Welcome to the Journal of Healthcare Contracting’s annual listing of the Ten People to Watch in Healthcare Contracting, each of whom was selected based off of suggestions from readers.
Chris Baskel
System director,
supply chain management
Spectrum Health
Grand Rapids, Mich.
Ed Bonetti
Director of supply chain operation
Lifespan Corporation
Providence, R.I.
David Hargraves
Vice president clinical supply chain
University of Pittsburgh Medical Center (UPMC) Pittsburgh, Pa.,
and vice president operations
BioTronics, Inc.
Laura Kowalczyk
JD, MPH, AVP supply chain services
University of Florida Health Shands Hospital
Gainesville, Fla.
Mary Beth Lang
ScD, MPM, RPh, vice president, HC Pharmacy and University of Pittsburgh Medical Center (UPMC),
Pittsburgh, Pa.
Vivien Lunsford
Director, supply chain management
Southeastern Health
Lumberton, N.C.
Bill McFarland
Senior director, materials management
Cambridge Health Alliance,
Cambridge, Mass.
Richard Rouse II
Corporate director of materials management
Southern Illinois Healthcare
Carbondale, Ill.
Deborah Petretich Templeton
Chief, care support services
Geisinger Health System,
Danville, Pa.
Donna J. Van Vlerah
Vice president supply chain
Parkview Health, Fort Wayne, Ind.
System director, supply chain management, Spectrum Health, Grand Rapids, Mich.
Nine hospitals; 130 ambulatory and service sites; 1,370 acute care beds and 568 skilled nursing beds; total annual non-salary expense of $1.1 billion; reportedly the largest regional provider of cancer care and largest children’s hospital in West Michigan; 1,500 physicians.
With over 31 years of experience in healthcare supply chain management, Chris Baskel has been credited with implementing over $40 million in cost savings through 1,100 distinct projects, ranging from devices to service agreements. Prior to joining Spectrum Health, he worked with two large academic medical centers and a community-based 10-hospital health system. He joined Spectrum Health in 2002, where he is responsible for enterprisewide logistics and contract management at Spectrum Health. In 2003, he helped create Great Lakes Hospital Purchasing Network, a VHA supply network comprising 12 non-owned health systems in western Michigan, and in 2005 he started the Michigan Minority Business Development Council for healthcare, also in western Michigan. As chairman, he has helped the Council establish over $5.2 million in new business for 18 minority business establishments in Michigan.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Chris Baskel: Working collaboratively with our cath lab and operating room management teams, as well as our physicians, we have reduced the supply cost for cath lab and cardiac rhythm management (pacemakers and defibrillators), along with drug-eluting stents by $2.2 million and hips and knees by $1.1 million in annual expense. Our efforts earned Spectrum Health the VHA national award for physician preference cost reduction, as measured by VHA’s PriceLYNX benchmark data against 1,600 hospitals.
JHC: Please describe a project you look forward to implementing in the next year or two.
Baskel: We have identified nine decentralized purchased-service contract opportunities to standardize across our health system. The first, elevator service, is now complete. In this process, we identified 12 individual elevator service contracts across our health system. Each of the 12 contracts was implemented without a purchase order, in a decentralized format, all having separate individual contract expiration dates. After finishing this project, we now have one centralized elevator service contract and have saved 22 percent in the process.
JHC: What is the most important quality you look for in a supplier partner?
Baskel: We look for a willingness to work collaboratively in aligning incentives that bring value to both companies over a sustainable period of time.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?\
Baskel: The greatest change will be evident with regard to physician preference items. Supply chain contracting, in conjunction with our physician partners, will begin to use evidence-based medicine and quality outcomes in defining specific product attributes (not brand preference), which will establish the clinical standards required for contract awards. This then will set the stage in the emerging physician preference generic market for the selection of non-brand products that meet these criteria.
Director of supply chain operation, Lifespan Corporation, Providence, R.I.
A comprehensive, integrated academic health system affiliated with the Warren Alpert Medical School, Brown University; 1,155 beds; 12,430 employees; four acute care hospitals, ambulatory care centers and outpatient laboratory services; $1.68 billion in total operation revenue and $2.22 billion in total assets in 2011; annual supply expense of $350 million.
