Becker's Hospital Review

68 Executive Briefing Sponsored by: I n the past, health system leaders were almost solely concerned with delivering clinical excellence to patients. Operating efficiency wasn't as essential to success as it is now — striking the right balance between clinical excellence and operating efficiency has become table stakes for today's health systems. To achieve this equilibrium, leaders are leveraging supply chain as a strategic asset. Becker's Hospital Review recently spoke with two executives from Cardinal Health: Robert Rajalingam, senior vice president of strategic accounts and enterprise marketing, and Michael Brown, vice president of managed services. The two spoke about their experiences working with leading U.S. healthcare systems and detailed how effective supply chain management can yield better clinical outcomes and more efficient hospital operations. Executive mandate: Balance clinical excellence and operational efficiency The healthcare organizations most successful in achieving both clinical excellence and operational efficiency have a clear vision and mandate from the CEO or other C-level leaders. "The health systems that find the right balance make sure the supply chain leader has a seat at the hospital CEO's executive table. The C-suite also encourages the supply chain and clinical teams to work together," said Mr. Rajalingam. Pharmacy is often one of the most underutilized resources to improve efficiencies and clinical programs. It must also be elevated to the executive team, so the pharmacy department's strategies and goals can be aligned with the strategic goals of the entire organization. "Traditionally, pharmacy has been relegated to the basement of the hospital and viewed as a utility. The pharmacy department now must be viewed as a strategic asset. It needs to be represented on the care team and the executive committee," Mr. Brown added. What holds supply chain standardization back? Supply chain standardization is a proven way to achieve operational efficiency and clinical excellence. Reducing variation lowers costs and contributes to higher levels of safety, especially around pharmacy. "Cardinal Health has intel based on deep relationships that confirms clinical standardization and supply costs are the two leading health-related cost-savings opportunities for health systems," explained Mr. Rajalingam. Healthcare systems are more successful at achieving those cost savings when they address important organizational and cultural issues, which can otherwise hold supply chain standardization back. Best practices to address these hurdles include: • Implementing the right reporting structure. Unless the organizational structure is aligned to the strategic objectives, teams will run into conflict. Ideally, supply chain and pharmacy leaders report to the CEO. • Cross-training supply chain and clinical leaders. Cardinal Health is seeing more healthcare supply chain leaders with clinical backgrounds. "This enables them to build credibility and bridge the inherent cultural and strategic differences between clinical and supply chain groups in hospitals," explained Mr. Rajalingam. It is also helpful when clinicians are cross-trained or exposed to supply chain issues. Understanding supply chain metrics helps them appreciate the tradeoffs between the clinical and operational environments. • Confronting the cultural shift. Historically, the clinical community has perceived supply chain leaders as opposing product choice and continually saying "no." Unless this perception changes, clinicians won't view supply chain as a partner. Supply chain leaders must walk in clinicians' shoes to understand why they want different products based on different patient criteria or situations. Once supply chain professionals understand that, they can negotiate contracts more effectively. When it comes to supply chain standardization, it is critical to get some early wins on the board. A recommended approach is to start with high-volume, high-spending categories that use multiple vendors. Standardizing through consolidation decreases variability and leads to better outcomes. Organizations also see savings. "Once you get wins on the board, it creates a flywheel of momentum. When both the operational and clinical sides see the benefit, you can go after more challenging projects and make more far-reaching changes," Mr. Rajalingam said. Pharmacist, meet your patient As health systems strive to balance clinical excellence and operational efficiency, the role of the pharmacy is also evolving. One trend is combo-staffing models where traditional pharmacy It's time to bridge clinical and operational excellence — Here's how to get there

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