JHC Aug 19

Providing Insight, Understanding and Community

August 2019 | Vol.15 No.4

Ten People to Watch in Healthcare Contracting

Sparkle Barnes, CNECT

Lowering total cost of ownership together.

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CONTENTS »» AUGUST 2019 The Journal of Healthcare Contracting is published bi-monthly

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Ten People to Watch

Editorial Staff Editor Mark Thill mthill@sharemovingmedia.com Managing Editor Graham Garrison ggarrison@sharemovingmedia.com Art Director Brent Cashman bcashman@sharemovingmedia.com

in Healthcare Contracting

Publisher John Pritchard jpritchard@sharemovingmedia.com Director of Business Development Alicia O’Donnell aodonnell@sharemovingmedia.com Vice President of Sales Katie Educate keducate@sharemovingmedia.com Sales Executive Lizette Anthonijs Lizette@sharemovingmedia.com Circulation Wai Bun Cheung wcheung@sharemovingmedia.com

The Journal of Healthcare Contracting (ISSN 1548-4165) is published monthly by Share Moving Media, 1735 N. Brown Rd. Ste. 140, Lawrenceville, GA 30043-8153. Copyright 2019 by Share Moving Media. All rights reserved. Subscriptions: $48 per year. If you would like to subscribe or notify us of address changes, please contact us at the above numbers or address.

Sparkle Barnes, CNECT

2 Publisher’s Letter

48 Interoperability: Are we there yet?

4 You and Artificial Intelligence

54 What will Ken Freeman think up next?

42 GPOs: Critical cost-savings engines

57 Calendar

44 When Staying in Your Lane is not the Solution

58 Contracting News & Notes

The Grey Market: Keeping a watchful eye

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Publisher cannot accept responsibility for the correctness of an opinion expressed by contributing authors.

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Medical devices are getting smarter.

Contracting executives will have to do the same.

The Journal of Healthcare Contracting | August 2019

It’s not that simple.

Forty-seven years into his career, he is still listening, learning and creating.

60 Observation Deck Points of View

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PUBLISHER’S LETTER

John Pritchard

The Grey Market: Keeping a watchful eye In the June 2019 issue of The Journal of Healthcare Contracting, I read with great interest the article “The Grey market: Financial issue. Patient safety issue”. The article details how one large supplier, BD, has proactively tried to manage the grey market to maintain financial integrity, as well as patient safety.

What is the grey market?

Diverted products can enter the grey market from both inside and outside the U.S. “For example, a U.S. manufacturer sells its product to a supplier outside the U.S. for the sole purpose of servicing a different country or region (e.g. Latin America),” details Jim Berdela, channel development and marketing vice president, BD. “The product is sold to this supplier, but after the sale, all or much of it is fraudulently diverted from the region, unbeknownst to the manufacturer, and re-sold back into the U.S.” The desire for the lowest-price option on the part of purchasers fuels the secondary market, contends Richard Bergner, chief operating officer, Integritet Global Consulting & Investigations in Miami, Florida. Manufacturers inadvertently fuel the problem with varying global cost structures to penetrate emerging markets and improve healthcare for patients globally. “Savvy traders exploit these opportunities, which means products intended for a particular market never make it to those patients.”

While diversion can lead to financial implications to the supplier, what really worries me is the safety implications that come along with this shadowy secondary market. Many experts believe that this secondary market opens the door to expired, stolen and counterfeit products.

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Bergner continues “This channel can lead to improperly handled, misbranded, or counterfeit products being sold to healthcare providers, putting patients at risk.”

I’m worried we will start to see more cases of injured patients due to the grey market, and I’m greatly concerned this has yet to hit many Supply Chain Leaders’ radar. Bergner gives some great advice on how we can slow the flow of products on this secondary market: • Requiring proof of performance beyond simple assurances that the products went where they were supposed to go.

• Conducting formal or informal market surveys or reviews. These can be done by company personnel or third parties.

• Developing and maintaining a program to address and confront grey market activity and build it into day-to-day business.

• Educating internal and external partners on the risks of the grey market and this illicit supply chain.

• Partnering with suppliers and listening to what they are seeing out there, and then reacting to it.

I’d love to hear your thoughts on the grey market. Thanks for reading this issue of The Journal of Healthcare Contracting.

August 2019 | The Journal of Healthcare Contracting

EXECUTIVE INTERVIEW

Zach Rothstein

You and Artificial Intelligence Medical devices are getting smarter. Contracting executives will have to do the same.

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In May the FDA granted marketing clearance to a device called eMurmur ID, by Ottawa, Canada-based eMurmur®. The device is mobile- and web-based, and it operates in conjunction with an electronic stethoscope. It uses advanced machine learning to identify and classify pathologic and innocent heart murmurs, the absence of a heart murmur, and S1, S2 heart sounds, according to the developer.

Bottom line: It uses its algorithm – which was developed based on realworld observations – to help providers identify innocent and pathological heart murmurs, or the absence of a heart murmur, in seconds.

That’s the kind of technology which supply chain will be contracting for in the future.

Medical devices are getting smarter. In other words, devices and equipment that incorporate artificial intelligence, or AI, can actually “learn” over time. And as they do so, they can help clinicians make better diagnoses and therapeutic plans.

That fact raises all kinds of issues for supply chain executives – among others. For example, how do you know the AI-based technology is “smart,” a “good learner?” How do you contract for such a technology? How do you pay for it?

The U.S. Food and Drug Administration is grappling with some AIrelated issues as well. For example, as an AI-based device takes in more information and offers new insights to clinicians, should it be considered a “new” device? Should it go through FDA’s marketing clearance procedures every time it learns something new? And how can the healthcare community trust

August 2019 | The Journal of Healthcare Contracting

Get to know these terms

“Locked” algorithms. Algorithms that don’t continually adapt or learn every time they are used.

Algorithm Change Protocol, or “Predetermined Change Control Plan.” Proposed plan by FDA that would include the types of anticipated modifications – referred to as the “Software as a Medical Device Pre-Specifications” – being used to implement changes in a controlled manner that manages risks to patients. In this approach, the FDA would expect a commitment from manufacturers on transparency and real-world performance monitoring for artificial intelligence and machine learning-based software as a medical device, as well as periodic updates to the FDA on what changes were implemented as part of the approved pre-specifications and the algorithm change protocol.

“Adaptive” or “continuously learning” algorithms.

Machine-learning algorithms that can learn from new user data presented through real-world use.

They don’t need manual modification to incorporate learning or updates. For example, an algorithm that detects breast cancer lesions on mammograms could learn to improve the confidence with which it identifies lesions as cancerous or may learn to identify specific subtypes of breast cancer by continually learning from real-world use and feedback.

Software as a Medical Device. Software intended to be used for one or more medical purposes that are not part of a hardware medical device. It can be used across a broad range of technology platforms, including medical device platforms, commercial “offthe-shelf” platforms, and virtual networks, to name a few. Such software was previously referred to by industry, international regulators, and health care providers as “standalone software,” “medical device software,” and/or “health software.”

Artificial Intelligence. The science and engineering of making intelligent machines, especially intelligent computer programs. Artificial intelligence can use different techniques, including models based on statistical analysis of data, expert systems that primarily rely on if-then statements, and machine learning.

Machine Learning. An artificial intelligence technique that can be used to design and train software algorithms to learn from and act on data.

Source: U.S. Food and Drug Administration

that the device will make better choices or recommendations a year from now, or five years from now, than it does at its introduction?

Continuous learning The old rules of the road for medical device regulation – which have been around since the 1970s – don’t apply anymore, says Zach Rothstein, vice president, technology and regulatory affairs, AdvaMed.

The Journal of Healthcare Contracting | August 2019

“In terms of regulation, the most unique aspect of AI, or machine learning, is that it can continuously learn,” he points out. “The inputs it receives in the field inform future outputs. The question is, ‘How do you truly allow for that continuous learning aspect of the device to occur?’”

Thus far, the FDA has handled the question by granting marketing clearance for AI-based products that are essentially “locked,” says Rothstein. Their algorithms are typically based on thousands of data points – which make them very smart indeed. But they haven’t been FDA-cleared to get any “smarter” in the field. In other words, they are prevented from continuously learning.

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EXECUTIVE INTERVIEW

FDA is trying to re-imagine its approach to AI-based devices by adopting a “change management protocol,” which would establish parameters that would allow devices to continuously learn in the field.

“Without that, things have to be locked,” says Rothstein. “If a developer wants to update the software of an AI device based on input received from the real world, the developer has to go back to the FDA for marketing clearance.”

FDA trying to catch up To catch up to AI technology, FDA is simultaneously exploring two paths: 1. Precertifying developers of AI-based devices.

