Servicing non-acute-care sites demands automating the supply chain
You just got the memo: Your IDN has acquired a nearby healthcare system with 50 non-acute care sites, mostly physician offices, with a few surgery centers and long term care facilities thrown in.
It’s great news for the board, administration and the population served by the growing healthcare system. But for supply chain executives? They may take a more tentative view. After all, most learned their craft in the acute care environment.
To them, the non-acute care world may look a little messy and inconsequential. After all, how many dollars are spent by physicians’ offices versus the acute care hospital? But healthcare is moving, inexorably, toward the continuum of care, and the supply chain leader of tomorrow will have to embrace it.
“Upon initial assessment of the non-acute supply chain and its strengths, weaknesses, and opportunities for improvement, I found that it was much less automated than the acute supply chain,” says Steve Piraino, director, corporate purchasing and supply chain management, Einstein Healthcare Network, Philadelphia, who came to the position in October 2009. “There was no EDI, no formulary, no usage of our GPO contracts, multiple distributors, and a lot of transaction discrepancies and re-work.”John Frain, director and head of supply chain at Weill Cornell Medicine in New York, discovered much the same thing when he joined the IDN in March 2012.
“The non-acute care sites were using a number of medical/surgical distributors, including one known primarily for acute care distribution,” he says. “We had stockouts; technology was poor; the website was not user-friendly; and we were failing to leverage our spend and purchasing from one primary supplier.”
Fighting the battle…again
“As non-acute care settings come into the purview of supply chain executives, one of the key issues they face is balancing clinician satisfaction with the supply chain leader’s need for control,” says Jon Pildis, vice president, materials management, McKesson Medical-Surgical.
“Really understanding your spend, your contract compliance, and how the supply chain contributes to patient care and quality, becomes very difficult as the supply chain extends all the way to patients’ homes.”
– Jon Pildis
Pildis leads a team of supply chain professionals who manage the flow of inventory from more than 2,600 supplier partners to McKesson’s Medical-Surgical’s network of distribution centers.
“Clinicians who have grown up in the non-acute care setting aren’t used to being told which gloves and gauze to use,” he says. “In the acute care setting, most IDNs have already fought that battle. But having to refight it with people who in some cases were entrepreneurs or practice owners is a big challenge.
“Supply chain executives face other dilemmas as they approach their newly acquired physician practices. For example, there’s the difficulty of obtaining spend and performance analytics across the extended supply chain, says Pildis. It may be commonplace for IDNs to implement one information system across all their hospitals. But that’s usually not the case with scattered nonacute sites. “Really understanding your spend, your contract compliance, and how the supply chain contributes to patient care and quality, becomes very difficult as the supply chain extends all the way to patients’ homes.”
The supply chain executive may be surprised – or not – at the frequency with which the non-acute care sites order supplies, or the amount of inventory they stockpile, or their failure to rotate product. “These are the basics that most hospitals have already figured out,” says Pildis.
“The other thing to keep in mind is the limited resources you typically find in the traditional physician office,” he continues. “Office managers and nurses are involved in supply chain duties, but adhering to inventory best practices is not at the top of their list. They’re focused on patient care. They will often do what is the quickest and surest way never to run out of product. And that can lead to some behaviors that are vexing to supply chain executives.”