Careful, strategic planning enables one consolidated service center to address the broad spectrum of supply chain.
Since its inception in 2009, Mid-America Service Solutions has grown to include over 70 hospitals, a sign that it is taking a healthy approach toward centralized distribution, information technology and supply chain contracting. In its quest “to address the entire spectrum of supply chain from an efficiency and cost standpoint,” the CSC has remained committed to growing its membership, as well as adding the necessary resources to support its efforts, according to Jeff Andersen, president and CEO, Mid-America Service Solutions.
The Journal of Healthcare Contracting spoke with Andersen about the center’s goals and expectations.
The Journal of Healthcare Contracting: How is Mid-America Service Solutions laying its groundwork? What steps are its leaders taking to ensure the organization will flourish in years to come?
Jeff Andersen: We’ve remained open to growth and to adding new members. Additionally, we’ve been willing to add necessary resources to support the efforts of Mid-America Service Solutions. For example, we recently added contracting resources dedicated to physician preference, pharmacy and purchased services. VHA provides the dedicated contracting resources. Additionally, we pay attention to what is occurring nationally, across VHA’s supply networks, as well as tracking market developments.
JHC: Have you learned any lessons from other consolidated service centers in terms of what has and has not worked in launching – and growing – an organization?
Andersen: Mid-America Service Solution engaged outside consultants during its developmental stage. Importantly, Mid-America Service Solutions was created by combining three existing sourcing collaboratives: the Greater Ozark network; the Central Western Kansas network; and the CLS network. So, we didn’t have to start the consolidated service center from scratch. Our members already understood the value of working together on supply chain initiatives. With Mid-America Service Solutions, we stepped up our efforts by adding centralized distribution and the common information technology platform. Recently, VHA member hospitals in Nebraska and Iowa (Midlands network) committed to join Mid-America Service Solutions this summer, which will mean an additional 17 hospitals.
JHC: What goals does Mid-America Service Solutions hope to accomplish in its first five years?
Andersen: Our primary goal is to drive value for our participants. We also strive for Mid-America Service Solutions to account for 75 percent of the member purchases. We will explore shared services in order to drive greater cost-savings and efficiencies. To date, our annualized 2011 savings are more than $25 million. The more our members participate, the more savings they will achieve. Our growth and success has increased our marketplace leverage. Suppliers respond favorably because they realize we function and act as a single network, rather than as individual purchasers, and that dynamic leads to increased value.
JHC: Can you explain the process whereby your supply chain executives meet and make their decisions?
Andersen: Mid-America Service Solutions’ governing board meets quarterly. The finance committee meets monthly. The operations committee meets twice monthly (once via telephone and once in-person). We have a full time staff in VHA’s Mid-America regional office dedicated to Mid-America Service Solutions. We also have support staff at VHA’s corporate office in Irving, Texas. To ensure that each of our members’ interests are considered and met, we have an engaged CEO board, the finance and operations committees, various clinical subcommittees and the regional networking councils. It really comes down to ongoing communications with member constituencies. A formalized council structure provides a solid foundation to facilitate Mid-America Service Solutions’ initiatives.