2. Developing a framework for AI-based medical devices.

In July 2017, the agency launched its “Pre-cert pilot program” as part of its “Digital Health Innovation Action Plan.” The gist is to look at the software developer or digital health technology developer, rather than primarily at the product. After reviewing systems for software design, validation and maintenance, FDA would determine whether the company meets quality standards and if so, would precertify the company.

FDA is trying to re-imagine its approach to AI-based devices by adopting a ‘change management protocol,’ which would establish parameters that would allow devices to continuously learn in the field.

The agency compares it to the Transportation Security Administration’s Precheck program, which screens travelers and awards them with a “Known Traveler Number,” speeding up their airport security checks.

With the information gleaned through the pilot program, the agency hopes to determine the key metrics and performance indicators for precertification and identify ways that precertified companies could potentially submit less information to the FDA than is currently required before marketing a new digital health tool. The FDA is also

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considering – as part of the pilot program – whether and how precertified companies may not have to submit a product for premarket review in some cases.

In September 2017, the agency announced the names of the companies selected to participate in the pilot program The agency’s intention was to include a wide range of companies and technology in the digital health sector, including small startups and large companies, highand low-risk medical device software products, medical product manufacturers and software developers. Participants selected include: • Apple, Cupertino, California.

• Fitbit, San Francisco, California.

• Johnson & Johnson, New Brunswick, New Jersey.

• Pear Therapeutics, Boston, Massachusetts.

• Phosphorus, New York, New York.

• Roche, Basel, Switzerland.

• Samsung, Seoul, South Korea.

• Tidepool, Palo Alto, California.

• Verily, Mountain View, California.

As part of the Pre-cert pilot program, participants have agreed to provide access to measures they currently use to develop, test and maintain their software products, including ways they collect post-market data. Participants also agreed to be available for site visits from FDA staff, and provide information about their quality management system. This sharing will help the FDA continue to build its expertise in these areas, while giving the agency the information it needs to provide proper oversight of these products and firms.

A broader framework for AI devices In August 2019, then-FDA Commissioner Scott Gottlieb announced that FDA was exploring a framework that would allow for modifications to algorithms to be made from real-world learning and adaptation.

August 2019 | The Journal of Healthcare Contracting

AI-based technologies on the market.

Examples of AI-based devices that have received FDA marketing clearance.

Heart murmur detection In May 2019, eMurmur®, Ottawa, Ontario, announced that its eMurmur ID received FDA clearance. The company says eMurmur ID is a mobile and cloud solution which operates in conjunction with an electronic stethoscope. It uses machine learning to identify and classify pathologic and innocent heart murmurs, the absence of a heart murmur, and S1, S2 heart sounds.

The solution is comprised of AI-based analytics, a mobile app, and a web portal (all HIPAA compliant). Evidence for the device is based on five studies involving more than 1,000 patients, according to the company.

Chest X-ray triage product In May 2019, Zebra Medical Vision, Tel Aviv, Israel, received marketing clearance from the U.S. Food and Drug Administration for its artificial intelligencebased chest X-ray triage product. The FDA approval focuses on an alert for urgent findings of pneumothorax, an accumulation of gas within the space between the lung and the chest wall that can lead to total lung collapse. It is usually diagnosed by chest X-ray scan but is difficult to interpret.

after being trained on a curated dataset of over 4 million images, representing 9,000 patients.

Detection of diabetic retinopathy In April 2018, the FDA permitted marketing of the IDx-DR, from IDx LLC, Coralville, Iowa, said to be the first device to use artificial intelligence to detect greater than a mild level of the eye disease diabetic retinopathy in adults who have diabetes. Diabetic retinopathy occurs when high levels of blood sugar lead to damage in the blood vessels of the retina, the lightsensitive tissue in the back of the eye. The IDx-DR is a software program that uses an artificial intelligence algorithm to analyze images of the eye taken with a retinal camera. A doctor uploads the digital images of the patient’s retinas to a cloud server on which IDxDR software is installed. If the images are of sufficient quality, the software provides the doctor with one of two results: (1) “more than mild diabetic retinopathy detected: refer to an eye care professional,” or (2) “negative for more than mild diabetic retinopathy; rescreen in 12 months.” The FDA evaluated data from a clinical study of retinal images obtained from 900 patients with diabetes at 10 primary care sites.

Detection of left ventricular EF In June 2018, San Francisco-based Bay Labs announced its EchoMD AutoEF software had received 510(k) clearance from the U.S. Food and Drug Administration for the fully automated clip selection and calculation of left ventricular ejection fraction (EF). EF is said to be the single most widely used metric of cardiac function and used as the basis for many clinical decisions. The EchoMD AutoEF algorithms are intended to eliminate the need to manually select views, choose the best clips, and manipulate them for quantification, said to be a time-consuming and highly variable process. The company says that its software algorithm “learned” clip selection and EF calculation

The Journal of Healthcare Contracting | August 2019

Potential stroke warning In February 2018, the FDA permitted marketing of the Viz.AI Stroke Platform from San Francisco-based Viz.ai, Inc. A stroke occurs if the flow of oxygen-rich blood to a portion of the brain is blocked. When this happens 2 million brain cells die every minute. The Viz.AI Contact application (part of the Stroke Platform) is designed to analyze CT images of the brain and send a text notification to the mobile device of a neurovascular specialist if a suspected large vessel blockage, or occlusion, has been identified. The device could benefit patients by notifying a specialist earlier, thereby decreasing the time to treatment.

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EXECUTIVE INTERVIEW

What if AI makes a mistake?

The premise behind artificial-intelligence-based devices is that they can “learn” over time. In other words, based on real-world inputs and experience, they can make better diagnoses and better care recommendations as time goes by.

But what if those recommendations result in harm to a patient? What if the diagnosis is wrong?

Who’s to blame?

Not physicians, says the American Medical Association.

In their recent annual meeting in June, delegates to the AMA endorsed some policy recommenda-

“For traditional software as a medical device, when modifications are made that could significantly affect the safety or effectiveness of the device, a sponsor must make a submission demonstrating the safety and effectiveness of the modifications,” Gottlieb wrote at the time. “With artificial intelligence, because the device evolves based on what it learns while it’s in real world use, we’re working to develop an appropriate framework that allows the software to evolve in ways to improve its performance while ensuring that changes meet our gold standard for safety and effectiveness throughout the product’s lifecycle – from premarket design throughout the device’s use on the market.”

For example, an algorithm that detects breast cancer lesions on mammograms could learn to improve the confidence with which it identifies lesions as cancerous or may learn to identify specific subtypes of breast cancer by continually learning from real-world use and feedback, Gottlieb pointed out. “Our ideas are the foundational first step to developing a total

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tions regarding AI. Among those recommendations is the following: “Liability and incentives aligned so the individual or entity best positioned to know the AI system risks and best positioned to avert or mitigate harm do so through design, development, validation, and implementation. When a mandate exists to use AI, the individual or entity issuing the mandate must be assigned all applicable liability. Developers of autonomous AI systems with clinical applications (screening, diagnosis, treatment) are in the best position to manage issues of liability arising directly from system failure or misdiagnosis and must accept this liability.”

product lifecycle approach to regulating these algorithms that use realworld data to adapt and improve.”

What’s ahead?

FDA is probably a few years away from figuring all this out, says Rothstein. Congressional legislation may be required for some of the changes being considered. “From most people’s perspective, these proposals are outside the bounds of the Federal Food, Drug, and Cosmetic Act,” says Rothstein. For that reason, Congressional legislation may be required. Still, next year may be a pivotal one, as FDA prepares to present concrete proposals for Congress to consider.

“This will certainly delay the deployment of certain technologies,” says Rothstein. “But FDA is doing its best to expedite the process.

Long-term, I don’t think it will significantly impact the advancement of AI technology. Any developer that’s serious about getting into this space will do so.”

Supply chain executives might be in a position to help.

“A lot of these companies are small, and they’re trying to figure out how to get into the market,” says Rothstein. “They may be sophisticated at developing software, but many are new to the healthcare market.” By interacting with such companies, supply chain executives might be able to help them understand what the market needs.

“A village approach might be the way to go.”

August 2019 | The Journal of Healthcare Contracting

SPONSORED:

WELCH ALLYN

Vision loss

Can You Take the Long View?

Primary care doctors can do a lot to preserve the health of their patients with diabetes. Supply chain executives can give them the tools to do so.

Today, healthcare executives must take a “long view” of patient care – one that extends outside the hospital, into the community. The reason is, preventive care contributes to improved health and lower costs for individuals and providers alike.

Given supply chain’s growing responsibilities in non-acute sites of care, you have an opportunity to help your providers take that long view. A good place to start is diabetes management.