After working for several Fortune 500 companies, including Belo, Hexagon Metrology and Pentair, Ed Bonetti joined Lifespan Corp. in 2008 as director of supply chain operations. His non-hospital perspective, along with his leadership, operational, lean and change-management skills have prepared him well for his current responsibilities, which include oversight of sourcing and procurement, distribution, and value-analysis activities.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Ed Bonetti: A project that I have found to be extremely rewarding is participating in the strategic development of clinical programs and/or service line expansion. [Through my] understanding of the financial, operational and clinical pressures confronting Lifespan, I have been able to work with vendors to identify creative and sustainable ways our organizations can work together. Leveraging my commercial expertise, I have contributed to the launch of programs whose results – whether volume, revenue, or clinical benefits – are routinely meeting or exceeding projections. Specific programs I [have been involved in include] the Total Joint Center of Excellence, transcatheter aortic valve replacement (TAVR), and hybrid OR to support minimally invasive epicardial ablation procedures.
JHC: Please describe a project you look forward to implementing in the next year or two.
Bonetti: I am excited to launch a program focused on working with our surgeons to reduce costs associated with the variances in physician-practice patterns. Using comprehensive analytical tools I have implemented, we are able to quantitatively identify cost variances within a specific service line, for a specific procedure, performed by a specific surgeon. Furthermore, we can associate the specific procedural cost data with key performance metrics for the respective procedure(s), including clinical outcomes, length of stay and patient experience. Using this information, we will work with our surgeons to identify where we can minimize practice pattern variation to reduce cost, while simultaneously improving the aforementioned performance metrics.
JHC: What is the most important quality you look for in a supplier partner?
Bonetti: I look for vendors who understand and grasp the multi-factorial challenges providers are facing in today’s evolving healthcare market; who have taken the time to educate themselves on the specific challenges and opportunities of my organization; and who present creative ways to [facilitate us working] together to improve financial performance, operational efficiency, clinical outcomes and the
patient experience.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Bonetti: I expect to see greater levels of transparency, collaboration and strategic alignment between providers and suppliers. These changes will enable providers and suppliers to work together to identify and implement the innovative solutions needed to meet the changing healthcare delivery system.
David Hargraves
Vice president clinical supply chain, University of Pittsburgh Medical Center (UPMC), Pittsburgh, Pa., and vice president operations BioTronics, Inc.
Over 20 academic, community and regional hospitals; 4,500+ licensed beds; 400 outpatient sites, plus various rehabilitation, retirement and long-term-care facilities; close to $1 billion in annual spend.
David Hargraves’ past supply chain leadership experience with Alcoa and Ariba, as well as a biomedical equipment technician position with the U.S. Navy, prepared him well for his current position with UPMC, where he currently oversees clinical engineering (BioTronics, Inc.), strategic sourcing, procurement operations and value analysis.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
David Hargraves: We designed, built and opened a 148,000-square-foot consolidated service center and moved to a manufacturer-direct model. Despite significant gains in operating efficiency in our former facility, hospital acquisitions and organic growth had stretched our internal capacity and forced us to further leverage our external distribution relationships. The new facility provides space for expansion to support internal growth, as well as support future hospital affiliations/acquisitions. This relocation and expansion has permanently reduced supply costs by millions of dollars through the elimination of the external distribution markups and provided us the opportunity to optimize order volumes and deliveries to reduce freight and labor cost. Additional benefits have included:
- Improved efficiency through reduced number of orders and reduced
cross docking. - Waste reduction through the elimination of double handling of products.
- Increased compliance to preferred suppliers and products.
- Lowered risk exposure due to shortened supply chain.
- Higher fill rates and fewer stock outages, leading to improved customer satisfaction.
Increased capacity to service additional demand, enabling us to service 100 percent of our acute care facilities.
JHC: Please describe a project you look forward to implementing in the next year or two.
Hargraves: We look forward to integrating UPMC’s wholly owned subsidiary, BioTronics Inc., into the UPMC supply chain. Biotronics provides preventative maintenance and repair services for medical and imaging equipment, surgical instruments, clinical and laser/image guided support and equipment management. Integrating BioTronics into the UPMC supply chain will lead to enhanced collaboration of our fleet equipment initiative, as well as added service lines (lab equipment and lithotripsy) and improved management and oversight of external equipment service contracts.
JHC: What is the most important quality you look for in a supplier partner?
