Hartford (Conn.) HealthCare, formed through a series of mergers and acquisitions, unites a diverse group of healthcare providers.
In the early stages of its formation, the health system's five acute care hospitals all functioned using their own enterprise resource planning and clinical information systems, while other providers, such as physician groups, used smaller systems or manual processes with limited technology platforms for supply chain functions.
"As Hartford HealthCare continued to mature and build its network by acquiring additional entities, the need for one ERP system — and a single source of truth for financial and supply chain data — became critical to building a foundation for integrating these new facilities into one common platform efficiently," according to Christopher O'Connor, author of "The Healthcare Supply Chain: Best Practices for Operating at the Intersection of Cost, Quality, and Outcomes," and the book's expert contributors from the healthcare consulting firm Nexera and its sister group purchasing organization Acurity.
Hartford HealthCare's improvement efforts are detailed in a case study featured in the book. Each chapter includes best practices for achieving optimal performance in the central areas of supply chain operations, as well as additional areas closely tied to the supply chain in a value-based environment. Hospital supply chain professionals can determine where their supply chain department stands with the Hospital Supply Chain Performance Self-AssessmentTM, a free online tool that benchmarks current individual hospital supply chains' performance against the areas covered in the book.
Here is an excerpt of Hartford HealthCare's case study in the book.
Hartford HealthCare started with a clear set of strategic goals:
- Have one ERP system for the entire health system that would serve as the source of truth for data and one supply chain team at the corporate level
- Use a single set of item descriptions systemwide, with one ERP item number for each item (one item master shared across the entire health system for all acute care entities)
- Implement systemwide business processes to support data management
- Align the procure-to-pay process across all Hartford HealthCare entities
- Improve automation and efficiencies for the end users
- Align procurement data with health records to support a clinically integrated approach to improving quality and reducing costs
Methodology
Hartford HealthCare selected one ERP system to provide overall support for its facilities. It created a project team, including functional team leads, project management, change management and training to ensure successful implementation in each institution and facilitate each go-live. A new cross-functional content management team comprising members from supply chain and finance was developed to maintain key data elements to support new business processes. Hartford HealthCare standardized policies, procedures and business process workflows.
Improvements to the new ERP system included the following:
- Partnering with suppliers for direct connection functionality to expand the item master without having to build and maintain the items
- Dramatically improving the number of electronic data interchange transactions for purchase orders and invoices
- Real-time interface with clinical charging system
- Subscribing to modules for item cleansing and purchasing contract price management software to interface with the ERP system
- Establishing an ERP governance structure to monitor requests for ERP upgrades or enhancements
- Creating a standard process for onboarding new departments or entities — everyone follows the same model
Results
In 2015, Hartford HealthCare adopted a standardized procurement system at three acute care facilities, with all Hartford HealthCare entities scheduled to be on board by early 2018. One ERP system now supports the procure-to-pay business process, with flexibility to get additional entities on board using a consistent, coordinated approach. Hartford HealthCare moved from multiple acute care item masters to a single source of truth, which has further contributed to standardizing supplies. The single ERP system has improved efficiency by reducing off-contract spending, which has led to cost savings.
Having the ERP system interface with its clinical system helps avoid discrepancies, further contributing to efficiency and smooth operation. Price negotiations and product recall support have been improved through the use of historical data. There is better communication and collaboration between system support departments, including accounts payable, purchasing, content management, finance, revenue cycle and information technology services. The ERP system provides shared data, robust reporting and analytic development. As Hartford HealthCare continues to build its operations using Lean principles (the system for creating more value using fewer resources), it will use this data to eliminate waste, increase capacity in its organization and further enhance its business processes so that they are more efficient and customer-focused.
How does your hospital perform on the cost-quality-outcomes spectrum? Take this Hospital Supply Chain Performance Self-Assessment to find out.