Ten People to Watch 2010

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 on suggestions received from readers and industry sources. As you can see, we had so many great suggestions that we added a spot to our list.

Peggy Camp
clinical resource director
Continental Division, Hospital Corporation of America (HCA) supply chain
11 acute care facilities in Colorado, Oklahoma and Kansas, two distribution centers under the Continental Division, 2010 total savings goal of $17 million

Peggy Camp began working with the Continental Division of HCA in 2000. She has oversight of 11 acute care facilities in Colorado, Oklahoma and Kansas, as well as customer service and accounts payable functions in the division. She is responsible for working with the division supply chain team to implement the strategic direction of supply cost management across the facilities. She reviews and optimizes the current GPO contract portfolio, develops clinical and utilization protocols, and develops and executes the product standardization plan for the entire division. She also is responsible for building strategic alliances with hospital executive staff, particularly the chief operating officer, the chief nursing officer and clinical department directors, as they relate to successfully executing the organization’s supply chain operations plan.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Peggy Camp: The Continental Division has been very successful in implementing a reprocessing program over the past three years. We saved in excess of $2 million in 2009. The success of this program has been the result of support by senior management and a partnership with our supplier. In order to keep the program active and alive, we organize an annual breakfast/lunch celebration to recognize and re-energize the staff. We provide monthly reports to track our successes and work closely with the supplier to provide ongoing education and support at the facility level. We have also been able to “marry” this initiative to the efforts in our facilities to support our green initiatives. In 2009, we saved 50,000-plus pounds of waste from going to landfills.

JHC: Describe a project you are excited to implement in the near future.

Camp: Currently, we are in the process of implementing a strategic initiative to control and manage our bone supply expenses. We have carefully examined our potential savings opportunities. In addition, we have established a partnership with three key vendor partners, and together we have launched a divisionwide education program for staff and physicians. We have been able to engage the support of senior management who have been key in our efforts to engage staff.

JHC: What is the most important quality you look for in a supply partner?

Camp: The most important quality we look for in a supplier is respect. By “respect,” I refer to suppliers honoring my requests to follow company policies with regard to the introduction of new products and staying in compliance with existing agreements. Our suppliers also must show us respect for the challenges we face every day as we identify and implement savings initiatives, and our commitment to do so. The supplier that best meets this is Medline Industries.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Camp: I believe the biggest change in healthcare contracting in the next five years will be the ability of providers and suppliers to partner in ways to make it possible to access and implement new technology while maintaining financial stability.

Nicholas P. Dominick, Jr.
vice president for imaging services, cardiac services and supply chain operations
Lifespan, Providence, R.I. Five hospitals serving Rhode Island and New England
1,155 licensed beds, $300,000 purchasing volume, $1,376,405 net patient revenue

Nicholas P. Dominick, Jr. has over 20 years of experience in healthcare supply chain management in purchasing and materials management. He joined Rhode Island Hospital and Lifespan in 2000 as director of materials management. In 2004, he was appointed administrative director for cardiovascular services. Today, Dominick is responsible for supply chain management, including purchasing, receiving and distribution, and imaging services, for Lifespan, and cardiac services for Rhode Island Hospital.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Nicholas P. Dominick, Jr.: Over the past 24 months we have launched exciting initiatives in two primary areas: physician preference items and equipment, and leveraging technology to enhance our information system. With regard to physician preference items, we have implemented successful initiatives for spinal fusion products, cardiac rhythm management devices, stents and endomechanical surgical devices, all of which have yielded multi-million dollar savings for our institution. Our affiliates have participated in all of these initiatives to arrive at a unified decision. The process we employed to engage our physician stakeholders as willing participants and supporters has been key to our success. In addition, we have focused on enhancing our procurement and analytical capabilities, which was necessary in order to support the physician preference initiatives. We have implemented systems to enhance and cleanse data, which provides us with the ability to access accurate data within our system to identify and drive opportunities.

JHC: Describe a project you are excited to implement in the near future.

Dominick: We continue to develop opportunities for physician preference items, with a focus on equipment. We have two equipment projects underway, which present multi-vendor opportunities. Both projects cross two different services. With regard to surgery, we are working with orthopedics and general equipment, while the second project focuses on the cardiac catheterization lab and special procedures. We are beginning to look for opportunities centered on product utilization and best practices. Working closely with our physicians will help us realize savings. We also are evaluating options for a strategic sourcing system. Our goal is to leverage our investments to improve data quality and automate the request for the proposal and analysis process.