Hargraves: Integrity. This means a supplier who will not hide quality issues when they arise or attempt to push through price issue when they are not justified.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Hargraves: The biggest change will be the adoption of contractual commitments by more medical device manufacturers to go at risk for patient outcomes. Increased consolidation among providers, coupled with a nationwide increase in sophistication in hospital supply chain managers and the implementation of the Affordable Care Act, will help end the era of suppliers being able to push price increases on providers with no corresponding increase in clinical efficacy.
Laura Kowalczyk
JD, MPH, AVP supply chain services, University of Florida Health Shands Hospital, Gainesville, Fla.
Level 1 trauma center with 973 licensed beds; cancer center; children’s hospital; critical care center; rehabilitation center; behavioral health center; over 900 UF College of Medicine and community physicians, together with 7,297 UF Health Shands skilled nurses and support staff; primary care, family medicine and subspecialty tertiary and quaternary services provided to patients with highly complex medical conditions; total annual purchasing volume of $240 million.
Laura Kowalczyk brings an interesting perspective to work each day. Prior to joining University of Florida Health Shands Hospital, she worked as a private practice attorney in healthcare. After transitioning into healthcare supply chain management, she worked for two major healthcare systems before moving to UFHealth Shands. Today, she oversees strategic sourcing, materials information system, publication services, central distribution, central sterile processing, equipment distribution, house and surgical linen services, shipping and receiving, and the integrated service center.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Laura Kowalczyk: Endomechanical conversion. Being new to the facility, without the benefit of established relationships, presented an early hurdle in my tenure. Fortunately, it also provided an opportunity for me to immediately develop these relationships. Overcoming this has [enabled] supply chain services [to better interact] with the clinicians and administration. More important, this has become supply chain’s new philosophy of complete transparency with the clinicians and the formation of partnerships, which have been aggressively perpetuated over the last two years in all of supply chain’s interactions with both administration and clinicians.
JHC: Please describe a project you look forward to implementing in the next year or two.
Kowalczyk: There are several projects that we will pursue this year. The project of greatest impact will be [to increase] automation in supply chain services, not only to mine data but to support our efforts in developing metrics and reporting around product price parity, standardization, outcomes and inventory management. [We are excited to work] with key partners to develop a system-based workflow to track and report product introduction and evaluation, with ongoing product outcomes and incident reporting. This will enable us to create a product performance database and tie this performance to our ongoing quality initiatives.
JHC: What is the most important quality you look for in a supplier?
Kowalczyk: The ideal supplier partners are strategically focused over the long-term, regardless of good or poor economic trends. They must interact with our organization on the basis of respect, open communication and trust. We seek suppliers who routinely provide opportunities and value [and support our] needs, to focus on economics and outcomes.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Kowalczyk: As we continue to move through challenging economics, especially in the state of Florida, suppliers and providers must be flexible and transparent around creating relationships that not only address costs and standard terms, but support the need for balance between financial and quality outcomes.
Mary Beth Lang
ScD, MPM, RPh, vice president, HC Pharmacy and University of Pittsburgh Medical Center (UPMC), Pittsburgh, Pa.
$10 billion nonprofit, integrated global health enterprise; 5,000 physicians; over 20 academic, community and specialty hospitals; over 5,000 licensed beds; over 500 outpatient sites; long-term-care and retirement facilities; a growing international and commercial division; $1.9 billion in annual spend and $10 billion in annual operating expenses.
Mary Beth Lang originally worked as a pharmacy manager at UPMC’s flagship hospital before joining Amerinet. In 2010, she returned to UPMC as a leader in the supply chain management department, with a focus on one of the health system’s commercial subsidiaries, Prodigo Solutions®. In 2011, she assumed leadership of the pharmacy supply chain and the for-profit company, HC Pharmacy Central, Inc. Today, she continues to oversee HC Pharmacy and is vice president, commercial services, for Prodigo Solutions.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Mary Beth Lang: The challenging environment that UPMC is facing with compressed reimbursement and significant expense reductions in FY14 is driving the adoption of horizontal service line management. UPMC executives asked supply chain management to assume responsibility for running the pharmacy supply chain’s horizontally integrated, centralized mechanism for controlling pharmaceutical spend under a consolidated services procure-to-pay for-profit company, HC Pharmacy. SCM has added operational efficiency through focus on people and process in the first 12 months. Additionally, HC Pharmacy leadership has been added to the UPMC Health System Pharmacy & Therapeutics Committee, to expand the pharmacy service line efforts to increase formulary compliance and limit product selection.
