As health systems participate in more value-based payment models, what is the role of supply chain executives? According to Teresa Dail, R.N., chief supply chain officer at Vanderbilt University Medical Center (VUMC), it is crucial that supply chain becomes more clinically integrated and that decisions about purchasing and deployment are evidence-based, equitable and patient-focused.
Dail oversees VUMC’s $1 billion supply chain, which includes everything from value analysis (VUMC’s Medical Economic Outcomes Committee process), contracting, procurement and accounts payable to the logistics of receiving and inventory and equipment management.
In 2018, the Association for Healthcare Resource and Materials Management (AHRMM) began promoting the concept of Clinically Integrated Supply Chain (CISC) as an interdisciplinary approach to deliver patient care with the highest value. In a Feb. 18 webinar put on by the American Hospital Association Physician Alliance, Dail, AHRMM’s immediate past board chair, detailed how CISC has been implemented at Vanderbilt and how it has helped to align executives, clinicians and the supply chain team with value-based payment models.
A leader in the healthcare supply chain world, in 2014 Dail helped established the Vanderbilt Supply Chain Collaborative and Supply Chain Consulting, which offers volume aggregation, new service model creation and sharing of ideas with approximately 50 hospitals and multiple non-acute care facilities nationwide. The 1,000-bed VUMC gets better pricing on everything from spine implants to pharmaceuticals — and saves about $4 million to $5 million annually as a result — because of its leadership of and participation in the collaborative.
She said that executives traditionally think of supply chain as focused inside the four walls of the hospital, but care trends are changing and supply chain executives need to be involved in other decisions. For instance, during mergers and acquisitions, it is important to merge clinical needs with supply chain processes. When considering interoperability of medical devices, health systems need to get the right language into contracts. “We need to be thinking about where to impact cost drivers across the continuum of care,” Dail explained. More care is being provided beyond visits to the emergency department or a hospital admission.
At Vanderbilt, teams of clinicians and supply chain execs come together to study data and look at how closely clinicians are sticking to agreed-upon contracts with vendors about which supplies will be used. Even though Vanderbilt has strong processes in place, Dail admitted that it has been a struggle at times to get leaders to take ownership. She said supply chain executives can share this data but can’t manage changes in process at the physician and clinician level.
“Vanderbilt does a fantastic job of contract compliance, but there are areas where we have leakage,” she said. Dail showed an example where they had a commitment with a vendor to use its mesh product for 90 percent of particular procedures but actually it is only used in 50 percent and clinicians are using another vendor’s product at a higher price for the other 50 percent. Supply chain can take this information to Medical Economic Outcomes Committee directors to study the deviation and determine if it is an area they need to work on.
Vanderbilt uses analytics to compare its own spending quarter to quarter but they also can see side-by-side comparisons to peer organizations to inform internal conversations about things like a lack of standardization appropriate for a certain case mix or procedure.
Supply chain executives can remind financial and clinical executives that savings achieved through volume contracting get re-invested into the organization. “Also, if there are savings we can tie to waste, we have a fiduciary responsibility to drive that value,” she said.
Beyond looking at cost, VUMC now has the capability to pull together quality data and cost drivers to look at the patient population across that spectrum. This shows how they are performing against a cohort of peers, not just on cost but also on length of stay, complication rates and readmissions. “Previously we had to do this manually using cost tools and having colleagues in quality pull out the same case types and give us metrics,” she said. “We see this combination as a game changer.”
With its eye on the quadruple aim, VUMC has created a startup for-profit subsidiary called Carefluent Connect to support the durable medical equipment and home medical equipment needs of patients as they transition from VUMC care into the home. Additional service offerings include patient transportation and nutritional needs. The company will either contract out for those services or provide them itself. “We believe we are going to be able to impact outcomes,” Dail said, “by taking a focused, managed approach to how services are provided outside the four walls of the hospital.”
