Quality First

Michael Hildebrandt is not afraid to engage his colleagues, physicians and hospital leaders, and embrace new ideas, if it leads to bottom line results for the IDN.

It’s no surprise that Michael Hildebrandt gets healthcare supply chain management. It was a combination of experience and perspective that led him to his current position – associate vice president of supply chain – at Scottsdale Health (Scottsdale, Ariz.), where he currently has oversight for all of the 833-bed ($200 million annual spend) IDN’s supply chain activities. Before joining Scottsdale Health in 2007, he maintained leadership roles in healthcare supply chain management for 25 years, including positions at Tampa General Hospital, JFK Hospital, Sarasota Memorial Hospital and High Point Regional Health System.

“After graduating from the University of Notre Dame I was fortunate to find employment as a healthcare supply chain logistics worker,” Hildebrandt recalls. “This job enabled me to learn and practice every aspect of supply chain, including receiving, sterile processing, distribution and logistics. As I progressed in my career, I [was able to] move into purchasing and materials management. While I continued to learn about group purchasing organizations, vendor negotiations, finance budgets and capital equipment, I earned a master’s degree in management. I believe this extensive work experience, plus the academic background, has prepared me well to face both current and future challenges in healthcare supply chain.” And, it didn’t hurt that both his mother and his wife are registered nurses, he adds. “This has helped me [develop] a better understanding of the many challenges faced by clinicians and physicians when caring for patients.”

Big challenges, bigger rewards
Managing a fine-tuned supply chain process at Scottsdale Health requires that Hildebrandt oversee a number of activities for the IDN’s three hospitals and various outpatient surgery centers, home health center and other affiliations, including trauma services, cancer research and treatment, orthopedic services, labor and delivery, women’s services and medical/surgical units. He is responsible for purchasing, receiving, logistics, patient transport, courier services, print and the mailroom.

In addition, Hildebrandt has helped expand Scottsdale Health’s Clinical Quality Value Analysis (CQVA) program to form a seven-team CQVA project. The teams’ interdisciplinary constituents, comprised of nurses, physicians, finance professionals and other clinical experts, collaborated to identify products that are both cost- and clinically effective in areas that include physician preference items, med/surg supplies and perioperative surgery.

To better negotiate on price and modernize his purchasing processes with his hundreds of vendors, Hildebrandt used advanced analytic tools and evidence-based data to support using alternative products – a strategy that contributed to a $2.8 million savings in spine-related products, and a $759,000 savings in orthopedics-related products.

Other supply chain process improvement initiatives that Hildebrandt has led have resulted in $3.5 million savings in pharmacy, a $2 million savings in cardiology and a $1.6 million savings in perioperative services.

Most recently, Hildebrandt was engaged in a project aimed at facilitating the flow of supplies to the IDN’s nurses. “During the past year, I have been very excited to lead a quality process improvement project to improve the flow of medical supplies to all of our 69 nursing medical units,” Hildebrandt explains. “We partnered with our internal quality process improvement department and our nursing customers to review our current distribution model and seek ways to improve the system by utilizing lean six sigma concepts and tools. By the end of the project, we were able to reduce stockouts, establish accurate par levels, reorganize the supplies into easily identified color coded bins, and improve the scanning accuracy from 65 to 90 percent. We were also able to improve revenue collection and nursing customer satisfaction.” The project not only led to improved operational and bottom-line results, it earned him and his team the 2012 Arizona Quality Showcase

Award of the Arizona Quality Alliance.
Hildebrandt’s success has depended not only on his ability to engage his peers, senior hospital leaders and physicians at Scottsdale Health, but also to forge a smooth relationship with his supplier partners. “When working with our supplier partners, the most important quality I look for is honesty and trust,” he says. “Our most successful supplier relationships exist when the hospital and supplier sit down together to discuss common goals and objectives, while seeking collaboration to achieve those goals. It is very rewarding to be able to transparently share information, set mutual goals and targets, and conduct scheduled business reviews to make sure that everything is on track.”

What lies ahead
Over the next couple of years, Hildebrandt and his team look forward to working with the IDN’s physicians, supply chain administration and clinical leaders to implement a bundled payment program. “This innovative program is being offered to hospitals under the healthcare reform legislation,” he explains. “For the first time in my career, supply chain will be able to work closely with physicians to improve patient care outcomes, while reducing costs and waste. If we are successful, the physicians will be financially incentivized. We have had several preliminary meetings with our physicians and believe this is a win-win scenario for healthcare in the United States, as well as for our physicians, our patients and our organization.”

Indeed, he anticipates that over the next five or so years, supply chain leaders will develop stronger relationships with physicians, particularly as more physicians are employed by providers, and co-management models and innovative programs, such as bundle payments, emerge. “When this relationship solidifies, I believe that providers and supply chain leaders will be working closely with physicians to standardize products, reduce the number of vendors and seek out fewer, but stronger, supplier partners. I also believe that the successful supply chain leader of the future will be well educated in quality process improvement and supply chain technology, while being able to effectively communicate and collaborate with all levels of the organization – especially physicians and clinicians.”

Editor’s note. Mike Hildebrandt currently is a board member of both AHRMM and the Health Sector Research Consortium. He served as president of the Arizona Healthcare Materials Management Association in 2010; is a past winner of the VHA Supply Chain Leadership award; and was named as one of the Ten People to Watch in the Journal of Healthcare Contracting in 2008.

About the Author

Laura Thill
Laura Thill is a contributing editor for The Journal of Healthcare Contracting.
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