The art and science of servicing non-acute-care sites
Achieving supply chain success in the non-acute-care market is easily summed up: “It really boils down to having the right people, the right relationships, and driving the same end game for everyone involved,” says Debbie Long, CPM, CPIM, vice president, procurement, W Squared, a business process outsourcing firm in Brentwood, Tenn. “If we can do that and drive savings to the bottom line, then we will continue to grow.”
As more IDNs acquire physician practices, it’s no surprise that Long is getting phone calls from acute-care-based supply chain executives asking about the art and science of servicing non-acute-care sites.
W Squared provides business process outsourcing solutions – including finance and accounting, technology, human resources and payroll, and procurement – to clients around the country. One of its largest clients is Premise Health, which operates approximately 500 worksite health and wellness centers for self-insured employers across the country (The company was formed in June 2014 through the merger of CHS Health Services and Take Care Employer Solutions LLC.)
Long bears primary responsibility for contracting on behalf of the Premise Health locations. “It’s a strategic process,” she says. In fact, W Squared has 82 percent of the workplace facilities’ spend under some form of contract, either through direct negotiations or through Alpharetta, Ga.-based MedAssets, with whom W Squared is affiliated. The procurement staff of six oversees tactical and strategic procurement for the Premise Health facilities, though much of that process is automated and handled at the facility level.
‘An extension of their organization’
It’s no surprise that “strategic” is an integral part of Long’s vocabulary. “I came from the automotive industry,” she says. “Strategic supplier relationships are in place and have been leveraged for years in that industry.” Transferring that concept to healthcare has been key to her procurement strategy at W Squared.
Long regards herself and the procurement team at W Squared as a strategic partner of each of Premise Health’s facilities. “We are an extension of their organization, and can make procurement decisions on their behalf,” she says. Because of that capability, Long can roll up millions of dollars of spending leverage for the benefit of Premise Health and contracted vendors. In fact, she describes the W Squared procurement team as its clients’ “aggregated procurement partner.”
Making changes to the supply chain – including aggregating volume – calls for buy-in from finance executives and physicians, says Long. The former need little convincing, as the ROI for participation in W Squared’s procurement program is easily demonstrated, she says. But physicians may need some nudging. “As long as I can talk to them as it relates to [medical products and equipment] of the same quality or better quality than what they’re used to, we will get buy-in,” she says. Suppliers can help her support the case, she adds.
Long has pursued a strategic relationship with her primary distributor, Henry Schein, taking volume with the company from less than $1 million to $14 million in two years. Working on that basis allows her to work with Henry Schein to create the best possible value proposition for her clients. “That only happens when you have strong, strategic relationships with suppliers. And it is a paradigm shift.”
Long believes that strategic partnerships will continue to be a differentiator for years to come. Since June 2014, as part of the platform development for Premise Health, Long has worked to integrate the procurement programs of CHS Health Services and Take Care Employer Solutions, and build strategic relationships with the suppliers of both legacy companies. That work will continue as part of a continuous improvement process, she says.
“We currently have strategic relationships with key categories of spend – med/surg, office supplies, construction/facilities/architecture, small parcel, medical waste management, travel and IT,” she explains. “We align our entire book of business spend with a best-in-class organization that offers technology and continuous improvement deliverables that allow our business to grow with scale and, more importantly, drive efficiencies across the various clients that we work with. We look for flexible, nimble and diverse suppliers that echo our strategy and culture around accountability to all of the above.”
In the near term, Long anticipates working directly with medical equipment manufacturers and Henry Schein “so we can do things better and faster, and drive efficiencies in the market.
“We will get more specifically involved with OEM suppliers at the table with Henry Schein as we develop larger pieces of business within a specific OEM segment,” she explains. “We would sit down and leverage our strategic relationship with Henry Schein to bring parties together with us at the table, as well to talk through the end result we are looking to achieve. Henry Schein is the bridge, because they ultimately have a deeper relationship with the manufacturer, and we are the end user.” It will be a paradigm shift for the distributor, she says.
What’s more, she intends to build on W Squared’s already strong capabilities around dashboarding and reporting. “We create dashboards in categories of supplier relationships and spend, and review them quarterly with our clients,” she says. Doing so allows W Squared to build credibility, confidence and knowledge among them. “We have a robust capability to pull together finance and procurement, and then report back to our client base about how their money is being managed. From a dashboarding perspective, we have gained traction.”
Longer term, W Squared will be engaged in helping Premise Health incorporate telemedicine and other innovative technologies into its facilities’ protocols. “Premise Health is building a robust technology platform for the delivery of care to be more current to the population we provide care for,” says Long. The team working on that at Premise Health is the ‘Products and Innovation’ team, led by a cross-functional team including clinical, operations and technology leaders. “I have been working with our CIO and our technology innovation partner to connect with Henry Schein on this,” she adds.
As IDNs acquire physician practices and other non-acute-care sites, supply chain executives brought up in the hospital environment face a steep learning curve, says Long. They will be called on to exhibit flexibility and an entrepreneurial spirit to thrive in a new healthcare world. And, no doubt, they will be challenged to form strategic relationships similar to those that are allowing W Squared and Premise Health to thrive.
Debbie Long joined W Squared in 2012 with 20 years of experience in procurement services. She began her career with General Motors, then worked for Newell/Rubbermaid, Murray Inc., Asurion and Grove International. She taught a purchasing certification program at the college level; and received her Certified Purchasing Manager (CPM) and Certified in Production and Inventory Management (CPIM) credentials from the Institute of Supply Chain Management.