The Journal of Healthcare Contracting | August 2019

“Diabetes is an epidemic,”1 says Edward Chaum, M.D., Ph.D., Margy Ann and J. Donald M. Gass Chair Professor of Ophthalmology, Vanderbilt Eye Institute. Twenty-nine million Americans have it, with 1.7 million new cases per year.2 Absent good preventive care, it is estimated that 80 percent of patients living with diabetes will eventually develop diabetic retinopathy,3 or DR. The retina detects light and converts it to signals sent through the optic nerve to the brain. Chronically high blood sugar from diabetes is associated with damage to the tiny blood vessels in the retina. Those blood vessels can leak fluid or hemorrhage, distorting vision. In its most advanced stage, new abnormal blood vessels proliferate on the surface of the retina, which can lead to scarring and cell loss in the retina. Severe visual impairment and blindness can result.

To prevent DR from progressing to that point, primary care physicians typically refer patients with diabetes to an eye care specialist for an annual retinal exam. But, half of those patients fail to follow through with the specialist exam.4 They may not comprehend its importance. Geographic and socioeconomic challenges can also prevent patients from complying with referrals.

“Unfortunately, many cases of diabetic retinopathy are advanced by the time I see them,”1 says Chaum, who serves as consulting Chief Medical Officer for the Welch Allyn® RetinaVue® care delivery model.

Early detection in primary care is critical It doesn’t have to be that way. Ninetyfive percent of vision loss due to DR

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SPONSORED:

WELCH ALLYN

can be prevented with early detection.5 Patients can be successfully managed with close observation and good control of blood glucose, blood pressure and lipids.

And what better place to provide that detection than the primary care practice? A recent survey of 3,200 adults with diabetes showed that nearly 88 percent visited a primary care physician within 12 months.6 The Welch Allyn RetinaVue care delivery model is designed specifically for primary healthcare settings. It includes three main components: • Retinal cameras designed to obtain highquality retinal images in less than five minutes and do not require dilation.

• HIPAA-compliant, FDA-cleared, RetinaVue Network Software, which transmits encrypted retinal images to the preferred eye specialist or ophthalmologists and retina specialists at RetinaVue, P.C. Includes comprehensive population health management and quality reporting tools to effectively manage retinal exam data and integrates with all of the leading electronic medical records systems.

• Board-certified, state-licensed ophthalmologists and retina specialists who interpret retinal images and prepare a comprehensive diagnostic report and

referral/care plan generally in one business day. Alternatively, the referring providers can transmit the retinal images to the health system’s preferred eye specialist.

As of this month, Welch Allyn is excited to announce the launch of the all new Welch Allyn RetinaVue® 700 Imager from Hillrom, the world’s most advanced handheld retinal camera. Developed from the ground up with data security in mind, and part of a HIPAA-compliant solution to help ensure patient’s health information is protected.

The Welch Allyn RetinaVue 700 Imager is the first and only automated handheld camera, allowing clinicians to capture high-quality images right out of the box, without dedicated training.

Clinicians can conduct fast, comfortable exams using the RetinaVue 700 Imager’s 2.5mm small-pupil capability.

For the first time, a full 60-degree wide field of view, up to 75% larger capture area than other leading cameras, helps clinicians see more pathology in a single image.

An economic story to tell Most commercial healthcare plans provide coverage for diabetic retinal exams in primary care settings using CPT® Code 92250, and many healthcare providers enjoy a favorable return on investment within their first year.

From a quality-of-care standpoint, the RetinaVue care delivery model can help providers achieve up to 90% documented compliance in 12 months,7 potentially qualifying for financial incentives under such programs as the NCQA® HEDIS® quality program and Medicare Advantage Star Ratings.

Acquaint your primary care physicians with the RetinaVue care delivery model. Help your health system achieve that long view of healthcare for which the entire industry is striving today.

To learn more about the RetinaVue care delivery model, please visit www.retinavue.com.

References:

1. W elch Allyn. Early Detection of Diabetic Retinopathy in Primary Care Settings. 2019. Accessed June 21, 2019.

2. C enters for Disease Control and Prevention. National Diabetes Statistics Report: Estimates of Diabetes and Its Burden in the United States, 2014. Atlanta, GA: U.S. Department of Health and Human Services; 2014. Available at: https://www.cdc.gov/diabetes. Accessed May 30, 2017 3. C DC Vision Health Initiative (VHI), Common Eye Disorders. www.cdc.gov/visionhealth/basics/ced/index.html. Accessed July 27, 2018.

4. S loan FA, Brown DS, Carlisle ES, Picone GA, Lee PP. Monitoring visual status: why patients do or do not comply with practice guidelines. Health Serv Res. 2004;39(5):1429–1448. doi: 10.1111/j.1475-6773.2004.00297.x Rajput Y, Fisher M, Gu T, et al. Patient and provider perspectives: why are patients with diabetes mellitus noncompliant with dilated eye exams? Invest Ophthalmol Vis Sci. June 2015;56:1440.

Lee DJ, Kumar N, Feuer WJ, et al. Dilated eye examination screening guideline compliance among patients with diabetes without a diabetic retinopathy diagnosis: the role of geographic access. BMJ Open Diabetes Res Care. 2014;2(1):e000031. doi:10.1136/bmjdrc-2014-00031 Rawi S, Wendling M. Improving population health via a quality measurement analysis: diabetic eye exam. Poster presented at: The Prolog II Presentation Day; July 16, 2015; University of South Florida, Tampa, Fla 5. N ational Eye Institute. Facts About Diabetic Eye Disease. Available at: https://nei.nih.gov/health/diabetic/retinopathy. Accessed May 30, 2017.

6. G ibson, D. Estimates of the percentage of US adults with diabetes who could be screened for diabetic retinopathy in primary care settings. JAMA Ophthalmol. 2019; 137(4):440-4.

7. M ansberger SL, Gleitsmann K, Gardiner S, et al. Comparing the effectiveness of telemedicine and traditional surveillance in providing diabetic retinopathy examinations: a randomized controlled trial. Telemed J E Health. 2013 Dec; 19(12):942-8.

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August 2019 | The Journal of Healthcare Contracting

WELCH WELCH ALLYN ALLYN AND AND HILLROM HILLROM We’re We’re unifying unifying our our brands brands to to advance advance connected connected care. care.

JOIN OUR NEXT STEP FORWARD JOIN OUR NEXT STEP FORWARD AT WWW.HILLROM.COM. AT WWW.HILLROM.COM. © 2019 Hill-Rom Services, Inc. © 2019 Hill-Rom Services, Inc.

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Sparkle Barnes, CNECT

Ten People to Watch

Michael Gray, SSM Health

Ed Hisscock, Trinity Health

Anand Joshi, NY-Presbyterian Hospital

Fred Keller, HealthTrust

Todd Larkin, Intalere

Herman Lovato, Centura Health

John Thompson, Vizient

Adrian Wengert, St. Luke’s Health System

in Healthcare Contracting

Editor’s note: Thanks to all those who made the effort to nominate this year’s “Ten People.” And thanks to the Ten, who share their insights and experience with The Journal of Healthcare Contracting readers this month.

Joel Prah, Mercyhealth

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August 2019 | The Journal of Healthcare Contracting

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TEN PEOPLE TO WATCH

Sparkle Barnes Executive Vice President, CNECT Chief Strategy Officer, Health Center Partners of Southern California San Diego, California

About Sparkle Barnes: As executive vice president of CNECT, Sparkle Barnes serves as the principal leader and strategic driver of the national group purchasing organization (GPO). She is responsible for developing and executing long-term strategies, annual business initiatives, and regionally deployed tactics. In January 2016, she was selected for the role of chief strategy officer, an enterprise-wide position with Health Center Partners of Southern California. In this role for Health Center Partners and its Family of Companies, she balances strategy formulation and execution to create sustaining innovations that support member organizations and the 800,000+ patients they serve across 135 sites of care.

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Barnes started her work in healthcare in 2002 in sales and member services with CNECT (then Council Connections), providing supply chain solutions for members. She returned to school and received a master’s degree in human relations, then performed casework for the Navy-Marine Corps Relief Society, which provides assistance and financial/budgeting information to sailors and Marines who face financial difficulties. (She still volunteers and teaches classes for the Relief Society.)

Before her return to CNECT in 2010, Barnes worked for the Department of the Navy in Public-Private Ventures, overseeing the performance of private management

August 2019 | The Journal of Healthcare Contracting

companies that are selected to construct, renovate, operate and professionally manage housing for military service members and their families.

About CNECT and Health Center Partners: Affiliated with Premier, Inc, CNECT offers contracts covering all aspects of purchasing, from large construction projects to IT equipment and cyber security services, telecommunications and cellular services, pharmaceuticals and vaccines, reference laboratory services, med/surg supplies to office furniture, and more. CNECT is a wholly owned subsidiary of Health Center Partners of Southern California, a 501(c)(3) consortium of primary healthcare organizations and an advocate for its members, who serve the fundamental health needs of patients in communities across southern California.

