Western Connecticut Health Network finds solution to integrating physician practices
Supply chain executives in growing IDNs face a common dilemma: How to balance the traditionally high customer-service needs of their newly integrated physician practices with the IDN’s need to improve efficiencies and reduce costs.
Like IDNs elsewhere, supply chain and medical group leaders at Western Connecticut Health Network faced this dilemma as they pondered how to integrate the physician practices of Western Connecticut Medical Group, recalls Ruth Gregory, corporate director of materials distribution for Western Connecticut Health Network. She and Medical Group COO (and Interim Executive Director) Shawyn Corbett began holding discussions about supply chain a couple of years ago, says Gregory. Then in early 2014, Western Connecticut merged with Norwalk Health Services Corp., operator of Norwalk Hospital, a physician group and other entities.
“It’s a very dynamic, evolving organization,” she says, describing the Medical Group.
Western Connecticut encompasses three acute-care hospitals, the Medical Group (with more than 50 sites), a corporate health operation and Western Connecticut Home Care.
Need for efficiency
“Shawyn appreciated the need to drive a more well-orchestrated and efficient supply chain process for the Medical Group,” says Gregory. Doing so wouldn’t necessarily be easy, though. Physician practices tend to work more independently than, say, surgeons in the OR, she notes. The challenge was “getting everybody to understand why we wanted to do this, and then to create an environment where it was efficient for the groups to do their jobs in concert with the needs of the organization.”
The physician groups were themselves facing significant economic pressure, so it was to their advantage to participate in supply chain efficiencies, she adds. “We had a significant number of conversations and meetings with the physician practice management.”
The supply chain team had a couple of options. The first was to tie the physician offices – from a supply chain point of view – more closely to the acute-care hospitals, that is, servicing them out of the hospitals’ Distribution Warehouse. “We did entertain that thought,” says Gregory. “But we weren’t able to ensure the level of customer service that these practices needed.”
Finding a prime vendor
Ultimately, supply chain and Medical Group leaders decided to seek a prime vendor for the physician practices. Working with Corbett and several practice managers, the team put together an RFP and bid it out to several vendors. One difficulty they faced: A lack of solid product and equipment usage data on the part of the physician practices. “It took considerable research to determine exactly what we were talking about in terms of the scope of the business,” says Gregory.
“We had various objectives with our RFP,” she continues. The first was organizational, that is, the need to develop a comprehensive supply management program for the Medical Group. The second was cost, and the third, service.
“Because the Medical Group practices functioned very independently, service became a very important issue as we decided to move ahead. We needed a vendor who could work with the Medical Group and walk the practice manager and physicians through the process. We had physician practices that had been working with the same sales rep for 20 years. That was a difficult habit to break. So it was very important that any new vendor rise to the occasion.
“We did extensive interviews to determine which approach would be best for us,” she continues. All the vendors were fairly strong in terms of the organizational and cost requirements, but Schein brought a well-developed implementation process and programs. “That helped tip the tide for us.” Another plus: Schein could carry a good portion of the pharmaceuticals and vaccines consumed by the physician practices, as well as med/surg supplies and equipment. Schein got the contract, and implementation was completed in the second quarter of 2014.
“A great deal of the support and energy in carrying out the program came from the leadership of the Medical Group,” says Gregory. “And that is really what drives the success of these kinds of programs – leadership buy-in.”
Today, the physician supply chain differs in many ways from what preceded it. For example, all practices use Henry Schein’s centralized ordering system. “Before that, we saw very disparate systems – a lot of paperwork flying back and forth, vendors coming in and taking orders,” says Gregory. “Now it’s all consolidated. The net effect is a smooth ordering process, automated invoicing, improved workflow.” In addition, the Western Connecticut supply chain team – with assistance from Henry Schein Field Sales Consultant Mike McGoldrick – have made significant improvements in standardizing med/surg supplies and pharmaceuticals.
At quarterly meetings, the Western Connecticut and Henry Schein teams review the prior quarter’s performance and look ahead at areas for improvement. “The folks at Schein are often ahead of us to tell us where we need to put our emphasis,” says Gregory.
The Medical Group practices have embraced the Henry Schein reps calling on the practices. “From a service perspective, the reps not only take care of the practices’ day-to-day needs, but [their presence] supports the relationship we have developed,” say Gregory. “The reps are trained in the goals and objectives of this program; they’re all onboard.”
Gregory predicts continued growth for Western Connecticut Health Network. “Our medical practices will evolve so they become true partners with our acute care operations, to allow us to maintain our business model and develop a strong network for what is to come in healthcare, given accountable care and our responsibility to take care of patients after they go home,” says Gregory.
“There will be huge economic challenges for all entities. If we don’t work together to support the financial viability and efficiencies of the organization, we won’t be as successful as we need to be.
“Vendors like Henry Schein, which have the experience working with organizations to that end, are very beneficial in this kind of environment. Contracting with Henry Schein has been a good step for us as an organization, as we keep driving that strategy further and further.”