JHC: What is the most important quality you look for in a supply partner?

Dominick: The most important quality in our vendors is that they actively listen and try to understand the needs and challenges of our healthcare system. A local provider that understands our needs and provides solutions locally is Claflin. Kimberly Clark also exemplifies this quality, as its local sales reps connect with us and advocate for our healthcare system.

JHC: What is the biggest challenge we can expect to see in healthcare contracting in the next five years?

Dominick: We will have to change the way we approach the contracting process by shortening the length and time cycle of contracts and working with our supplier partners to be more transparent. I would like to see a movement to create a standard of clinical equivalence. In order for this to work, it would require credibility and clout within the physician community.

Jack Ferraro
university director for materials and resource management
University of Connecticut Health Center, John Dempsey Hospital Farmington, Conn.
224 beds, approximately $938 million in gross state product generated annually, annual spend of $40,701,696

Jack Ferraro joined the University of Connecticut Health Center in 1982 as the capital assets-inventory coordinator. Through the years, he has filled various supply chain roles. Today, he is responsible for warehouse operations, materials procurement and the health system’s supply chain. He oversees contract negotiations, development of departmental policies, the interpretation of national GPO contracts, the collaboration with multidisciplinary groups and more.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Jack Ferraro: We have implemented a new model for a value analysis program for the University of Connecticut Health Center. The materials value analysis program has been highly successful and has recognized over $4.5 million in documented savings. We have expanded the program, which originally served only the clinical group, to include the entire health center. The materials management team also has developed a new value analysis dashboard tracking and reporting tool. The dashboard serves management, finance and the value analysis team. We have implemented an office supply standardization program that has recognized approximately $250,000 of savings in its first year, and we just completed two recent negotiations, which will yield over a million dollars in savings. Finally, we have extended a materials management state-of-the art inventory system, which targets supply spending and supply inventory, to the health system’s 21 correctional facilities. Finally, we have converted the existing PAR program for the hospital and clinics to the new program. The system displays a management dashboard that can be monitored by materials management, finance, and the appropriate department staff.

JHC: Describe a project you are excited to implement in the near future.

Ferraro: We have a few exciting projects planned. For one, we anticipate marketing our e-portal materials management system in January 2011. We also will continue to enhance our materials management value analysis program over the next year or two, which will include the addition of a new subcommittee involving our surgeons, nurses, administration and finance department. We are very excited about this program, which will enhance our current value analysis and resource management processes. Our goal will be to design a committee that will challenge current practices, promote innovative solutions and advance John Dempsey Hospital’s perioperative divisions to the next generation of supply chain optimization and savings. Working together, the committee will tap into their collective power and experience.

JHC: What is the most important quality you look for in a supply partner?

Ferraro: An excellent communications/technology network is essential for today’s supplier partner. This includes easy access to pricing and analytics, technology advancements, meaningful/user friendly dashboards, data sharing and flexibility. Strategic Value Analysis in Healthcare has been an outstanding partner, as has Owens & Minor.

JHC: What is the biggest challenge we can expect to see in healthcare contracting in the next five years?

Ferraro: I believe the economy and major changes in the healthcare infrastructure will drive contracting for the next five years. Due to regulatory, compliance changes and legal interpretations, the next generation of contract specialists will need to have a strong background in law, for starters.

Thomas M. Lubotsky
vice president, supply chain and clinical resource management
Advocate Health Care Oak Brook, Ill.
Over 3,000 beds, nine acute care hospitals and two children’s hospitals, $4.4 billion net patient revenue, $575 million annual spend

Thomas Lubotsky joined Advocate Health Care in 2009, when he assumed responsibility for the overall leadership of the health system’s supply chain operations. He helps set the strategic vision, core strategies, organizational framework and operating plan for supply chain, including managing key relationships among suppliers, distributors, clinicians and GPOs and associates. He also oversees the development of supply chain intelligence capability to drive evidence-based use of supplies, equipment and technology.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Thomas Lubotsky: We have been developing a three-year CT scan road map and technology plan. Advocate recognized CT as a critical asset to manage and plan its growth, since it usually requires large capital expenditures and proper market positioning for returns on capital to materialize. In addition, there are external factors driving radiation dose reduction in the marketplace today, which call into question how Advocate is going to reach these milestones for patient safety. Recently, Advocate has partnered with GE Medical to assess its total fleet of CT technology across the system. Presidents of Advocate hospitals, along with other key members of the executive management team, have agreed to further modify the technology mapping process. They also are focused on building a culture of radiation dose reduction.