JHC: Please describe a project you look forward to implementing in the next year or two.
Lang: The focus will move from people and process to adding technology to HC Pharmacy to continue to mirror the best-in-class level that UPMC supply chain management has attained. HCP is fully deploying ProdigoXchange for EDI transactions to leverage higher functionality and more efficient communication at a lower cost over the current solution. HCP [also] will connect pharmacy contract vendors to ProdigoMarketplace and update mobile supply chain functionality in the distribution center and at hospital customer locations, for order and receipt efficiency and inventory visibility across the UPMC enterprise.
JHC: What is the most important quality you look for in a supplier partner?
Lang: Trust: Strategic suppliers recognize that product selection criteria extend far beyond price to the consideration of operational and clinical requirements valuable to UPMC and the patients we serve.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Lang: Under accountable care, health systems are relying on new approaches to more effectively treat diseases to reduce over-diagnosis, over-treatment and practice variation, [and to deliver] cost-effective, quality care across the continuum. The role of the supply chain professional will evolve from acute-care-centric to a more significant role of population health, focused on sourcing related to wellness, prevention and measurable outcomes under value-based contracting with suppliers.
Vivien Lunsford
Director, supply chain management, Southeastern Health, Lumberton, N.C.
One acute care hospital; 40 primary care, specialty and urgent care clinics; fitness centers with rehabilitation services; cancer center with home health/hospice; inpatient medical center; long-term-care center; 452 licensed beds; $295 million in operating expenses for FY2012.
Vivien J. Lunsford joined Southeastern Health in 1988, originally as manager of supply chain and more recently as director. Today, she oversees procurement, med/surg and service contracting, distribution, laundry processing, linen distribution, transporting, printing and mail services for the entire organization.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Vivien J. Lunsford: In 2012 we had to decide whether to renew a just-in-time contract. Over the past 15 years, we have achieved significant success reducing inventory throughout the organization by utilizing a low-unit-of-measure ordering with EDI transactions. We have maintained an on-site perpetual inventory in supply chain management of $60,000 for over eight years. We have four surgical services departments utilizing our MMIS. And, to meet the challenges of the Affordable Care Act, I recognized that a higher level of service was required to ensure we support our clinicians in our new care delivery model. I developed an RFP that focused on my organization’s requirements [and enabled the vendor] to be flexible and creative. Vendor responses had to be entered directly into the RFP, enabling a fair evaluation and a quick decision. One result has been a contracted unadjusted fill rate of 99 percent, with penalties for noncompliance.
JHC: Please describe a project you look forward to implementing in the next year or two.
Lunsford: I have been a project lead on a lean initiative, strategic kaizen, [designed] to standardize the process of obtaining capital equipment and related service contracts. The team has produced a future state interactive value stream map, allowing our customers to obtain information about the responsibilities of the stakeholders, forms [they should] use, detailed instructions and benefits. We recently used this model to purchase new anesthesia machines and save our organization over $200,000.
JHC: What is the most important quality you look for in a supplier partner?
Lunsford: Most important is whether or not a supplier will become an effective partner is the quality of their employees. I was impressed by the employees of [our prime vendor]. Though you would expect a closer interaction with leadership and those involved in the technical or business related activities of the company, I also observed the relationship between the warehouse staff and the top leadership indicating a strong sense of team connection.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Lunsford: The biggest change we need to [see] in healthcare contracting is an alignment of goals between the suppliers and the providers. The hard work and focus has to be on prevention, not treatment. Companies that succeed will be those that partner with healthcare providers and the communities to develop products that keep people healthy for as long as possible.
Bill McFarland
Senior director materials management, Cambridge Health Alliance, Cambridge, Mass.
Three hospital campuses; 350 inpatient beds; two hospitals and 22 clinics; an extensive primary care network and employed physician model; total CY2012 purchasing volume was $110 million.
