Kevin Hines
Associate vice president, network materials management, St. Luke’s University Health Network (SLUHN), Bethlehem, Pa.
Six hospitals; over 150 sites in Pennsylvania and New Jersey, including primary care and specialist physician practices; 1,342 physicians, 55,300 annual admissions, and 9,400 employees; over $156 million in annual purchasing volume.
Kevin Hines joined St. Luke’s University Health Network in 2012, following 17 years of service with Premier, Inc. Today, he oversees purchasing, contracting and supply chain logistics, including supply, warehouse, linen and mail distribution, inventory control, couriers and print shop, for six acute care and 150 non-acute care facilities.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved with recently?
Kevin Hines: Two projects I have found to be particularly rewarding have been to implement a network value analysis committee and open a centralized distribution center. While value analysis is not a new strategy, SLUHN did not have an active committee. Given the mounting pressure of healthcare reform, it was imperative to develop an infrastructure that could objectively analyze supplies, purchased services and equipment. The analysis had to be able to balance clinical outcomes with financial impact for optimal patient care. I helped lead the development and implementation of a sustainable structure, designed to begin operating at a high level, with a $22 million savings after the first 10 months. In addition, I helped open a 30,000-square-foot network distribution center. This was an immense undertaking that involved centralizing stock items from six hospitals without disrupting patient care. Through careful planning and communication with clinical and operational staff at each facility, we accomplished our initiative in 10 months.
JHC: Please describe a project you look forward to implementing in the next year or two.
Hines: We are formalizing a “look-back” program that measures the financial and clinical impact from changes made on supplies, service and equipment. These are times when savings are estimated and budgets are adjusted, but they aren’t realized. For example, if we estimate a cost increase based on converting a supply that promised reduced length of stay or reduction in infection rates, does this actually happen, or have outcomes remained the same while costs have increased? We must focus on the continuum of care – not just the cost.
JHC: What is the most important quality you look for in a supplier partner?
Hines: We seek suppliers that are willing to align their objectives with those of the network and look beyond profit margin to help improve the health of patients and the community, as well as the financial safety of the network. Our relationship with B. Braun is an excellent example of a partnership that extends beyond a pricing agreement, and focuses on patient outcomes. Together, B. Braun and SLUHN are assessing a regional anesthesia program using evidence-based medicine to decrease patient length of stay, decrease nursing interventions, improve patient pain scores and decrease drug and supply costs.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Hines: As a result of healthcare reform, I foresee suppliers changing their business models to meet the ever-changing needs of healthcare. I see them becoming more involved with reimbursement and readmission rates. And, I foresee there will be more opportunity for providers to source directly with manufacturers on commodity items, eliminating distributor markups.