JHC: Describe a project you are excited to implement in the near future.

Lubotsky: Advocate’s supply chain will assess and redesign its current value analysis workflow and structure, which currently utilizes various “councils” engaged in contract review and decisions. We plan to embrace the evidence-based use of products, equipment and technology as part of this redesign, as well as deploy better supply chain intelligence in the clinical sensitive and physician preference product areas, bridging both internal and external knowledge of variation and use. Working with physician subject matter experts on an ad hoc basis will likely be a critical feature to this redesign, as well as utilizing Advocate’s clinical integration model for adopting agreed upon standards of practice.

JHC: What is the most important quality you look for in a supply partner?

Lubotsky: Accountable supply chain value is the most important dimension among our suppliers today. Those that can define and deliver clearly their performance metrics surrounding quality, service, and appropriate use will be able to sustain a longer term relationship with Advocate.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Lubotsky: We will see the transformation of a healthcare supply chain culture to embrace evidence-based use of supplies, equipment and technology as a critical element for the future. It will not be enough to simply negotiate good pricing for supplier’s products, equipment and technology. Suppliers will have to demonstrate how well and appropriately their products are being utilized to address overall value. Healthcare systems will have to develop stronger supply chain intelligence that combines their knowledge of product use within their own institutions with an external knowledge of best practices, peer review research, and economics to create this evidence-based culture.

Paul Norris
executive director of pharmacy services, materials management, nutritional support team, GI lab
Loma Linda University Medical Center Loma Linda, Calif.
Five hospitals, five retail stores, one homecare pharmacy, two infusion centers, four hospital pharmacies, 900 beds, approximately $300 million purchasing volume, $1 billion in annual spend.

Paul Norris joined Loma Linda University Medical Center 30 years ago, after graduating from Pacific Pharmacy School with a Pharm. D. He became the executive director of pharmacy services 20 years ago, and 10 years ago, expanded that role to include responsibilities as executive director of materials management as well. Norris’ pharmacy responsibilities entail oversight of all pharmacy operations for the entire health system, including the GI lab and nutritional support team. As executive director of materials management, he is charged with ensuring the organization uses products that are clinically accepted by its clinicians and obtainable at the best possible price. In addition, Norris is associate dean of clinical affairs and a professor of pharmaceutical outcome science at the Loma Linda University School of Pharmacy.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Paul Norris: Together with my team, I am in the process of revamping our materials management department into a total supply chain management organization. This will include decentralizing some of our processes to get closer to our customers and patients, as well as staffing the right people in the right positions with the tools they will need to do their jobs. We have been working with Intermountain Healthcare (Salt Lake City, Utah) in order to learn from individuals who do something well, not just those who are charting new territory. I like to look at others’ best practices and learn from that, and Intermountain Healthcare does its job well.

JHC: Describe a project you are excited to implement in the near future.

Norris: I am excited about developing partnerships with local, regional and national organizations to develop a strong association and drive cost out of our system in conjunction with our buying group, Amerinet. I am also excited about developing partnerships with companies that can help us streamline our processes, using software applications that will give us the tools to do our job extremely well. For instance, we are scheduled to meet with one company that I believe can help us with the tools to obtain data in a timely manner.

JHC: What is the most important quality you look for in a supply partner?

Norris: I look for integrity in my suppliers. I want to work with a supplier that is looking out for the medical center’s best interest, as well as their own. I can think of several organizations that fall into this category, including McKesson, Amerinet, Professional Hospital Supply and B. Braun.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Norris: I think we are going to become much more automated, with direct links to suppliers and manufacturers. The system will be real-time and electronic, and we will be able to make daily decisions instantly, based on what is best for our organization.

Wendell Osborne
director supply chain
Alamance Regional Medical Center Burlington, N.C.
238-bed acute care facility, 81-bed skilled nursing center, off-site urgent care, four off-site rehabilitation centers, off-site surgery center, off-site cancer center and various physician offices in North Carolina. Annual supply purchasing volume of $41 million.