Bill McFarland joined Cambridge Health Alliance (CHA) in 2000 as senior director, support services, which includes facilities, environmental services, food services, security, parking & transportation, and materials management. In addition, he chairs the medical and surgical value analysis committees, and serves as secretary for the capital expenditure review committee, on-call administrator and is chief of emergency preparedness planning. In 2012, he also became president of the New England Regional Healthcare Co-operative.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Bill McFarland: Recently, I was involved in the planning, bidding, standardization and purchase of IV infusion pumps. These pumps, often referred to as smart pumps, will improve patient safety and improve staff productivity. This project has involved working with nursing, pharmacy, IT and biomedical engineering. The pumps are able to update wirelessly while safeguarding against medication errors.
JHC: Please describe a project you look forward to implementing in the next year or two.
McFarland: Currently, we are working with human resources, physicians and ancillary departments on a managed service provider relationship. Controlling temporary staffing costs has been a huge challenge for the Alliance for several years. It is hoped that by working with a vendor using a managed service provider approach, CHA will be able to standardize the approach, rates and terms and conditions that we currently experience with several of our vendors. We are also looking to automate the request through an invoicing process, which we hope will result in additional savings to the organization.
JHC: What is the most important quality you look for in a supplier partner?
McFarland: We look for vendors who engage in a dialogue about a mutually beneficial relationship and who are willing to optimize the relationship on both sides of the equation. In order to do this, each party needs to understand the other’s needs and be willing to be as transparent as possible about their issues and concerns. It is hoped that through an open and honest dialogue we can create a corresponding win-win opportunity.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
McFarland: The shift of healthcare reimbursement away from fee-for-service to covered lives will test supply chain professionals. Reimbursements will be in decline during the transition. Once [we have] converted to the new reimbursement system, healthcare organizations will need to cover a broader supply chain, as incentives focus on keeping patients healthy rather than treating patients who are ill. Preventative medicine is going to be a challenge to determine what will be effective. Traditional purchasing patterns will undergo changes, forcing professionals into areas where they are not currently proficient. And, value will be influenced by more consumer demand than the traditional captive market.
Richard Rouse II
Corporate director of materials management, Southern Illinois Healthcare, Carbondale, Ill.
Three hospitals, two physician clinics and 36 physician offices; 297 beds; $50 million in supply spend.
After joining Southern Illinois Healthcare in 1983, Richard Rouse II spent three years in central supply before moving into materials management. After working five years as the shipping/receiving clerk, he received a series of promotions – first to warehouse manager, then supply chain manager and finally to director of materials management five years ago. Today, his responsibilities include oversight for all aspects of supply chain management, including procurement and delivery of supplies to the IDN’s three hospitals, two physician clinics and 36 physician offices. In addition, he is responsible for central supply at two hospitals, where he directs the system value analysis teams.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Richard Rouse II: Over the last 24 months we have begun putting plans in place to maximize our GPO relationship. The first step in the process was to implement a benchmarking tool to calculate where we were in comparison to other facilities our size. Next, we looked at all the items we were purchasing and made sure we had some type of contracts and were slotted on the correct tier. The third step was to develop and implement a systemwide value analysis team to help with standardization of products across the system. It has taken almost two years to accomplish this, but we are starting to see our overall price index drop.
JHC: Please describe a project you look forward to implementing in the next year or two.
Rouse: We are implementing lean daily management across our system. We have started the process in our two central supply departments and will also be doing so at our central distribution center this summer. This will allow us to look at all of our processes and work to eliminate waste. We know we have to become more efficient as we work through today’s challenges.
JHC: What is the most important quality you look for in a supplier partner?
Rouse: I look for suppliers that align with our mission and values. I think it is very important to have a solid partnership that allows both sides to look for solutions and communicate them.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Rouse: As healthcare reform continues to put pressure on us to reduce supply cost, price transparency is going to become more important. Physician and clinical support are going to be a very important link to negotiating the best price for a quality product. As we become better informed to make these decisions, vendors will need to develop strategies that align with our needs.
Deborah Petretich Templeton
Chief, care support services, Geisinger Health System, Danville, Pa.
Services 2.6 million residents of Central and Northeast Pennsylvania; 1,363 inpatient beds; four acute care platforms; 41 community practice sites; a drug and alcohol chemical dependency center; two long-term-care facilities; annual spend of $3 billion.
