Becker's Hospital Review

Executive Briefing: Managing the Non-Acute Care Supply Chain bers of the SNPHO, physicians have access to a value-added service platform and acute-care pricing on both medical/surgical and non-medical/surgical products and services. The benefit includes the ability to purchase products physician offices need at lower prices. "It takes some time between making a capital contribution to upstart the PHO and creating a clinically integrated organization," says Joshua Yedvab, vice president of network development for South Nassau Communities Hospital. "So we said, 'In an attempt to help offset the capital contributions being made, let's look to see where we can provide value-added relationships for our physician members.'" Topping the PHO's agenda was the implementation of a medical/surgical supply program with Henry Schein Medical. This was implemented to help meet the growing demands of physician practices tasked with the responsibility to reduce costs, expand services to their communities and operate more efficiently. The program is designed to deliver lower product costs, increase order-delivery-receiving efficiencies and offer one of the largest portfolios of value-added services to physician practices. By moving into a new purchasing tier through this relationship, SNPHO physicians expected a savings of 13 percent to 14 percent to their supply chain spend at the time. The program promotes the direct relationship between 100-percent participation with its distributor for medical surgical purchases and increased aggregate savings. Benefits to physician practices The medical/surgical supply program offers several benefits to physicians, beginning with contracting expertise to maximize access to acute-care contracts and to provide consistent pricing across all SNPHO practices. The program also offers a sole supply source for SNPHO members to maximize and standardize purchasing volumes to lower the cost of contract items. "Customized reporting to each SNPHO member is of utmost importance," says Alyssa Correale, MHA, PMP, project coordinator with South Nassau Communities Hospital. "The program reports items by spend and quantity, is designed to show contract/noncontract items, and also allows practices to review their history of procurement practices and price levels." An online inventory management system offered through the program also delivers resources for practices that have traditionally had minimal resources to manage their supply chain, says Ms. Correale. Physicians are connected to an online management ca- 45 pability that lets them see their purchases, manage their budgets, streamline the accounts payable process and develop accountability and oversight. Along the way, Henry Schein also delivers training and consultative guidance for all supply chain managers. Many independent physician practices do not have access to supply chain management resources. "It is not uncommon for supply chain leaders not to have current access to their practice spend because of the recent wave of physician acquisition and lack of retained reporting at the practice level," says Mr. Barr. A collaborative relationship between the PHO, distributor, GPO and manufacturers has significant implications for physician practices' resources, largely their time. "While supply spending for physician practices is typically less than hospital spend, the time spent managing the physician practices can be significant," says Mr. Verhulst. This may not be captured on the invoice; however, it can be very taxing on supply chain's resources. The GPO-distributor relationship can not only provide access to more management tools, but can also reinforce the business side of physician practices. "The overall expenses to run a physician practice are a little different from those of a hospital, but pretty close in terms of order," says Mr. Yedvab. "A physician practice's highest expense is labor and salaries. After that, expenses fall into the category of their facilities, then billing expenses and then supply expenses. We're trying to address opportunities for them to learn and adopt best practices, and we're also trying to help our practices get more business acumen and leverage our expertise in expense management." Conclusion When searching for a supply chain partner, it's important that hospitals, health networks and health systems can rely on a company to ease supply chain complexity in alternate care settings rather than add to it. Some providers have been very proactive in pursuing supply chain programs with a GPO and distributor specific to their non-acute sites of care. But for others, time and resources remain scarce, and they may be watching their supply chain grow in geography, spend and variability. "Some integrated delivery networks have struggled to get these programs in place, possibly because of the timing of their practice acquisitions or they don't have the resources to dedicate to the coordination of this project," says Mr. Barr. "The thing to remember here is that leveraging experts in distribution, in addition to the GPO, should support the coordination, management and reporting on health systems' expansion and reduce issues during implementation." n Henry Schein Medical is a Fortune 500 company with 80+ years of experience serving health care practitioners. Henry Schein distributes medical/surgical supplies, equipment, diagnostics, and pharmaceutical products to the non-acute care continuum, including over 120,000 physicians annually. Henry Schein works with all major GPOs to drive cost effective supply purchasing programs. Beyond supplies, Henry Schein provides physicians access to practice solutions that include financing/leasing, inventory management tools, equipment repair, and practice marketing. A focus on superior service results in Henry Schein's consistent lead ranking in customer service. For more information, visit www.henryschein.com/whyrelyonus.

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