Wendell Osborne joined Alamance Regional Medical Center as director of supply chain in 1990 after serving as a purchasing agent for Alamance County Hospital and Alamance Memorial Hospital. As director of supply chain, he currently is responsible for sourcing, supply, equipment and lab distribution, linen distribution, mail and copy center and external courier for the entire healthcare system.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Wendell Osborne: One of our biggest challenges has been achieving the best pricing given our volume. For several years, we have been a member of the Western North Carolina Health Network, a regional group that has aggregated its purchasing volume to achieve best pricing and share best practices. Even though this has been very successful, we are still challenged to reduce our healthcare system’s supply, equipment and service costs. In addition, for the last two years we have been participating in Premier’s Ascend program. Ascend is a committed contract program that each hospital has agreed to use. Our challenge has been converting 83 percent of the first 103 contracts from one Premier vendor to another. The volume has caused us to look at our process and communications efforts to successfully change vendors. This would not have been possible without a supply chain staff that is committed, open minded and willing to make changes on the fly. The success of the Ascend program has reduced our supply costs on these contracts by an average of 14 percent.

JHC: Describe a project you are excited to implement in the near future.

Osborne: We will continue to work with the Western North Carolina Health Network and Premier to lower supply costs. Our challenges will be to better understand the cost drivers of the hospital system. Our supply chain team will not only try to provide logistics and sourcing more efficiently, we will be involved more and more in the clinical side of healthcare. We will look at pharmacy, lab and radiology costs, and more. A more consistent utilization of resources is needed to give healthcare a more sustainable cost reduction. Combined with patient outcomes, we can help improve the health status of our communities.

JHC: What is the most important quality you look for in a supply partner?

Osborne: Providing a quality product or service is a must. High-ranked vendors must ship products when they are ordered and invoice correctly. When issues or opportunities arise, sales reps and their supporting staff must be prepared to address them. Two of our current vendors that exemplify these qualities are PDI and Medline.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Osborne: With economic conditions and healthcare reform, hospitals are going to be more focused than ever on their contracts. GPOs, regional networks and committed programs will influence hospitals’ decisions about which contracts to use. It will take all of the above parties, working together, to find sustainable cost reduction.

Joe Sheil
director of contracting
Beth Israel Deaconess Medical Center (BIDC) Boston, Mass.
621 licensed beds, annual spend of approximately $300 million, two medical campuses.

Joe Sheil joined Beth Israel Deaconess Medical Center in 2002. Today, Sheil manages a staff of seven. He and his team negotiate and manage supplier and other third-party relationships intrinsic to the medical center’s purchasing contracts. They oversee about 650 contracts, with approximately $200 million in annual purchases. In addition, Sheil’s team is involved in managing the value analysis process and providing leadership to the Medical Center’s supply chain expense-improvement efforts.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Joe Sheil: We put our GPO relationship out to bid. This was a difficult decision and a complicated challenge. Our GPO bid included an extensive programmatic questionnaire, four specific market basket analyses (commodities, pharmaceuticals, top overall spend and endomechanicals) and outside independent consulting assistance for the formal analysis. We worked under the guidance of a steering committee that included our COO, CFO, CNO, acting chairman of surgery, nursing, administrative and materials leadership. I was the overall project leader. We assessed overall price points, depth of each GPO’s consulting organizations, many formal and informal interviews, reference checks, unique program features (in this case, the development of a regional purchasing collaborative) and other value propositions. The biggest challenges we faced were reaching realistic financial targets and selecting an organization that could help us make the transformational changes we believe we will need over the next several years. We arrived at very reasonable and conservative improvement targets, and price was not the sole determinant. Through online interviews, we assessed the organization for its credibility, the dedication of senior leadership to our project and the organization’s cultural fit.

JHC: Describe a project you are excited to implement in the near future.

Sheil: Our plans for implementation will follow three core tracks. First, we will convert our contract portfolios to the new GPO. Second, we are conducting a supply chain assessment using the new GPO’s consulting organization, in which we look at how we are organized and how we can identify opportunities to reach best practice positions. This assessment will include all areas of supply chain, our MMIS (PeopleSoft) and other applications. Finally, we will conduct a thorough refresh of our value analysis committees and processes to achieve best practices for those groups. We’ve targeted the next 18-month period to achieve an annual $6 million savings goal on a supply spend of roughly $150 million.

JHC: What is the most important quality you look for in a supply partner?

Sheil: We look for honesty, transparency, responsiveness and flexibility. We also look for supply partners that offer aggressive pricing, strong fill rates and minimal back orders. Cardinal Health has been a great business partner, particularly in the face of our imminent GPO transition.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Sheil: There will be significant growth in regional GPO contracting. We will see this nationally, as well as locally. We also will see that large academic medical centers such as ours can work cooperatively to drive good business and market share.

