Supply Chain’s Fight Against Cancer

New alignment and new projects highlight New York cancer center’s commitment to end cancer for life.

September 2023- The Journal of Healthcare Contracting

Kreg Koford joined Memorial Sloan Kettering Cancer Center in 2018 as Senior Vice President of Supply Chain and Hospital Operations. After being responsible for $2.2 billion of non-labor spend at Intermountain Healthcare in Salt Lake City, he was tasked with bringing a bold vision and developing new opportunities in existing relationships to transform how the cancer center buys, distributes, and uses resources.

Founded in 1884 and located in the heart of New York City, Memorial Sloan Kettering’s (MSK) mission is to end cancer for life. That focuses its strategy and its three pillars of education, clinical care, and research to create the best possible outcome for the patient, according to Koford.

He’s been building out teams, processes, and technology over the past five years, and COVID-19 hit just after onboarding his leadership team in 2019. “We’ve been on a journey with a pandemic right in the middle of it,” he said.

Leadership team

When Koford first arrived at MSK, he retained Lisa Lieberman, the interim supply chain leader, as the Senior Director Operations, to maintain and learn from her 25-years’ experience in working within the MSK organization. Lieberman drove the supply chain operational planning and goal setting efforts, as well as leading the supply chain transformation. 

Koford enlisted Aaron Tappan as Senior Director of Materials Management. Tappan previously worked at Bloomberg for over 20 years in New York City and understood the density of distribution and the complexities of a city environment. “We brought Aaron on intentionally from outside of the industry to revamp our materials management group,” Koford said. “He had the right leadership skills to build a team around.”

Koford then recruited another key hire, Mohamed Guiro from Intermountain, as Director of Strategic Sourcing with a background in pharmacy. MSK estimates about $1.5 billion of its $2.5 billion spend is in pharmaceuticals. “Mohamed managed the Pharmacy portfolio at Intermountain and has a background in supply chain expertise to understand the rigor and the alignment needed in all clinical and non-clinical areas of sourcing and contracting,” Koford said.

After Lieberman transitioned to a critical internal position, a vital leadership role needed to be filled. In stepped Jamie Green at a pivotal time in the supply chain’s transformation, taking over as Senior Director of Operations for informatics, purchasing, and supplier diversity. Green came from CommonSpirit Health and was recruited through a national search. “We’re really at a time where we have depth and breadth of experience, and seasoned leaders to help us mature every aspect of the supply chain,” Koford concluded about his team.

The pandemic has improved supply chain’s impact within health systems. Today, it’s viewed as more strategic by healthcare executives and is recognized for being essential in the day-to-day functioning of a health system.

Supply chain stands to assume an even more strategic role going forward for many health systems, including at MSK.

Shared services

Koford says they recently finished an 18-month project that centralized all of MSK’s logistics associates to its materials management group. “It’s complete and it has impacted the operating model for non-clinical, ambulatory care, and hospital sites,” he said.

During the course of the project, he asked MSK executives to think differently about shared services, including:

  • The areas being centralized or integrated.
  • How the teams align and how to ensure a comprehensive change management approach.
  • How the teams demonstrate value and support business development.
  • Development of succession plans and career paths that will drive personal and professional growth opportunities throughout the organization.

“It hadn’t really existed in the organization before. We used to run a lot of these things vertically resulting in redundancies, but there was an institutional push to codify shared services,” Koford explained. “It drives efficiency, standardization, and team mobility across all areas.”

MSK’s fight against cancer and its specialized pharmaceutical supply chain

MSK’s fight against cancer is highly dependent on specialized drugs. Koford estimates close to 95% of its pharmaceutical portfolio is sole source, or drugs that don’t have alternatives. “Because of that, we work very closely with our distributors and manufacturers to understand the market and what’s going on,” he said. “Then, we make sure we secure the right products and understand the supply chain and availability through the supply chain.”

The cancer center offers unique treatments from a pharmaceutical perspective, and MSK must ensure it can access drugs like ones used in investigational drug services, because it runs over 900 investigational studies per year. Chemotherapeutic treatments and oncology medications drive the high cost of pharmaceutical supply chains for cancer centers, but the total pharmaceutical supply cost is negotiated between IDNs, GPOs, suppliers, and payer reimbursement rates. 

“Our informatics team is helping design the inventory management processes for pharmacy and trying to manage a point of distribution all the way up to our suppliers to really understand those complexities,” he said. “Similar to other organizations, we have to know what the manufacturers are doing and about the disruptions in the industry, and then respond and be creative. Our doctors are doing that.”

Physician engagement

Dr. Selwyn M. Vickers arrived in September 2022 as the new President and CEO of MSK. An internationally recognized pancreatic cancer surgeon, researcher and pioneer in health disparities, Dr. Vickers most recently served as CEO of the UAB Health System and CEO of the UAB/Ascension St. Vincent’s Alliance, while retaining his role as dean of the UAB Heersink School of Medicine.

“He’s been very supportive of the organizational change and alignment with supply chain,” Koford said. “We’ve also redesigned our direct report structure, and I have a direct line to the chief administrative officer and one to the president for accountability to make sure we’re delivering our services.”

Koford and the Supply Chain team collaborate with MSK executive leadership across the organization to ensure alignment and prioritization. Patient care is a top priority at MSK, and this collaborative approach gives supply chain credibility and support throughout the organization in its alignment with nursing staff in decision making. 

“We continue to build on those capabilities to help the clinicians work at the top of their license and help bring them the information and opportunities around clinical product decision and potentially switching or saving costs,” Koford said.

Designs on a new CSC

Koford is reviewing designs for a consolidated service center (CSC) to help optimize MSK’s physician cycles and to serve its ambulatory surgery sites.

“We’re in the process of vetting it out,” he said. “But that activity would move outside of the city. The circumstances in which we work are hyperdense in Manhattan. So, when we think of our network, we think about transportation, logistics, routes and all of those things that Aaron (Tappan) and his team have been trying to analyze and optimize.” 

Koford says they’re working on inventory levels, technology integration, and automation in their replenishment system. “All of those have work streams and will be rolled out as a big project over the next 18 months,” he said. “Our central lab is a six-story building that has embedded materials management and we’ve brought in an ASC that’s down the street. It’s a staged approach to bring all of these groups into reporting to one central entity.” 

Tappan’s team expertise in materials management, logistics, and dock management lends it credibility and it’s a part of the steering committees created by MSK. These support identifying opportunities for efficiency, technological advancement, process simplification and simply reducing the number of trucks coming into the Upper East Side of Manhattan.

Supplier Diversity Program

According to Koford, MSK has set a target of $100 million in diversity spend over the next five years. “We’re about a third of the way there today before we fully roll out this program,” he said. “There’s a tremendous amount of opportunity to connect with our community and help our suppliers better reflect our patients, while providing opportunities for growing and investing in these businesses.”

Koford says there’s huge support for it within the organization. MSK is dedicated to equality, diversity, and inclusion. It has pledged an institutional commitment to become a more inclusive and diverse institution, and it believes this is fundamental to driving innovation and to achieving its mission of saving and extending lives. Building a diverse and inclusive culture is essential to providing high-quality care to all of its patients.

“Our next phase of the supplier diversity program was recently pitched to our senior leadership team,” Koford said. “We think it will yield a lot of opportunities.”

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