Most challenging/rewarding project in the past 12-18 months: “Positioning our GPO to serve our members in a valuebased reimbursement (VBR) environment. As providers increase their contracts in risk-based arrangements and take responsibility for population health and patient care occurring outside of their own four walls, CNECT has aligned itself with supplier partners that can meet the needs of our members in a VBR model.”

In addition to supporting the GPO members, Barnes assisted Health Center Partners in the establishment of a clinically integrated network – Integrated Health Partners of Southern California – in June 2015, which is designed to help its community health center members be successful in a value based model by managing population health, improving efficiencies and performances in managed care and care transitions, integrating data and improving clinical performance, and providing high-quality care to lower income and uninsured patients.

How are you better at practicing your profession than you were 5-10 years ago?

“Taking on an enterprise-wide role as chief strategy officer for the Family of Companies was transformational in how I lead CNECT. In the CSO role, I am on the front lines of policy, operational, and clinical decision support discussions in transitioning a care model from a fee-for-service environment to value-based reimbursement, enabling me to bring a perspective and experience from the front-line into CNECT to better position our members.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“The transition to value-based care is not slowing down. If anything, it is accelerating. The future generation of supply chain professionals will need to be both experts in their fields and partners with their management teams as those organizations are more and more challenged to improve care quality and [achieve] cost reductions through valuebased reimbursement models.

“ The transition to value-based care is not slowing down.

If anything, it is accelerating.”

Looking forward to: CNECT is completing the second year of a three-year strategic plan that will position the organization to serve an estimated doubling of its membership to more than 10,000 organizations by June 30, 2020.

The Journal of Healthcare Contracting | August 2019

“There is a real opportunity for supply chain professionals to partner with their GPO and become a part of the process. Sit on committees, engage in the available tools and resources, and bring this market intelligence, market awareness to their teams to use the information in managerial decision making.

“Systems are accelerating consolidations, budgets are getting tighter, keeping a check on costs is what makes the margin. Partnering with a GPO will become that much more imperative to leverage the market intelligence and keep abreast of industry standards and advancements in care. There is real power in coming together. The collective can produce data driven insights that cross market segments and create disruptions that improve supply chain efficiencies and quality outcomes.”

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TEN PEOPLE TO WATCH

Fred Keller Vice president, HCA Contracting HealthTrust Nashville, Tennessee

About Fred Keller: Born and raised in Texas, Fred Keller has over 25 years of experience in the healthcare industry in operations and contracting. In his current position, he helps manage over $8 billion in expense spend annually for HCA Healthcare, and he leads the corporate and division contracting teams that develop solutions for HCA’s cost management initiatives.

He began his healthcare career at a facility in Houston in 1994. “I needed a job,” he says. “But within six or seven months, I realized ‘There’s a lot to do here.’

I felt it was something I could spend a career doing.”

He joined HCA in 1996. “Supply chain touches all as-

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pects of a provider’s business, and being able to impact and stay engaged across a hospital’s enterprise has been thoroughly rewarding. We have the opportunity to be a part of bettering lives…and HCA Healthcare has always welcomed supply chain taking an active part in that mission.”

Keller received his bachelor’s degree from the University of Colorado in Boulder.

About HCA Healthcare: HCA Healthcare, Inc. owns and operates 185 hospitals and approximately 230 ambulatory or alternatecare sites.

August 2019 | The Journal of Healthcare Contracting

Most challenging/rewarding project in the past 12-18 months:

What are the challenges or opportunities facing the next generation of supply chain executives?

“Our collaboration with our cardiovascular service line has been an exceptional experience. Being included as a contributing leader to not only our cost and supply initiatives, but to a holistic business strategy including growth, service development, clinical performance and resource balance … I have learned so much and received such valuable insight.”

“Supply chain in healthcare has come a long way over the last 20 years, and no other industry has the dynamics, politics, or personal impact in affecting lives as much as medical care. We need it and depend on it from birth, through life and up until death. Professionals who will be responsible for moving this forward in supply chain will have to be a part of solving for systemic change, culturally and socially. Supply chain solutions will need to be new and unique. To get there, we will have to learn a great deal from other industries and we will have to learn about

Looking forward to: “Providing more technology insight to our operations teams as well as our payer and regulatory experts. There is a great deal to know and understand as things evolve. How will delivering care change? What new services will we need to provide? What new technology, products, equipment, etc., will create not only opportunities, but challenges?

“We are trying to help various teams within HCA be on the front end of learning about new products and how they may change the standard of care. We want to look at the pipeline so we know when these technologies are going to be commercially available, instead of learning about them eight months after the fact. We can structure better contracts when we learn about technologies ahead of time and gain an idea of how the government is likely to manage them from a reimbursement or indication perspective. All constituents – payers, providers, patients, physicians – benefit by being thoughtful instead of reactive, and by taking the time to understand where new technology really fits.”

“ Our teams manage contracting as a byproduct of managing larger relationships with our constituents and suppliers.”

How are you better at practicing your profession today than you were 5-10 years ago?

“I listen more. I trust more. But I expect more. I have made every day more about thinking and solving and surrounding myself with people who are better than me. It has also been more about helping younger and newer leaders in this profession experience things in a controlled manner, so they can learn and gain confidence in the capabilities they will need in the future.”

The Journal of Healthcare Contracting | August 2019

technologies that can support our efforts. Ultimately, we will have to be able to strategically solve questions with new answers that include things we have never thought of or done before.

“Our teams manage contracting as a byproduct of managing larger relationships with our constituents and suppliers. Contracting becomes a lot easier when you are engaged with the people making decisions about the service line and its future – as we were with cardiovascular.

I would tell a young person to find time to have a dialogue with the people who are influencing a service line.

It makes your task – contracting – easier, because it raises the value of your contracting expertise. You are seen as being more intimately invested – and influential – in what they’re doing.”

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TEN PEOPLE TO WATCH

Michael Gray System vice president and chief supply chain officer SSM Health St. Louis, Missouri

About Michael Gray: Mike Gray was raised on a small farm in north central Illinois, not far from Toulon. He taught high school students in agriculture and business, and began his healthcare supply chain career in 1989 as a distribution manager for General Medical (now McKesson Medical-Surgical) in Green Bay, Wisconsin. He served for seven years as president and CEO of Mercy Resource Management Inc., a cooperative with responsibilities for supply chain service solutions, among other duties, for 112 hospitals and related facilities. After that, he was chief operating officer of The Resource Group within Ascension, with responsibility for the development, implementation, and

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management of its strategic direction and User-Directed Strategic Sourcing Model. After running his own consulting firm, he joined SSM Health in February 2018.

He received his bachelor’s degree from Western Illinois University and his master’s degree from the University of Illinois.

About SSM Health: With care delivery sites in Illinois, Missouri, Oklahoma and Wisconsin, SSM Health includes 23 hospitals, more than 290 physician offices and other outpatient and virtual care services, 10 post-acute facilities, comprehensive home care and hospice services, a pharmacy benefit

August 2019 | The Journal of Healthcare Contracting

The non-acute continuum is complicated.

We’ve got your roadmap.

Did you know 34% of health system leaders say that aligning their non-acute supply chain is their biggest challenge?* Supply chain leaders are challenged with balancing the many needs of their non-acute facilities — from surgery centers to doctors’ offices to long-term care facilities and even to patients’ homes. McKesson can help you implement comprehensive strategies that drive out costs and provide better care across the non-acute continuum.

McKesson.com/TakeControl Medical-Surgical. Pharmaceutical. Lab. Equipment. © 2019 McKesson Medical-Surgical Inc. All rights reserved. *HIDA Hospital And Health System Provider Survey, June 2018.

McKesson can help you take control of: • Operations • Analytics • Process Automation • • • • • • •

Supply Cost Management Visibility Standardization Post-Acute Care Laboratory Pharmaceuticals Leading Change

TEN PEOPLE TO WATCH company, a health insurance company and an accountable care organization

Most challenging/rewarding project since joining SSM Health: • Consolidated the master data management teams and non-pharma buyers under one management structure. “It has allowed us to be consistent and to provide comprehensive quality data into the Enterprise Resource Planning and Electronic Health Records systems,” he says.

• From a contracting perspective, has engaged physician and clinician leaders from across the health system to eliminate unnecessary variation

eliminating 124,000 duplicate items. SSM Health had been operating as three different geographies from when SAP was first deployed, says Gray.

•C leansed the SAP item file to include more nursefriendly item descriptions, which updates the electronic health record with any applicable changes each evening.

• In the process of centralizing the data management and accuracy assurance of the physician preference cards across the organization.

Looking forward to: Continuing to work systemwide with physician leaders and others to reduce unnecessary variation in vendors, products, etc. “We should be able to measure which products are used where, and which products lead to favorable outcomes for the majority of patients. It’s exciting getting all these groups together.