Martha G. Smith
statewide director of nursing and standardization
Louisiana State University Health Sciences Center New Orleans, La.
Nine statewide facilities, 1,064 licensed beds

Martha Smith joined the Health Sciences Center- Louisiana State University Health Care Services Division (LSUHCSD) in 2002. Since then, she has been responsible for writing and implementing procedures and policies for the healthcare system. Today, her responsibilities have broadened with the addition of her role as associate hospital administrator for patient care services at the Interim LSU Hospital in New Orleans (formerly Charity Hospital).

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Martha Smith: Working to standardize to one product in such categories as automatic implantable cardioverter defibrillators, pacemakers, implants, maxillofacial products, trauma products, radiology and cardiology for all nine LSU facilities has been challenging. Last year, I led a particularly rewarding standardization project. All of our physicians attended the meeting prior to Amerinet sending out the bids. Bids were sent only to those vendors agreed upon by the physicians. After receiving the bids, the physicians were not always happy, but they agreed on the lowest-priced vendors and understood that the savings from these categories were going to help fund other medical supplies. The process worked because it was truly a team effort. Everyone involved realized the importance of obtaining clinically acceptable products while saving money at the same time. That feeling of accomplishment was wonderful.

JHC: Describe a project you are excited to implement in the near future.

Smith: To date, we have successfully standardized all high volume/high dollar supplies. Over the next 12 months, we will look at all items on the shelves in our central supply areas to determine where we can find the next round of savings. It has been exciting working with our vendors and forming working partnerships that go far beyond the usual vendor-facility relationship. Working together to provide our patients with necessary supplies and equipment, providing clinically acceptable products, and giving quality care in a safe setting is the reason I go to work every day.

JHC: What is the most important quality you look for in a supply partner?

Smith: Many of our vendors rose to the challenge in the aftermath of hurricanes Katrina and Gustave. A number of them have developed or expanded their indigent programs to assist in getting our indigent patients the supplies and equipment they need while in the facilities or after they go home. It is important that the suppliers and facilities work together as a team. Several of our longtime vendors whom I feel work well on our team are Spacelabs, KCI, Covidien and Molnlycke. These vendors have always been ethical and honest, and they have worked with us on pricing when we have had limited budgets.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Smith: The future of healthcare is very scary, and no one can predict the direction it will take in the next couple of months. I think that being a part of a GPO will be a must. Leveraging volume from the GPO facilities will be necessary to drive prices down.

Michele Tarantino
vice president, corporate contracting
Carilion ClinicRoanoke, Va.
Eight acute care hospitals, one surgery center and 90 physician offices. Non-labor spend of $240 million.

Michele Tarantino joined Carilion Clinic as corporate purchasing and OR materials director in 1997. After leaving for a brief consulting stint with Aspen Healthcare Metrics, she returned to Carilion. Since then, she has overseen the corporate contracting department and has been responsible for significantly reducing non-labor expenses for the healthcare system for fiscal years 2009, 2010 and 2011. In her words, her objectives for spend management involve “connecting the dots” between supply chain, finance and reimbursement. To better align the entire supply chain with Carilion Clinic’s new academic and research model, she is working with physicians to improve margin and provide data that validates supply chain reduction goals.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Michele Tarantino: For the past 16 months I have worked with the Carilion team, Premier Purchasing Partners and Deloitte Touche to identify $15 million in supply chain opportunities and implement $6.9 million in recurring and one-time cost reductions. I also have formed a new department in the past four months to centralize the sourcing, value analysis and contracting functions. Last November, I signed a contract to participate in the Premier Ascend committed purchasing program, and I have implemented many product conversions to significantly reduce spend in many product categories.

JHC: Describe a project you are excited to implement in the near future.

Tarantino: Carilion senior leadership has identified a $10 million opportunity to further centralize non-clinical and purchased services sourcing and contracting. It is this significant piece of system spend that many hospitals do not emphasize due to lack of purchase order data. Many of these expenses are hidden in non-contracted invoice detail and provide a large opportunity for cost control.

JHC: What is the most important quality you look for in a supply partner?

Tarantino: Supply partners that follow new product entry rules, avoid end runs to physicians and are willing to recognize supply chain professionals as their most significant customers and allies will succeed at winning bids. Those that continue to divide and conquer physicians and hospital supply chain management will lose in the end. We have over 500 employed physicians and the old school style behavior will not hold up in the new age of healthcare reform.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Tarantino: I believe we will see significant reductions in supply contract price points as hospital margins continue to erode due to declining reimbursement and stricter regulations. What will drive these price decreases? Significant shifts in vendor market share, as companies such as Applied Medical, Ascent, Hemcon, Compression Therapy Concepts and Smiths Medical, to name some, roll out pared-down business models and products. These types of companies provide great products without building in the cost of “value added” activities to their price points.

