Earning Your Keep

Executive Interview: Tom Terry

At Bassett Medical Center, the first ‘R’ in ‘ROI’ stands for ‘relationships’

Tom Terry is the first to admit he enjoys certain advantages over many of his colleagues in the industry. Virtually all of the physicians and surgeons who practice at Bassett Medical Center in Cooperstown, N.Y., are employed by the hospital. Furthermore, its CEO – William F. Streck – is a physician as well. “We have integrated network value analysis teams, and physicians participate on each and every one across the continuum,” says Terry, senior director, network supply chain management. (Bassett Medical Center is part of Bassett Healthcare Network, which comprises five hospitals, 30 clinics, two outpatient surgery centers and two nursing homes in central New York.)

But that’s not a free pass. Terry and his team are on the line to demonstrate their ROI to the network every day. They work hard to identify and enlist the support of willing, enthusiastic clinicians in the value analysis process. They have “embedded” nursing expertise within supply chain, to bridge the gap between clinicians and supply chain. And supply chain’s buyers – called sourcing coordinators – are on the medical floors regularly, soliciting input from clinicians on how supply chain can best meet their needs.

The result? Clinicians who are committed to contracts with vendors of sensitive physician-preference items, such as stents and implantable cardio defibrillators. Not to mention performance-based incentives from vendors based on meeting established and agreed-upon market share volume. “In cardiac physician-preference product lines, we will drive in excess of a quarter of a million dollars in performance incentive rebates, by meeting our targets,” says Terry. Having a check in hand for administration speaks volume for supply chain’s ROI, he adds.

Clinical resource program manager

Terry has, self-admittedly, been around the block, with 40 years of healthcare experience at the hospital and consulting levels. And he’s picked up a lot of wisdom along the way. For example, early in his career, he got an idea from the supply chain consulting firm McFaul and Lyons to bring into supply chain a registered nurse, to serve as a clinical resource program manager.

“When I come to a place, I take 90 days and just watch,” he says. He looks at the people participating on the value analysis teams, with a special eye for those who are most knowledgeable and enthusiastic, as well as those who have the best relationships with the physicians. Bassett’s current clinical resource program manager – Jackie Webster, RN – fit the mold. Webster was (and remains) an enthusiastic value-analysis participant, with strong clinical knowledge, as well as experience in infection control. She had one other attribute that Terry believes is essential for the role: “She’s someone who can facilitate in the middle. She’s in the line of fire.” And she doesn’t mind.

Another way Terry has bridged the clinical/supply chain gap is to “embed” supply chain people in the OR. An embedded supply chain business manager answers to the perioperative director and Terry. “We are wrapped and linked together from both an operational and strategic perspective,” he says, referring to supply chain and the OR. “That helps secure and hard-wire all budgets, new products evaluations, pro formas, etc.”

These relationships help supply chain be a strategic partner with the healthcare system in its overall mission of providing high-quality, low-cost care, with emphasis on the word “strategic,” says Terry. “We actively involve our physicians in strategic decisions.” The results include successful negotiations with vendors for even the most sensitive of items. “From an IDN perspective, we have no more than two [physician-preference] vendors in any area,” including orthopedics, arthroscopy and cardiac surgery. “And we usually have a prime.”

Terry believes Bassett’s contract prices are exemplary, but not necessarily the lowest. “Does somebody have a better price at the pump than me?” he asks. “Most likely – 2, 3, maybe up to 4 percent. But nobody is driving performance-based incentives like I am,” he adds, referring to the cash rebates based on participation. “It’s a different model. You have to have the physicians involved, and appropriate relationships with nursing and vendors to drive it.

“We’re driving incentives based on compliance. It’s pay-for-performance. And if we don’t hit our numbers, we don’t receive as much.” Supply chain’s projected savings are plugged into the budget at the beginning of the year, and the department is held accountable on a monthly basis. But supply chain isn’t the only group with skin in the game. “The stakeholders are the C suite (the champion is Dr. Bertine McKenna, COO), the doctors (champion is Dr. Steve Heneghan, CMO), all our network teams, all the way to the department level,” he says. “Ours is a very interactive system.”

Back to relationships

Today’s supply chain executives definitely enjoy some advantages over their predecessors, says Terry. “The information tools we have today make it a whole different ballgame than it was even 15 years ago. Then, they didn’t exist.” Then, vendors had far more information than their provider customers on product usage and contract compliance. “Today, things are far more equitable when we sit to talk to vendors,” he says.

But the stakes are higher. “Regulatory and reimbursement issues have changed dramatically,” he says. “That plays into the heightened sense of urgency for supply chain to deliver cost reductions or cash.”

Today’s supply chain teams need new skills. “In the past, it was, ‘I’m going to fight you for a nickel,’” he says, referring to materials management’s stance vis a vis vendors. “But there could be a dollar going out the back door that you didn’t have a clue was there. Today, you still need those purchasing skills. But you need a whole set of relationship skills too.”

That’s why Bassett’s clinical resource program manager and sourcing coordinators are on the floors regularly. Using communication tools from healthcare consultant Quint Studer, they ask users how supply chain is meeting their needs, and what they can do to improve service. (Terry calls himself a “prophet” of Studer’s “Rounding for Outcomes” approach to customer service.)

Yes, Terry admits he has a distinct advantage over some of his counterparts in that most of Bassett’s physicians and surgeons are employed. But he and his team work hard to press that advantage.

“In this facility, physicians have ownership in our decisions, because they’re participating,” he says. “We don’t do things in a vacuum. Everything we do is based on relationships.”

To the point

One of Tom Terry’s key management tools – Rounding for Outcomes – is one of Studer Group’s Must Haves®. Rounding for Outcomes includes communicating with employees, physicians and patients in such a way that there is a specific purpose to gain specific outcomes. Some of those outcomes include reward and recognition of staff, increased safety for the patient and alignment across the organization. It is the process of proactively engaging, listening to, communicating with, building relationships with and supporting your most important customers, according to Studer Group. That includes employees, physicians, patients and families.

There are four types of rounding; Senior Leader Rounding, Rounding on Staff, Rounding on Patients and Rounding on Internal Customers. By hardwiring a disciplined culture of rounding, organizations capture unique opportunities, collect and communicate the wins, manage up, and reward and recognize staff, according to Studer Group.