Rather than calling them ‘value analysis groups,’ I call them ‘solution groups.’”

“ I’ve never seen an effort where end users, physicians and executive leaders were engaged, and we did NOT come up with a better result.” and reduce costs. “Orthopedic, cardiology, general surgery, OB/GYN and other surgeon leaders have been incredibly engaged as we refresh contract strategies in product categories such as total joints, sports medicine, trauma, spine, cardiac rhythm management, instrumentation, preassembled custom kits, etc. Nursing and infection prevention have led in a number of categories, while our pharmacy leaders have been supporting efforts in access, cost and channel management. Food service leaders have also been engaged as we reduce variability, while our laboratory leaders have supported a number of equipment and supply areas to include blood and testing stewardship.”

• Transformed a multiple-purchasing-organization structure within SAP into one systemwide structure,

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How are you better at practicing your profession today than you were 5-10 years ago?

“I am more inclusive. The old saying, ‘I know what I’m doing, so let me do it,’ isn’t effective. I’ve never seen an effort where end users, physicians and executive leaders were engaged, and we did not come up with a better result.

The input, guidance and insights provided by end users, people in the field and suppliers always make the process better.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“They will have to be operationally sound in order to understand the flow of information, products and cash. Managing ‘technology creep’ is probably the biggest challenge going forward. A number of my peers have told me, ‘We have gone through savings initiatives, but those savings instantly disappear when new, more expensive technologies are introduced and integrated into our systems as the ‘next shiny object.’’”

August 2019 | The Journal of Healthcare Contracting

Ed Hisscock Senior vice president, supply chain management Trinity Health Livonia, Michigan

About Ed Hisscock: Born in Port Huron, Michigan, a lakeside city that shares a border with Sarnia, Ontario, Ed Hisscock was raised in Lupton, Michigan, population just over 300.

He has more than 25 years in supply chain and IT disciplines with companies that included both healthcare suppliers and providers. He began his healthcare career fixing lab equipment for the Scientific Products division of American Hospital Supply (later, Baxter Healthcare). Approximately five years after Baxter’s acquisition of American in 1986, he was offered the opportunity to help develop Baxter’s justin-time program, ValueLink, in southeast Michigan.

The Journal of Healthcare Contracting | August 2019

Over the course of his career, he founded two healthcare companies and personally served over 100 provider organizations in the U.S. and Europe, focused on strategic sourcing, value analysis, information technology and strategic cost management solutions.

He is a frequent industry public speaker and serves as a guest lecturer at Michigan State University and the University of Wisconsin – Milwaukee. He holds bachelor degrees in electronics engineering and behavioral science, and a master’s degree in supply chain management.

At Trinity Health, he is he senior vice president of supply chain management. Prior to this assignment, from

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TEN PEOPLE TO WATCH 2015 to 2018, he served as vice president of strategic sourcing and supply chain informatics for Trinity Health.

About Trinity Health: Trinity Health serves diverse communities that include more than 30 million people across 22 states. The IDN includes 92 hospitals, as well as 109 continuing care locations, which include PACE programs, senior living facilities, and home care and hospice services.

Most challenging/rewarding project in the past 12-18 months: “The most challenging work on our plate lately has been changing our relationships with our supply base. These

Looking forward to: Hisscock says he is looking forward to advancing supply chain capabilities related to clinical informatics. “Trinity Health’s clinical informatics team is working with supply chain on a bill-of-materials, so we can understand what products are used on which patients for which procedures. As our studies become more robust, we can give our clinicians richer data. For example, we can provide them with data about what other clinicians in the Trinity Health network are doing. If a physician in one facility is using fewer products but experiencing better outcomes, we can share that information with all.

“This work will help us align with clinicians across Trinity Health’s 22 states and give us a chance to contribute to transforming health and improving outcomes by further reducing clinical variations. And the timing couldn’t be better, as we are launching a common EMR across the entire enterprise.”

“ There are tremendous opportunities to drive costs out of our suppliers’ Selling General and Administrative (SG&A) expenses.” relationships are traditionally transactional, and it will be in everyone’s best interest if we shift that to something more collaborative – and lean. For instance, there are tremendous opportunities to drive costs out of our suppliers’ Selling General and Administrative (SG&A) expenses. Industry sector benchmarks suggest there could be as much as 15% to 20% waste in the way we currently do business in this area.

“At Trinity Health, we have found a few willing suppliers to participate in kaizen events,” that is, events in which every step of a process is examined and assessed for waste. By consolidating purchase orders, shipments and invoices, Trinity Health and a key supplier have achieved substantial cost-savings.

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How are you better at practicing your profession today than you were 5-10 years ago?

“I stay on top of my own continuous improvement by remaining constantly curious and completely engaged. I went back to school to become an expert in my field. I stayed involved with that institution as a guest lecturer, and I make sure I am always open to learning from the bright and capable people I serve with at Trinity Health. I try to experience the healthcare supply chain from as many perspectives as I can.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“I advise the next generation of supply chain professionals to challenge themselves to bigger ideas related to trade relationship efficiencies and waste, business continuity risks, and ways to promote change – specifically, standardization. They will be accountable for finding new ways to lean out our relationships with suppliers and intermediaries, as well. This will require education in supply chain fundamentals, inventory, finance, lean and procurement.”

August 2019 | The Journal of Healthcare Contracting

TEN PEOPLE TO WATCH

Anand Joshi, MD, MBA Vice President, Procurement & Strategic Sourcing NewYork-Presbyterian Hospital New York, New York

About Anand Joshi: Born in Queens, New York, Anand Joshi received his undergraduate degree in biochemistry from Harvard University, a master’s in business administration from Columbia Business School, and his M.D. from Columbia University College of Physicians and Surgeons. He was one of the founding members of NewYork-Presbyterian’s Emerging Leadership Council.

“I had my heart set on becoming a physician as early as high school and I had been pre-med throughout my undergraduate years. Even in medical school I had every intention of becoming a practicing physician (pediatric sub-specialist). However, after doing a summer internship

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at McKinsey & Company after my first year in business school, one thing led to another and I never ended up going to residency. Instead, I joined McKinsey & Company full time as an associate.

“I had the opportunity to lead a project at NewYorkPresbyterian in 2003 which happened to be focused on lowering non-labor expense. That was my first exposure to hospital supply chains, and I have been doing work in this realm ever since.”

In his role as vice president of procurement and strategic sourcing, Joshi is responsible for strategic sourcing, supply chain logistics, and purchase order management. His team of almost 400 people is responsible for the overall management

August 2019 | The Journal of Healthcare Contracting

of the $2.2B+ of non-labor expense across the NewYorkPresbyterian Enterprise.

About NewYork-Presbyterian: NYP comprises four major divisions: NewYork-Presbyterian Hospital (seven campuses in New York City); NewYork-Presbyterian Regional Hospital Network (three campuses in the New York metropolitan region); NewYork-Presbyterian Physician Services; and NewYork-Presbyterian Community and Population Health.

Most rewarding/challenging project in the past 12-18 months: “The opening of our David H. Koch Ambulatory Care Center. It was the first time my supply chain leadership was able to design a lean, end-to-end supply chain within a new center, and we were able to show how that design should be the model for all our sites. In this center, our team was responsible for supplies all the way from the dock to the bedside and into the procedural areas. As a result of the success of that model – both in terms of efficiency and service levels – now, in our other major campuses, we are being asked to take on more and more of the procedural area and unit-based supply chains.”

“ Early in my career I had found that too often, physicians’ and supply chain executives’ stereotypical views of each other were getting in the way of effective collaboration in driving down supply costs.”

Looking forward to: “I am the executive sponsor for our HERCULES NonLabor Expense (NLE) Reduction efforts. We have more than 20 cross-campus teams across every major operational area of the hospital – led by specific vice presidents and facilitated by my sourcing team leaders – that are focused on driving down non-labor expense within their scope of operations. As we’ve grown as an Enterprise – from five campuses to 11 – those forums are becoming more and more important for bringing together peer leaders of specific areas (i.e., labs, ORs, cath labs, etc.) on a regular basis.”

How are you better at practicing your profession today than you were 5-10 years ago?

“Early in my career I had found that too often, physicians’ and supply chain executives’ stereotypical views

The Journal of Healthcare Contracting | August 2019

of each other were getting in the way of effective collaboration in driving down supply costs. As a result, over the past 10-15 years I have stressed throughout our sourcing and supply chain organizations that our team focus on engaging physicians closely in our work and building trust-based working relationships with them.

