When a health system acquires non-acute facilities, materials management has a challenge on its hands. Adapting processes designed for acute-care hospitals to the unique needs of ambulatory care facilities requires flexibility and often, a willingness to change course.
That’s what Chris Voorhees, CMRP, discovered recently when she helped steer Hunterdon Medical Center away from self-distribution to outsourcing.
Like many hospitals and health systems, Hunterdon Medical Center – a 178-bed teaching hospital in Flemington, N.J. – has been rapidly building its non-acute-care presence. Hunterdon Healthcare System has 27 physical locations in four counties in addition to the main hospital campus. These ambulatory sites house 77 different cost centers and more than 1,000 full-time employees. Their services include family practice, pediatrics, wound care, specialty care, ambulatory surgery, home health and hospice, health and wellness centers, integrated medicine, child care, physical and occupational therapy, behavioral health, mobile intensive care and urgent care.
Last year alone, Hunterdon Medical Center brought on 14 medical practices.
For years, Hunterdon Medical Center had been self-distributing equipment and supplies to its nonacute- care sites, explains Voorhees, administrative director, materials management. The ambulatory sites would log onto Hunterdon Medical Center’s EHS materials system (or pick up the phone) and order products and equipment. Supplies would be maintained in a central warehouse. The medical center’s acute-care distributor would drop off those products at the hospital’s receiving dock. Hunterdon Medical Center’s materials staff would then stock them, pick them, load up the vans and truck them out to the non-acute sites.
The system got more complicated as Hunterdon Medical Center acquired and opened more ambulatory sites.
The distributor’s truck would arrive at the dock at around 6 a.m., at which time receiving would begin stocking items in Hunterdon Medical Center’s storeroom. By about 9:30 – before all the items were stocked – distribution would begin picking and loading the vans for delivery to the non-acute-care sites.
“We started to monitor what items were coming in almost every day from our primary distributor, and how fast we were turning them around to place them in our courier vehicles to redeliver to the ambulatory sites,” says Voorhees. “It was not making sense.”
To maintain order, materials limited Hunterdon Medical Center’s ambulatory sites to one order per week. “But the orders got to be so big, our folks had trouble managing the workload,” so once a week became two or three times a week, she says. Given the rapid growth of ambulatory sites, “we could not keep up with the picking and delivering of orders. Staff was unable to complete their work.”
The Customer Experience
The materials staff had created some general catalogs, specialty catalogs and a sticker catalog (for kids’ items), from which buyers at the non-acute sites could electronically order supplies. But the system wasn’t easy to learn or use, says Voorhees. And whenever one buyer or office manager resigned, the materials staff would have to go to the site and train his or her replacement on the system. Training became a full-time job. “It took a lot of work to get everybody on the same page,” she says.
In the midst of all the activity, Hunterdon Medical Center was missing opportunities to standardize products and lower non-labor costs, says Voorhees. The ambulatory sites were using some items contracted for the acute-care hospital, even though less expensive ones would work just as well in the non-acute setting. Given that space in the storeroom was at a premium, the materials staff simply didn’t have the space to store two or more sets of similar items. “We knew we needed to streamline our process.”
McKesson Medical-Surgical was already familiar to Hunterdon Medical Center. The company had been servicing the health system’s surgery center and home health/hospice operations for some time. Moreover, some of the newly acquired physician practices had worked with McKesson, and were pleased with the service.
“We began discussions internally and realized how many times we were handling products, from processing orders, to picking them, to handing them off to a courier, etc.,” she says. “We knew many of those steps could be eliminated. And we wanted to explore low-unit-of-measure with a partner.”
What’s more, Voorhees had reached the point where her department would have to hire additional staff to manage the growing nonacute- care workload. “The courier vans were full, and my staff was feeling over-burdened,” she says. Given these things, administration was open to a discussion about outsourcing non-acute distribution.
McKesson Medical-Surgical was already familiar to Hunterdon Medical Center. The company had been servicing the health system’s surgery center and home health/hospice operations for some time. Moreover, some of the newly acquired physician practices had worked with McKesson, and were pleased with the service. A new manager in purchasing – Don Donofry – had come from a larger system that used the distributor for non-acute-care distribution. “He shared his experience with us, and we started to explore it,” says Voorhees.
Download the complete article to continue reading about Hunterdon Healthcare’s switch to from self-distribution to outsourcing with McKesson, and learn about how the switch helped them save on costs and efficiencies.