After working two summers in the pharmacy internship program at Geisinger Health System, in 1981 Deborah Petretich Templeton was hired as a staff pharmacist. Her role at Geisinger grew over the years, and in 2013 she was appointed chief of care support services. Today, she oversees the corporate pharmacy, which includes acute care, home care, health plan and retail programs, as well as supply chain services.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Deborah Petretich Templeton: The most rewarding project has been the creation of a new service line called care support services. Under this umbrella, we will house our supply chain and new consolidated pharmacy service lines to leverage opportunities across the health system. With the creation of the enterprise (corporate) pharmacy, our patients can experience enhanced benefits, such as the use of common drugs across the system and a cohesive approach to their use across disciplines.
JHC: Please describe a project you look forward to implementing in the next year or two.
Templeton: In conjunction with nursing services, we will be launching a charter floor in a new care delivery model through a project we call Healthcare Enabled Logistics Program (HELP). Project HELP is designed to remove the caregiver from logistics activities, such as hunting, hoarding and gathering of supplies and equipment needed to deliver care. By removing the caregiver from these tasks, nurses should be able to spend more time on patient care, focused on improving quality indicators and patient satisfaction. We also are redesigning the delivery of the supplies and equipment by consolidating the delivery methods for items like linen, mail, supplies, etc.
JHC: What is the most important quality you look for in a supplier partner?
Templeton: We look for the willingness to understand the vision that we have for care delivery and process transformation, [as well as the willingness] to look within their own shops for activities that we can share to improve or change the way we do business, to remove cost and/or to make healthcare safer and more effective for our patients.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Templeton: We can expect to see an understanding of requirements of new population management structures, [such as] cooperative models, shared services and exchanges. We also will see merged patient needs eliminate the class of trade boundaries; payer economic oversight/provider quality delivery; contracting partners; risk stratification and control to decrease cost; outcomes-driven decisions; and a greater patient role in disease management. Data standards in healthcare application will be a must. And, we will see new relationships emerge (e.g., vendor reps’ role as sales vs. service and value vs. volume).
Donna J. Van Vlerah
Vice president supply chain, Parkview Health, Fort Wayne, Ind.
Six hospitals (eight facilities); 777 beds; annual revenues of $1.2 billion; 2012 spend of $150 million; inpatient discharges of 33,038; outpatient count of 340,302; service area population of 820,000; 8,500 co-workers; $150,000,000 in charity care.
Following a 20-year career with the U. S. Marine Corps as a logistician, and position in contracting and compliance & ethics in the aerospace industry, Donna J. Van Vlerah joined Parkview Health in 2009. Today, she develops and implements the health system’s strategic direction and is responsible for creating, implementing, transforming and leading its global supply chain process. She oversees supply chain transition, acquisition activities and support services.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Donna J. Van Vlerah:We developed a three-year strategic plan to overhaul the existing resource materials management department into an end-to-end supply chain. We discovered that the current model of distribution would not be able to meet the supply chain needs of our customers and fully support the end-state vision for the health system. So, a decision was made to open a centralized distribution center to fully support a centralized purchasing and contracting platform. This required a complete renovation of our supply chain model to include people, processes and technology. Our end-state goal was to operate a collaborative, effective, responsive and cost efficient end-to-end supply chain in a fully automated and virtual inventory management environment. A summary of key tasks in a 13-month timeframe included: the development of a comprehensive construction plan for the distribution center; the selection of a warehouse management software solution with a demand forecasting module, virtual inventory capability and a robust point of use system with patient charging capabilities; reorganization of a traditional resource materials management department to our proposed supply chain operational resources eNovation department; development and implementation of significant change to business practices; and development of an organizational acceptance and change management plan.
JHC: Please describe a project you look forward to implementing in the next year or two.
Van Vlerah:Currently, we are working on a detailed evaluation of disaster planning for the Six Sigma process (DMAIC). [We are looking to] define the problem and link supply stocking and practices against identified hazardous vulnerability assessments for our hospital system. This will ensure correlation of the high threats and detailed reaction plans.
JHC: What is the most important quality you look for in a supplier partner?
Van Vlerah:The most important quality is flexibility, coupled with honesty in the strategic partnership.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Van Vlerah:Clinical integration is foundational to the challenging healthcare environment. As such, we will see closer relationships between the supply chain professionals, our internal healthcare customers (i.e., physicians, corporate finance, COOs and hospital/physician office practitioners) and strategic suppliers. Commercial / governmental best practices, Lean 6-Sigma and innovative philosophies must be employed to design the future healthcare supply chain.