The physician leadership at NYP over the years … have consistently supported my team’s efforts to engage physicians directly and be viewed as equal partners in our work with them.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“The next generation of supply chain professionals will face many of the same challenges that we are facing today – but quite likely on a greater scale, and at a faster pace. Successfully meeting those challenges depends almost exclusively on continuing to identify, recruit and retain the most talented professionals possible to address whatever situation arises. I have been fortunate over my years at NYP to experience firsthand what top talent in an organization is able to accomplish. Lots of the details of what we are trying to achieve may shift over time, but surrounding myself with phenomenally talented teams has allowed our organization to navigate whatever’s been thrown at us, and I expect would do so in the future.”

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SPONSORED:

HENRY SCHEIN

In the Event of an Emergency Why it’s critical for your supply chain’s disaster preparedness plan to include non-acute sites

Billion-dollar destruction events due to extreme weather or natural disasters are no longer outliers in the United States.

Natural disasters cost the United States $91 billion in 2018, according to the National Oceanic and Atmospheric Administration (NOAA). Since 1980,

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when NOAA began tracking this data, 2018 ranks fourth in the highest number of events with 14 disasters, ranging from floods, to hurricanes, to wildfires and winter storms. The 2018 costs ($91 billion) were also fourth, only behind the years 2017, 2005, and 2012.

Most hospitals and health systems have a plan in place for acute facilities. However, more and more are recognizing the need to build an effective disaster preparedness plan for their alternate sites as well.

It’s not a matter of if, but when.

August 2019 | The Journal of Healthcare Contracting

Unintended consequences In terms of patient value – those patients that touch the alternate care space vs. the patients that touch the hospital or acute sites – more patients get put out in an alternate care situation with a disaster.

Visualize a vast network of alternate site care providers during a natural disaster, and the vast amount of alternate care patients that all of a sudden lose their network. These patients have a myriad of conditions and needs, from chronic care, to routine care such as health screenings and care for diabetes, hypertension, and asthma management. If the alternate sites are down, the acute setting will be “clogged up” by low acuity illness (think flu, colds, ear infections).

“When you don’t have a plan for the alternate care space, all of those patients funnel through the acute space, and into the emergency department,” says Joe Kenis, national account manager, Health Care Services, Henry Schein Medical. “So you have the true emergency patients going through the emergency department, and now you have the non-acute patient population seeking care.”

Or, the non-acute patients will seek care in other places. “They’re going to go where there is care,” says Kenis. “We’ve seen that when hospitals shut down in certain markets, patient populations move to sites that are open.”

Kenis says there are many other unintended consequences of not having a plan in place for alternate sites. For instance, employees are affected. How are non-acute providers cared for during this time? You may have a plan, but if you don’t have people, your teams will be exhausted because there are no teams to replace or help carry the load.

“And think of hourly workers,” Kenis says.

“How do they get to the site? You can ask your professional staff, if able, to get there, but you’ve got to be able to have support staff there too. We saw health care professionals being

The Journal of Healthcare Contracting | August 2019

poached in markets affected by disaster events. We saw hospitals losing workers that were going to businesses (like restaurants and retail shops) that were paying more money.”

A health system’s non-hospital sites may experience damage or outright destruction of buildings during a natural disaster. Lack of electrical power. Lack of communication. Manpower shortages. Insurance carriers not being aligned. Damage or destruction to essential medical equipment. It’s a lot to consider.

Henry Schein Medical can provide insights and experience working with hospital and health systems through a myriad of disaster events.

The company offers a disaster relief hotline in advance and during a disaster, as well as a guidebook for preparedness planning and a Road to Recovery program coordinated through local organizations and medical associations that provides resources and various forms of assistance to help providers get back on their feet.

“ As you can imagine, when you’re in a disaster and your market gets destroyed, it’s very difficult to make decisions and make things happen.”

— Joe Kenis, national account manager, Health Care Services, Henry Schein Medical

It’s a portfolio of tools, resources and insights gained from experience. Within the last two to three years alone, Henry Schein has assisted customers in regions affected by hurricanes, flooding, wildfires, and more.

What to consider Building a disaster preparedness plan for non-acute sites starts with supplies, and the ability to avoid disruption. Henry Schein’s distribution network is structured to maintain the ability to support a community or region that’s impacted by a natural disaster.

“Instead of local warehouses that may get impacted in a market, our Distribution Centers are out of the market, but still well within range to supply, and we can pull from more than one location,” Kenis says. “When we were in the Florida Panhandle after Hurricane Michael

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SPONSORED:

HENRY SCHEIN

Questions to ask

Supply Chain needs to have a focus on how the alternate care clinics will manage their patient populations during a shortand long-term disruption. Questions to ask include: Where will the patient be seen during the time when normal clinic space is unavailable?

• I s there a long-term strategy to bring in temporary structures?

• Do we have supply and equipment lists developed?

•D o we have essential, long lead time, equipment and supplies identified?

•D oes my distributor have a disaster strategy and a diversified footprint to support my strategies?

What are essential and non-essential services that should be provided during a short- and long-term disruption?

• What are the capabilities with power, water, generator needs-type of generator- (one phase, three phase)?

• S ite selection and contingency locations depending on the situation and damage.

Is there a plan for employed and contracted physicians?

• Is the plan outlined in health care provider agreements?

• Is there a strategy to deploy providers from other markets?

•H ave you created a strategy with your insurance carriers? (This will allow for care of patient populations in temporary locations.)

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in 2018, we pulled from Jacksonville, Florida, and Greenville, South Carolina. We could also pull from Indianapolis. We had multiple warehouses that we could pull from to support a market.”

Considerations for non-hospital site planning include: • Non-acute equipment and supply lists will be needed for both short- and long-term incidents or displacements (days/weeks versus month). Henry Schein Medical has readily accessible products needed in the non-hospital space, and the capability of reviewing and guiding disaster teams on supply/equipment lists.

• It is critical that non-hospital sites have involvement in the health system’s overall disaster planning.

• The health care providers need to have language in their agreements that supports the system’s strategies.

• The non-hospital sites must have agreements with their insurance carriers to allow patient care and reimbursement during physical location unavailability and use of temporary permanent and non-permeant structures.

• Patients must understand the plan as it impacts them. This will help to make sure that low acuity patients are not utilizing high acuity services (i.e. travel/ transportation around non-acute plan).

The key is to have those conversations well in advance. By the time a disaster strikes, it’s already too late.

“As you can imagine, when you’re in a disaster and your market gets destroyed, it’s very difficult to make decisions and make things happen,” says Kenis. “The timing is so short, and the whole market is pulling resources, so it’s hard to get the essential medical supplies and equipment needed.”

August 2019 | The Journal of Healthcare Contracting

Non-acute product and service standardization can be painful .

The possibilities of managing disparate care sites are endless.

But so are the complexities when it comes to navigating, coordinating and communicating around contract compliance, reimbursement trends, cost avoidance/restructuring, and operational efficiency.

Have you exhausted all efforts to improve Contract Compliance?

Are you concerned with missing out on changing Reimbursement Trends?

Are you overwhelmed with managing Cost Avoidance discussions?

Is navigating Operational Efficiency an ongoing problem?

Visit www.HenrySchein.com/nonacuteSOLUTIONS to sign-up for a complimentary consultation.

TEN PEOPLE TO WATCH

Todd Larkin Chief Operating Officer Intalere St. Louis, Missouri

About Todd Larkin: A native of St Louis, Todd Larkin earned a degree in International Business through the University of Missouri’s dual degree program, after which he accepted a position with IBM in its Integrated Supply Chain organization. He initially worked as a buyer supporting customers who outsourced their IT to IBM. Later, he led a team developing eprocurement applications, and finally shifted into a consulting role. At IBM, he “saw firsthand how procurement and supply chain could become a strategic asset to the enterprise by driving value to the bottom line and to shareholders,” he says.

After IBM, he joined MasterCard, where he drove the implementation of category management and process

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improvements leveraging Lean Six Sigma principles. After MasterCard, he joined Express Scripts, soon after its acquisition of Medco. His team was responsible for managing non-pharma spend – packaging, logistics, call centers, IT, marketing, finance, construction, and overall operations.

He joined Intalere in 2017. As chief operating officer, he has responsibility for the overall supply chain capabilities delivered to clients. “While the core of this is our traditional Group Purchasing Organization (GPO) function, Intalere is expanding its integration with Intermountain Healthcare to not only drive value for our parent company, but also to capture Intermountain’s best practices – from supply chain to clinical outcomes – to help our

August 2019 | The Journal of Healthcare Contracting

clients become more effective at delivering care. Intalere continues to make investments in our non-GPO offerings and we’re seeing significant interest and traction in the marketplace in our offerings.”

About Intalere: As of Dec. 31, 2018, Intalere membership included 3,795 acute-care hospitals; 43,635 clinics; 13,338 long-term-care facilities; and 3,777 ambulatory surgery centers.

Most challenging/rewarding project in the past 12-18 months: •O rganizational change. “I joined Intalere in the second half of 2017, when the contracting organization was undergoing a transformation, primarily focused on adopting Intermountain’s best practices. One of the most rewarding aspects of that initiative was implementing changes to people, processes, and technology.”

