Published in conjunction with the Journal of Healthcare Contracting
Managing the financial performance of multiple sites across the non-acute care continuum can be challenging. It calls for stakeholder alignment across numerous functions, including pharmacy, lab, clinical and practice operations.
You may ask yourself, “Why should I waste my time and energy on just 2 percent of my total supply chain spend? After all, that’s about how much my non-acute facilities spend in total!”
Good question. That 2 percent will account for a much larger percentage of your headaches if you don’t get non-acute spending under control. Chances are, you’re going to need help in taking control.
“Already, 95 percent of patient visits occur outside the hospital. That percentage will no doubt grow in the years to come.”
– Greg Colizzi, Vice President of Marketing, Health Systems, for McKesson, addressing a recent Supply Chain Leadership Forum in Chicago for small and midsize IDNs
“It’s a whole new world outside the hospital,” he said. “You’re dealing with people who are used to practicing independently. They take care of patients the way they feel is best, and they use the resources that they believe will help them do that.”
Needless to say, efficient supply chain management isn’t always top of mind.
Consider this, if an IDN supplies 100 doctors in 25 facilities, supply chain has to manage an average of:
- 25 central stocking locations
- 25 labs
- 25 pharmaceutical stocking locations
- 3.5 exam rooms per doctor
That’s 25 micro-supply chains, 425 stocking locations, and a lot of people placing orders – none of whom are trained on supply chain.
So how can the supply chain executive lead change across all those facilities?
Gaining control of the non-acute continuum begins not with dictates, but rather, with buy-in, trust and, most of all, communication. It calls for stakeholder alignment across numerous functions, including pharmacy, lab, clinical and practice operations.
“You have to manage [non-acute buyers and users] as you manage internal customers,” said one supply chain executive at the Leadership Forum. “You have to be the steward of the contracts and help them with their complexity.”
For example, to supply chain professionals, the merits of product standardization are obvious: It brings about efficiency, financial benefits and buying leverage. But the office managers and doctors who practice in the non-acute facilities may see it as something that supply chain is mandating in order to cut costs, with no regard for patient care.
The challenge for supply chain is to demonstrate that standardization can help those non-acute sites reduce clinical variation, clinical staff training time, inefficient ordering processes, and time spent hunting for the right supply or piece of equipment. That means greater patient convenience and satisfaction, improved throughput, and more time on patient care.
Managing the financial performance of multiple sites across the non-acute care continuum can be challenging. Several executives at the Leadership Forum pointed to the difficulty of gathering purchasing and usage data from multiple sites, with multiple information systems. Another noted the difficulty of managing backorders.
“How can we make this process less complicated?” asked one executive. “How can we streamline the delivery of products and services” to non-acute care sites?
“To succeed in the growing non-acute supply chain, professionals will have to rely on usable, intelligently presented reports on fill rates, order sources, formulary compliance, product variation and more”, said Colizzi. Armed with these reports, supply chain and the clinical/operational team together may identify opportunities for savings, improved productivity and revenue enhancement.
For more information on tools to help supply chain executives take control of the non-acute-care continuum, visit mckesson.com/takecontrol.