish infrastructure for Excelerate, says Sandhu. “From sourcing to sales and operations, we have leveraged expertise from both owners.” And, while Excelerate provides a complete portfolio, the focus has always been to provide an enhanced portfolio for physician preference items (PPI), she points out. Resources such as clinical data, market research and her team’s experiences/ retrospective data at Cleveland Clinic have aided in the development of a portfolio designed to “serve the needs of like-minded members that are looking to make evidence-based decisions and lower their cost basis for patients,” she says.
That said, developing such a portfolio was not an easy task, notes Sandhu. “It has been an ongoing process since we launched Excelerate,” she explains. “We are finally at a point where we believe we have a best-in-class contract portfolio that can cover the PPI needs of our members while enabling clinical alignment. What keeps us motivated is the ability of Excelerate’s processes to truly begin to engage clinicians across entities in evidence-based supply contracting and utilization.”
More to come
In the year ahead, Sandhu hopes to build on her team’s success landing market-leading contracts for its Excelerate members by continuing to drive value, as well as growing the membership base. “Our goal is to continue to find new and innovative ways to provide contracts and services for our membership,” she says. “Contract on-boarding is the first step a member should take.” She foresees Excelerate developing and leveraging the tools and resources of its owners and members, in order to provide resources to drive utilization management of products and achieve further successes, she points out.
“We are enhancing physician engagement-driven utilization guidelines that help maximize value within and across contracts and suppliers,” she continues. “We are focused on tools that will create cost-performance transparency for clinicians and administrators to enable informed decision making. We realize that the future is focused on population health, and we will continually strive to make our contract portfolio and its supporting analytical tools and services meaningful in this new paradigm shift.”
In order to reach this goal, Sandhu counts on support and partnership from her suppliers, including a willingness to:
- Establish shared goals and open communication.
- Present a united front to the clinical community.
- Value transparency and data sharing, allowing for performance measures to be established for both parties.
- Focus on value-based innovation that truly drives patient value vs. user preference.
- Understand and respect the IDN’s processes and focus on compliance.
- Foster mutual trust.
- Align a sales model to the IDN’s value-based sourcing model (Quality/Cost).
- Support the Excelerate program.
Total cost of ownership
Looking ahead, Sandhu anticipates some transformation in healthcare in years to come. For one, she believes the industry will be defined by “a more clinically engaged, formulary-based and evidence-driven approach for procuring healthcare products reflected in product standardization and utilization management-based contracting practices,” she says. “Global data standards will create transparency to supply chain waste, and our contracts will demonstrate our ability to hold both providers and suppliers contractually accountable to helping lower supply/service costs. We will begin to truly understand and meaningfully impact total cost of ownership and create a more efficient supply chain for our patients.”