Striking a Balance

For Cleveland Clinic, teamwork leads to excellent patient outcomes.

At Cleveland Clinic (Cleveland, Ohio), patients come first. For Bill Donato, executive director of supply chain management, and his team, that means maintaining a constant balance of quality, cost and outcomes. “We must balance innovation, education and research while maintaining Cleveland Clinic’s mission of putting patients first,” he says, adding that they do so by supporting their physicians “who deliver world class healthcare.”

“There’s great teamwork here between patient care and support services,” Donato continues. “We get to see excellent patient outcomes, and being part of that team that helps deliver that care is very rewarding and the most exciting part of our role.” “Business consultants” to over 2,700 physicians and clinicians at Cleveland Clinic, the supply chain management team supports and facilitates decisions pertaining to medical devices, equipment, service and supplies. The department oversees a portfolio of contracts, he explains. “Our sourcing group manages the portfolio, while distribution and fulfillment groups ensure that supply needs are met.”

Reaping the rewards
The patients at Cleveland Clinic aren’t the only winners. In 2010, the hospital system realized $45 million in cost savings, thanks to the team effort put forth by supply chain management. Led by Carrie Steele, a director of supply chain, the team explored the reasons behind – and solution to – a steadily rising use of nitric oxide in cardiovascular surgery. “Carrie is responsible for monitoring and managing the dollars spent on supplies in anesthesia, imaging, cardiology cardiothoracic surgery and respiratory therapy,” says Donato. “With a degree in finance, an MBA and years of experience in medical sales [prior] to joining our department, she is a master at her job.”

After watching nitric oxide usage continue to increase, Steele worked with the departments of cardiac anesthesia, cardiac surgery, lung transplant and respiratory therapy, as well as cardiothoracic anesthesiologist Erik Kraenzler, MD, to become better educated on usage patterns. “They read the scientific literature and got other physicians involved,” says Donato. “Based on their findings, they created protocols to manage usage. These changes had dramatic results, and within a month, nitric oxide usage dropped.” Indeed, it has decreased by 60 or 70 percent, providing Cleveland Clinic with over $1 million in annual savings.

This year’s cost savings look equally promising, according to Donato. “We’re putting a lot of effort into our cost visibility project, which began when Dr. Toby Cosgrove, our CEO and president, [decided] to spread the message [about the cost of] surgical supplies,” he says. “Our goal is to inform our surgeons about the costs of the medical devices and equipment they use, and to encourage them to use products that are cost-effective, without compromising quality.

“We’re educating our surgeons by placing posters in strategic locations in operating rooms, on supply cabinets and on hand washing stations,” Donato continues. “For example, a poster about reprocessed catheters illustrates the significant price difference [between reprocessed and new ones] and notes that they are equivalent in safety and quality. Another poster about waste asks the question, ‘Does everything need to be opened in advance?’”

Last year, the pilot project was well received, notes Donato. “This year, we’re expanding the cost visibility project at our main campus near downtown Cleveland and eventually to our community hospitals. At the end of 2011, we’ll go back and look at our overall cost savings.”

A leader of change
The healthcare delivery landscape is quickly changing, Donato points out. “The healthcare supply chain is going to start looking more like it does in other industries as large, innovative health systems look for ways to save costs through smart sourcing decisions,” he says. “Waste is another area where there is room for savings and where there will be many improvements and efficiencies realized.”

Cleveland Clinic is “well-positioned to lead change in the areas of sourcing and process improvements,” he explains. For one, the IDN’s group practice model, whereby its physicians are salaried – works, he says. The organization’s volume, brand and global reach should also help it continue to adapt to change. “Cleveland Clinic’s supply chain management will continue to work with our physicians to look for opportunities for innovation, with the ultimate goal always being the highest quality outcomes for our patients.”

About Laura Thill

Laura Thill is a contributing editor for The Journal of Healthcare Contracting.

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