Andy Motz
Vice president, chief procurement officer, Sisters of Charity Health System, Cleveland, Ohio.
Sisters of Charity Health System consists of five hospitals, two elder care facilities, three grant-making foundations and six outreach organizations in Ohio and South Carolina; total purchasing volume of over $200 million in supplies and purchased services.
Andy Motz joined Sisters of Charity Health System in 2012 as the organization’s inaugural chief procurement officer. His previous experience at Deloitte Consulting’s healthcare provider practice prepared him well for his new responsibilities, which include managing supply chain operations for the IDN’s member hospitals in Cleveland, Ohio; Canton, Ohio; and Columbia, S.C. He also provides support for the procurement needs of its outreach ministries and foundations in all three communities. His collaborative efforts have enabled him to organize and engage value analysis teams toward implementing more than $25 million in supply chain savings over his first two years.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Andy Motz: The most challenging project to date has been converting group purchasing organizations (GPOs). As a geographically dispersed health system consisting of mid-size hospitals, we couldn’t bring the volume necessary to reach best-tier pricing with our previous GPO. We converted to a GPO that allows us to reach best-tier pricing by committing market share, rather than total dollars spent. This has allowed us to remove $4.2 million in med/surg contract spend and over $900,000 in pharmaceutical costs from the health system. The entire conversion process has taken about one year, beginning with the request for information, completing letters of commitment and working through contracted pricing issues with our med/surg distributor.
JHC: Please describe a project you look forward to implementing in the next year or two.
Motz: Over the next year, our hospital supply chain will continue to focus on lowering high implant costs. We are considering several strategies, including vendor standardization and consolidation, manufacturer-direct purchasing, and direct negotiations. Standardization of vendors will require collaborating with our surgeons and addressing their needs and ensuring the same high quality. We have also had success in identifying the original manufacturer for products such as PEEK inter-body spacers, which results in significant savings. With the cooperation of surgeons, we will continue to seek out the original manufacturer and attempt to contract directly with them. But if neither of these options works, our goal will be to reduce costs with our current vendors.
JHC: What is the most important quality you look for in a supplier partner?
Motz: The most important quality we look for in a supplier partner is its commitment to quality while considering the financial operations of the hospitals. We need supplier partners to work with us to be as efficient, quality oriented and cost conscious as possible.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Motz: We will continue to see supply chain take a more active role in budgeting and planning. Supply chain is one of the most unique departments of a hospital in that it has access to – and influence over – every department. Yet, it often is brought in at the last minute to review service contracts for clinical engineering or new capital equipment purchases. By bringing supply chain to the decision table, it can and will lead hospitals to reduce total operating costs, while maintaining or improving patient outcomes.