Becker's Hospital Review

24 EXECUTIVE BRIEFING EXECUTIVE BRIEFING 1 High-reliability supply chains: 6 qualities that help drive fi nancial + patient care improvements H ealthcare organizations have faced unprecedented pressures in the last decade. Shifting consumer preferences, changing reimbursement models and supply chain disruptions have all become the norm. In addition, health system leaders routinely struggle with escalating costs, as well as eroding margins. In the face of these challenges, leading healthcare organizations are turning to high-reliability supply chains to improve downstream clinical workfl ows and deliver better patient care. To learn more, Becker's Healthcare recently spoke with Michael DeLuca, senior vice president of value realization at GHX. High-reliability supply chains foster fi nancial health GHX has found that organizations with high-reliability supply chains share six common characteristics: 1. They broaden the concept of spend under management, realizing savings by applying supply chain discipline to purchasing activities across every category of spend. "The strongest health systems operationally that we see have over 60% of their spend under management," Mr. DeLuca said. "That includes everything from clinical spend to pharma categories, services and all non-clinical spend. Non-clinical spend usually represents half of a system's spending." 2. They shape demand by driving preferred purchasing behaviors. This is accomplished by informing and empowering requesters to make the purchasing decisions against highly structured and compliant formularies. In many cases, health systems leverage technology to accomplish these goals. 3. They ensure rigid formulary control. This means enforcing compliance from the front end of the procurement process and orchestrating demand in response to disruptions. "When you shop as a consumer, the result set generally start out as broad," Mr. DeLuca said. "When you go to a marketplace in a business setting, however, you should generally see a focused set of results carefully curated, that when selected and procured achieve your organization's strategic sourcing goals." 4. They cultivate data integrity. Improving master data-management workstreams helps improve the accuracy and completeness of the data and help drive more effi cient downstream processes. This enables buyers to fi nd the right item and order it in the right unit of measure. It also helps ensure that the pertinent data is integrated to the ERP system and can be shared with clinical subsystems and EHRs for billing purposes. 5. They drive effi ciency with automation and clinical integrations such as the EHR or case scheduling system. Technology can play a central role in enabling the fl ow of data across the supply chain ecosystem. 6. They are data driven. Access to actionable information allows employees to achieve performance objectives. "In a data-driven supply chain, managers and leaders can look at an intelligent dashboard that is easy to use and shows metrics that are important to the health system," Mr. DeLuca said. "Taken together, these six priorities drive toward fi nancial compliance, especially in light of the headwinds that providers continue to face." Supply chain is a proven way to meet sustainability and diversity goals Many health systems today are pursuing organizational objectives related to regionally diverse spending, as well as environmental sustainability. "Health systems want to invest in the communities they serve by working with regional and local vendors and regionally diverse vendors," Mr. DeLuca said. "We are also seeing a drive toward sustainability. Item-spend percentages tied to spend classifi cation are going up, which drives the environmental, social and governance-related (ESG) metrics that many boards are now focused on." To attain ESG-related goals and objectives, healthcare organizations must ensure that hundreds and potentially thousands of users order from the right vendors and select products that contribute to positive environmental, social, and governance outcomes. "When the behavior of requesters is shaped to organizational objectives, both suppliers and providers benefi t, but they need assurance that the strategies they're invoking will be made operational," Mr. DeLuca said. High-reliability supply chain value extends to clinical workfl ows and patient outcomes GHX believes the business and patient-facing aspects of healthcare are inextricably linked, and supply chain is a central business function. Technology is a proven way to help bridge the business and clinical realms of an organization. "During the COVID-19 pandemic, health systems made great strides to source gloves and masks from secondary or tertiary sources, but they also needed a way to prevent hoarding of supplies in their own organizations," Mr. DeLuca said. "We helped organizations leverage technology so users could only order a certain quantity of masks, for example. In this way, they were able to rationalize limited supplies." When it comes to ordering products, the best time to inform users about recalls, substitutions or back orders is at the point of demand. "It's not enough to identify a viable substitute — you have to tell someone at the point of demand that they can't order their fi rst- choice item," Mr. DeLuca said. "We utilize technology to populate GHX Marketplace with items and information from supply chain source of truth systems."

• Cover