• Integration with Intermountain. When Larkin joined Intalere, an initiative called Performance Acceleration was already underway. “Essentially, Intalere had – for the first time – fully committed to deliver savings to its parent company. We mobilized the teams, increased the level of integration between Intalere and Intermountain, and implemented processes to identify, qualify, and track initiatives over the remaining runway. Ultimately, this increased integration was able to exceed our value targets for the initiative and also benefitted our broader membership.”

• Improving relationships with suppliers, including contracting with one supplier that in prior years had refused to work with Intalere. “Our relationship with this supplier has improved so much that we are now having discussions with them regarding multiple strategic initiatives.”

• Process improvement. “When I joined Intalere, they had just completed a strategic sourcing event that had taken multiple months and resulted in contract awards for the next three years. Unfortunately, the nature of category’s volatility was dramatic, resulting in the value of the award eroding over time. The team recognized this quickly and worked to implement an

agile sourcing process, taking a significant segment of the category to market via a mini-bid each month.”

Looking forward to: “We are constantly focused on improving the competitiveness of our portfolio. However, this doesn’t just mean reduction in the price of a market basket of SKUs. Rather, we’re pulling different value levers [and] capturing and sharing clinical best practices from across our membership. Given our broad and diverse membership, we’re finding that we can capture best practices from throughout the healthcare continuum and share that information across our client base.”

How are you better at practicing your profession today than you were five or 10 years ago?

“I’ve been fortunate to work with some very talented people I’ve learned from. One of the key aspects I’ve focused on is building strategic plans across categories of spend and working with senior executives to find the best way my team can support their strategic initiatives. I think the key is to view every day as an opportunity to reflect and learn

“ I think the key is to view every day as an opportunity to reflect and learn something new.”

The Journal of Healthcare Contracting | August 2019

something new. It’s also important to constantly focus on what value you can provide and how that’s aligned with the larger goals of the organization.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“The next generation will need to … be relentless in driving change. There is a lot of resistance to change in healthcare and it’s understandable when you have potential impact to patients’ lives. However, the next generation [cannot] become frustrated as they try to implement these new concepts and innovations. They’ve got to be relentless in helping to transform healthcare and capture the value of these new approaches and innovations.”

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TEN PEOPLE TO WATCH

Herman Lovato Director of support services Centura Health Centennial, Colorado

About Herman Lovato: Herman Lovato was born at the now-closed Fitzsimons Army Medical Center, while his father was desert training outside of Camp Pendleton, California. His childhood school had a relationship with Porter Adventist Hospital, where his aunt worked as an ICU RN. After graduating high school, a family friend who worked at Porter got him an entry-level position delivering and cleaning hospital equipment, which supported him through college.�

He worked for Blockbuster rentals. “It was there that I learned the importance of relating to customers, creating an experience, and valuing the person. I believe supply chain has a big part in creating the experience for patients and providers.

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As the director of support services for Centura Health, Lovato supports multiple non-clinical service lines and enterprise strategies that span supply chain, clinical engineering, laboratory services, pharmacy, nutritional services and facility maintenance. Outside of enterprise responsibilities, he oversees operations for the supply chain outpatient provider office network, Littleton Adventist Hospital Supply Chain and Littleton Adventist Hospital Nutritional Services.

About Centura Health: Centura Health is a network of neighborhood health centers, mountain clinics, urgent and emergency care facilities, 100+ physician practices, and 17+ hospitals throughout the states of Colorado and Kansas.

August 2019 | The Journal of Healthcare Contracting

Most challenging/rewarding project in the past 12-18 months: “One of my biggest successes was establishing a support team and partnership with the outpatient provider network of facilities, which once exceeded 300 offices. Visibility to provider offices’ spend increased by 95%, allowing our team to put together sourcing and purchasing strategies across the enterprise. One of these strategies included pharmaceutical spend, which accounted for 70% of total spend. Partnering with Pharmacy to highlight the areas of opportunity justified hiring a dedicated pharmacist to establish a pharmaceutical and therapeutics committee dedicated to outpatient provider pharmacy opportunities. Our teams have partnered to provide valuable data analytics, visualization tools, and implement a number of highly impactful changes to our formulary.”

Looking forward to:

“ The importance of data has also increased the accuracy of information, putting an emphasis on building items into the item master, developing facility-specific item lists to manage approved items, and collecting information during a patient encounter. Each item attribute impacts how data is used to make decisions and in healthcare system billing, which directly impacts revenue.”

“I was inspired early in my career by the potential and opportunity to strengthen partnerships outside of the supply chain.

It’s through these partnerships we can continue to improve patient outcomes, create a patient-centered experience, cut unnecessary costs, and support patients and staff.

“One of my goals over the next year is to … develop a successful strategy within nutritional services. I would like to support dieticians and nurses by developing lean processes, ensuring we get product to the patient floors, seeing that it’s well managed, making sure we have no issues with expiration dates. We can provide tools, and, they – as experts in the field – will determine how to use them.”

How are you better at practicing your profession than you were 5-10 years ago?

“There has been a significant change in the practice of supply chain over the years. The industry is not only more equipped to capture data, but has also improved the way we visualize it. Bridging the gaps between purchasing data and clinical data has strengthened relationships between clinical teams and has directly impacted supply chain’s ability to contribute to patient outcomes and quality care.

The Journal of Healthcare Contracting | August 2019

“The importance of data has also increased the accuracy of information, putting an emphasis on building items into the item master, developing facility-specific item lists to manage approved items, and collecting information during a patient encounter. Each item attribute impacts how data is used to make decisions and in healthcare system billing, which directly impacts revenue.

“Supply chain front-line staff also use more technology and tools then ever before. Ten years ago, we were happy to scan and manage par inventory. Now we have grown to focus even more on the origination and routine maintenance of par inventory. Every front-line member is able to review purchase history reports that provide item run rates and recommend a five-day and seven-day par.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“I am excited for the future of supply chain, and see opportunities to build partnerships and demonstrate the value that supply chain professionals bring to the healthcare industry. However, there are challenges.

“Every supply chain professional must prepare for the pressure between rising costs of goods and services, and finding creative solutions to deliver results. In some cases we can create the competition and negotiate competitive pricing, and in others the industry allows for price gouging.

There are many variables that play into pricing, and there are challenges with getting a product to the market. However, it is ultimately the patients who suffer.”

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TEN PEOPLE TO WATCH

Joel Prah Vice President, Supply Chain Mercyhealth Janesville, Wisconsin, and Rockford, Illinois

About Joel Prah: Born and raised in the greater Milwaukee area, Prah was always intrigued with how things are made, and he pursued a degree from Milwaukee School of Engineering in manufacturing engineering. He held leadership positions at General Electric and other manufacturers, and obtained his Executive MBA from Purdue University’s Krannert School of Management during the early part of his career.

As director of manufacturing at a telecom equipment company, he fell in love with procurement and the ability to leverage the company’s supply base to advance manufacturing goals for cost, cycle time and inventory reduction. After Y2K, when the telecom industry flattened, he

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took a position as director of supply chain at an Ascension Health system in Milwaukee. He developed, designed and built consolidated service centers at two health systems in Milwaukee, the more recent one being at Froedtert Health.

Prah joined Mercyhealth in August 2018. He is responsible for logistics, operations, print services, sourcing and purchasing, and other hospital administrative duties. He serves on the Executive Council, reporting directly to Javon R. Bea, president/CEO of Mercyhealth.

About Mercyhealth: Mercyhealth is a multi-regional health system with more than 850 employed physician partners, seven hospitals and

August 2019 | The Journal of Healthcare Contracting

85 primary and specialty care locations serving 55 northern Illinois and southern Wisconsin communities. Mercyhealth’s over 8,000 employee/partners care for more than 2.4 million patient visits each year.

Most challenging/rewarding project in the past 12-18 months: “It was imperative for me to take time early on in my new role at Mercyhealth to learn our operations, get to know my teams, and develop relationships with other leaders, and at the same time assess the supply chain organization and determine what our future strategy should be. We were in the middle of a spine implant initiative that had stalled during negotiations. It was rewarding for me to work with my new team, physicians, legal, and the supplier to get this contract ‘over the finish line.’’”

Looking forward to: “Key projects will center around the integration of our two legacy supply chains. Mercy Health and Rockford Health came together in 2015, but we have been operating with two different ERP systems and two prime distributors. This year we will evaluate ERP systems, partnering with IT and Finance. After we make our decision, we will develop a strong implementation plan. I am also looking forward to selecting one med/surg distributor, freight management company and vendor credentialing supplier. Finally, we will be evaluating the opportunity to design and develop a centralized integrated service center for Mercyhealth.”

