4 Keys to a Clinically Integrated Supply Chain

A hospital supply chain that fuses logistical and purchasing operations with clinical elements is paramount to providing optimal supply chain results. However, achieving a clinically integrated supply chain requires a facility-wide culture change to take effect before improvements and value drivers are optimized.

A clinically integrated supply chain incorporates all appropriate hospital parties into its processes. It takes into consideration the roles of executive leaders, physicians, clinicians, finance and  clinical outcomes to deliver high quality, cost-conscious products and services that improve patient outcomes within an organization.  

Bill Barber, senior vice president of purchasing and materials operations, and Michael Costante, vice president in supply chain services, both of Alpharetta, Ga.-based MedAssets, offer an approach to reach a clinically integrated supply chain, beginning at the top of the leadership structure and working down.

"By having a clinically integrated supply chain, you are involving all the major players together in order to identify the product, the patient and the outcomes," Mr. Barber says. "Value drivers are a result of having a very robust clinically integrated supply chain process that works together, communicates well, get processes and issues completed quickly and delivers clinical results efficiently."  

Senior leadership support
Mr. Barber and Mr. Costante emphasize the importance of the role senior leadership plays when developing a clinically integrated supply chain. Senior leaders have a more comprehensive role in the overall structure of the organization and can bring all necessary parties together to develop operational and clinical processes to achieve optimal care at optimal cost.

Senior leadership involvement helps drive the culture change that is necessary for hospitals to shift toward a clinically robust supply chain.

"Hospitals know they spend a lot of money on supplies. Senior leadership has the understanding that there is a larger view regarding the strategy of the organization that can be tapped into to control costs," Mr. Costante says.

"Senior leadership is the driving force that holds this entire process accountable, bringing the clinicians to the table, understanding the financial impact and, most importantly, connecting the dots between price, process, patient care and payment," Mr. Barber adds.

Physician engagement and education
Clinically robust supply chains require the involvement of physicians and clinicians because they are the largest consumers of supplies within the hospital. Engaging and educating physicians in the process allows hospital staffers to determine shared goals and understand the direction and processes of improving the supply chain and patient outcomes.

Physicians are not always aware of the cost of the materials they are using. A recent study published in Health Affairs found only 19 percent of physicians and residents could accurately estimate the price of 13 common orthopedic devices. Mr. Costante suggests value analysis meetings are beneficial to helping clinicians understand the costs associated with the care they provide.
   
"In the [operating room] there are no price tags on products," Mr. Costante says. "Once you have clinicians coming to value analysis meetings, make sure they're clear on their roles and, most importantly, have the data accurate. This may involve a pre-meeting with physicians validating the data."

Product variation reduction
A large part of clinical engagement and education is geared toward reducing product variation and encouraging product standardization.

"A clinically integrated supply chain removes the 'preference' from the equation," Mr. Costante says. "You have a formulary that's working that's making sure you're consistently paying the right price."

"Working with the clinicians, you're able to standardize certain products," Mr. Barber says. "By getting everybody in the room together, you're able to reduce variation by having one type of exam glove or one type of suture versus multiple types where you then have the additional cost of purchase orders, storage and inventory value."

Consolidating suppliers and reaching standardization helps achieve supply chain value drivers by significantly cutting costs, as the embedded costs for working with individual suppliers quickly adds up.

"To order similar products from multiple suppliers adds additional cost to the hospital," Mr. Barber says. "There are inherent overhead costs associated with multiple suppliers and multiple products."  

Staff training and education are also bolstered by product standardization because every clinician learns how to use the same products throughout the facility, Mr. Costante says.

"Close the loop"
While materials managers are working with physicians to achieve the clinically integrated supply chain, Mr. Costante and Mr. Barber emphasize the significance of following-up with relevant data and lauding physicians for their efforts in improving supply chain strategy.

"It is important to close the loop with physicians," Mr. Barber says. "Delivering data on standardization and utilization helps provide physicians with the necessary insight into current performance and contract compliance to better address areas for additional cost reductions and further clinical alignment."

Physician engagement is requisite to producing a clinically integrated supply chain, so physicians need to know how they are affecting change on the clinical side. Mr. Barber says that while having accurate data in a presentable and understandable format can be a challenge, it is also key in making the big decisions, identifying progress and shortfalls and forming action plans to continue advancing.

"It goes from changing that organization culture into one that is really about driving value, making sure you're utilizing the right product for the right reasons, engaging your clinician in the process," Mr. Costante says. "The real benefit is the organization change that comes of [integration] where everyone is turning over rocks and looking for opportunities."

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