Calvin T. Wright
vice president, supply chain management
Catholic Healthcare Partners Cincinnati, Ohio
34 hospitals and 14 long-term-care facilities throughout Ohio, Pennsylvania, Tennessee and Kentucky. 6,529 licensed beds, $710 million in annual supply spend, $433 million in annual purchase services spend.

Calvin T. Wright joined Catholic Healthcare Partners (CHP) in 2004 as corporate director, supply chain management. In 2008, he became vice president, supply chain management. Today, Wright oversees strategic sourcing for medical products, including pharmaceuticals, purchased services, capital and construction projects. He is also responsible for supply chain strategic planning, consolidated supply data management and supply cost management for all of the healthcare system’s hospitals and long-term-care facilities.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Calvin Wright: The most rewarding project I have been involved with recently has been a national purchasing collaborative with four other large Catholic IDNs. Five years ago, we formed a strategic alliance, Catholic Contracting Group (CCG), to aggregate and leverage purchasing volume. To date, the CCG collaborative has negotiated and implemented nearly 80 supply and equipment contracts, which have saved the IDN members approximately $40 million over five years. This collaborative, along with other initiatives specific to CHP, has enabled our organization to contain supply cost to less than inflation over the past five years. These results were achieved without sacrificing quality of care, which is evidenced by CHP earning the Thomson Reuters Top 10 Health Systems recognition for clinical quality and efficiency for the second consecutive year in 2010.

JHC: Describe a project you are excited to implement in the near future.

Wright: I am both passionate and excited about leading a companywide supplier diversity initiative that began at the same time as my tenure as vice president of supply chain. Over the last three years, CHP has achieved modest, but steady results. At the beginning of 2010, our CEO, Michael Connelly, challenged the organization to accelerate these efforts to achieve a 10 percent savings by 2012. Connelly also raised the bar for diverse workforce and vendor participation on CHP’s construction projects by setting targets of 25 percent and 30 percent respectively. This initiative will have a significant economic impact in those communities where we provide health services.

JHC: What is the most important quality you look for in a supply partner?

Wright: Our suppliers must demonstrate integrity, honesty and transparency just to get in the door. Once in, I look for suppliers that can differentiate themselves from the pack by offering something more than just a product or service. I look for supplier partners that can engage other areas of the CHP organization, such as quality, service line management, coding and more, as well as offer solutions to organizational challenges.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Wright: Accountable care organizations will redefine how healthcare is delivered. The different factions of the healthcare delivery system will no longer be able to operate in a vacuum. Their success will be determined by how well they all work together in treating patient populations. Providers with good cost and outcomes data will be able to partner with payers and suppliers to overcome the challenges of healthcare reform.

Richard Yonker
vice president supply chain
Tenet Healthcare Corp.Dallas, Texas
49 acute care hospitals in 11 states, 59 freestanding outpatient service centers, 13,430 licensed beds, $9.01 billion in net operating revenues.

Richard Yonker joined Tenet Healthcare Corp. in 1996 as director of material operations and purchased services. He later left to work in Broadlane’s clinical care area, which included managing the GPO’s relationship with Tenet Healthcare. He returned to Tenet Healthcare and assumed his current position in 2004. Currently, Yonker is responsible for supply chain management for his healthcare system. His responsibilities include managing a vast array of purchased services and supplies for the company’s 49 hospitals and 59 outpatient centers.

The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?

Richard Yonker: One of the most rewarding projects I have been involved in has been the re-negotiation of our cardiac implant agreements. We took a regional contracting approach and successfully implemented new agreements and delivered sufficient savings for our hospitals. We created steering committees for each of the Tenet regions. The steering committees were comprised of hospital administrators for the three largest hospitals, by cardiac volume, for each region. Vendors were invited to present their data to the committees, and the pursuant discussion led to double savings from most vendors.

JHC: Describe a project you are excited to implement in the near future.

Yonker: In the near future, we will take a similar approach to that with CRM devices and apply it to contracting process for orthopedics implants. A region-by-region negotiation for physician preference items yields the best results.

JHC: What is the most important quality you look for in a supply partner?

Yonker: One quality we look for in our supply partners is integrity.

JHC: What is the biggest change we can expect to see in healthcare contracting in the next five years?

Yonker: With the passage of healthcare reform, the industry as a whole will become increasingly transparent. This is a good thing, which I hope to see carry over to the relationships between implant vendors and physicians.

Speak Your Mind

*