“This is a great time to be in supply chain. The opportunity to make a significant difference in financial and clinical outcomes in healthcare is embedded in our overall role and responsibilities. Challenges will continue in balancing reduced reimbursement and increasingly expensive technology. The work that can be done with some of the new technologies is outstanding, and we want to do what’s best for our patients. But such technologies often are more expensive. It’s incumbent on supply chain leaders and others to understand what’s driving our costs, and to make sure we keep it in check.

“ I would recommend to the next generation of supply chain professionals that they spend time learning what our clinicians do on a daily basis. Get out there and spend time in the OR, cath lab, ED and other areas.”

How are you better at practicing your profession today than you were 5-10 years ago?

“I have always believed in understanding the ‘how and why’ of everything I am involved in, and typically ask a lot of questions. I continue to learn from everyone around me, including our CEO, vice presidents, physicians, peers and staff. I try to Observe, Listen, and Learn, and use past and present knowledge to guide decision-making.”

The Journal of Healthcare Contracting | August 2019

What are the challenges or opportunities facing the next generation of supply chain executives?

“I would recommend to the next generation of supply chain professionals that they spend time learning what our clinicians do on a daily basis. Get out there and spend time in the OR, cath lab, ED and other areas.

“To be successful, supply chain professionals need to be skilled in many areas, such as finance, negotiations, problem solving, logistics, analytics, leadership, change management, performance improvement and other areas.

We all need to be lifelong learners and to collaborate with the many roles within our health systems to drive our profession forward.”

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TEN PEOPLE TO WATCH

John Thompson Senior vice president, sourcing operations Vizient Inc. Irving, Texas

About John Thompson: Born and raised in Wichita, Kansas, Thompson got started in healthcare working in a nursing home to help finance his education at Wichita State. “I liked helping people and saw a dynamic industry with a lot of career options,” he says. His next job – while still in college – was working for a healthcare consulting firm processing Medicare cost reports. “My initial plan was to become a nursing home administrator, but as things evolved I decided to focus on healthcare administration and get a minor in gerontology and a minor in sociology.” After graduation, he worked for a large cardiovascular physicians group for seven years and got involved in many aspects of the

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practice, including procurement. In 1999, he joined Novation (now Vizient), with a role in surgical contracting.

At Vizient, he leads the HR and Workforce Solutions verticals as well as Vizient Insurance Services. Vizient works with about 600 staffing agencies to fulfill contract labor needs in clinical, allied, IT and non-clinical roles.

In addition, Vizient helps hospitals and health systems form benefit plans around health, dental, life, disability and pharmacy.

“Being with Vizient almost 20 years, I’ve had an opportunity to experience many different responsibilities and roles – working with leaders and mentors, bringing in talent, looking at how we operationalize a business and

August 2019 | The Journal of Healthcare Contracting

how we can drive value back to the member. How you work with teams, listen to stakeholders, understand their needs, put opportunities in place to help them leverage their spend – that applies whether you’re in sourcing or overall labor management.”

About Vizient: Vizient was founded in 2015 as the combination of VHA Inc., a national network of not-for-profit hospitals; University HealthSystem Consortium, an alliance of academic medical centers; and Novation, the healthcare contracting company they jointly owned. In February 2016, Vizient acquired MedAssets’ Spend and Clinical Resource Management (SCM) segment, which included Sg2 healthcare intelligence.

Most challenging/rewarding project in the past 12-18 months: “Over the last year, I have been working with certain segments of the Vizient sourcing and consulting teams, such as purchased services and food, [to offer] contracts on the business side of care that can lower costs, and subject matter experts with data, insights and expertise to help with implementation, so that savings are realized and sustained. It has been exciting to work cross-functionally, using data and leveraging expertise, to connect all of the dots for suppliers, supply chain and clinicians, as well as with finance and other facility stakeholders.”

What are the challenges or opportunities facing the next generation of supply chain executives?

“I think the scope of improvement opportunities in the health care supply chain is one of its biggest challenges.

Supply chain operations in other business sectors have grown in sophistication and efficiency because of data and technology and resources. However, we aren’t making

“ I have become a better listener, which has helped me understand how our stakeholders define value and has reshaped how I partner with them to achieve their goals.”

Looking forward to: “One of our bigger projects is building out our human resources and workforce solutions verticals. Vizient has a comprehensive offering of solutions, such as insurance products and employee benefits, contract labor and labor consulting/utilization.”

How are you better at practicing your profession today than you were five or 10 years ago?

“I have been fortunate to have had some extraordinary leaders and mentors who have helped me understand that success in the healthcare supply chain requires a consistent focus on next-generation ideas grounded in historical

The Journal of Healthcare Contracting | August 2019

knowledge. That approach and their coaching have helped me look for opportunities to more effectively engage internal and external stakeholders as the company and the industry have evolved. … I have also become a better listener, which has helped me understand how our stakeholders define value and has reshaped how I partner with them to achieve their goals.”

widgets; we are providing an incredible array of medical supplies, devices, drugs and equipment so clinicians can care for and heal people and run a financially stable business.

“It is critical that supply chain professionals coming into this industry understand how and why decisions are made in their organization, what data is required, who needs to be included in the process, and how to effectively communicate across the organization when decisions affecting supplies and products are made. I encourage supply chain professionals at every level to take advantage of the educational opportunities offered by various organizations to increase understanding of not just the latest technology, but also the strategies that are required to successfully lead change.”

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TEN PEOPLE TO WATCH

Adrian Wengert Vice President, Supply Chain & Procurement St. Luke’s Health System Boise, Idaho

About Adrian Wengert: Adrian Wengert has supply chain in his blood. His grandmother managed supplies at a hospital in Twin Falls, Idaho, and his father managed inventory in a military warehouse.

His son, Adrian, spent many weekends in that warehouse.

“He’d hand me a broom and tell me that keeping the floor clean is good warehouse etiquette,” says Wengert, who grew up in and around Boise, Idaho.

His first job was working in a distribution warehouse at age 18. He spent 10 years in non-healthcare supply chain, leading distribution, operations and inventory management before transitioning into healthcare as logistics manager at Saint Alphonsus Regional Medical

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Center (in Boise) in 2003, for whom he ultimately served as director of supply chain. He joined St. Luke’s Health System in 2014.

As vice president of supply chain and procurement, Wengert provides strategy, direction and oversight for all category management, strategic sourcing, value analysis, contracting, capital project management, data/analytics, purchasing, operations, inventory, logistics and program management initiatives. His team manages $600 million in non-labor supply spend.

“Growing up, I spent a lot of time stocking shelves and understanding supply chain principles across industries,” he says. “But healthcare supply chain called to me,

August 2019 | The Journal of Healthcare Contracting

specifically because it gave me a chance to influence the community that I, my family and friends live and work in.

There is a higher calling in healthcare that drives immense internal satisfaction, even as challenging and complex as it is.”

About St. Luke’s Health System: With a 116-year-old history in Idaho, St. Luke’s has eight medical centers and 200-plus clinics.

Most challenging/rewarding project in the past 12-18 months:

“ Healthcare supply chain called to me, specifically because it gave me a chance to influence the community that I, my family and friends live and work in.”

“We completely overhauled the supply chain department – added 17 FTEs; deployed category management; and changed GPOs, distributors and wholesaler, which put $60 million in savings to the bottom line for our health system. We recognized that category management would provide a structured approach to supply spend, purchased services, IT and more. It would allow us to gain insights and drive alignment with our stakeholders. We created three categories, each with a director and managers: clinical, nonclinical/IT, and purchased services.” The approach helped the clinical team reduce the number of suppliers of total joint implants from 15 to three. “We approached the surgeons with data, were able to help align their need clinically, and asked for their help standardizing.”

Looking forward to: “We are completing the feasibility study to build a consolidated service center to improve cost, quality and our capabilities.”

How are you better at practicing your profession today than you were 5-10 years ago?

“To be a great supply chain practitioner, you need to be well-versed in process improvement, project management and data analysis. To be a great servant leader, you need to use influence and develop meaningful relationships to build trust and sustain results. I believe I’ve been able to accomplish both, which is a powerful combination. I support my employees in continuing their

The Journal of Healthcare Contracting | August 2019

education and give them many opportunities to build their skills and ultimately, their careers.

“My mentor, Ed Hisscock, was instrumental in teaching and guiding me to become who I am today and for that, I am extremely grateful.” (Wengert reported to Hisscock for a time at St. Alphonsus. Today, Hisscock is senior vice president of supply chain management at Trinity Health in Livonia, Michigan.)

What are the challenges or opportunities facing the next generation of supply chain executives?

“We have a talent shortage for supply chain professionals in healthcare,” says Wengert, who serves as a guest presenter on healthcare supply chain at Boise State University.

“There simply aren’t enough dedicated tracks in our universities for healthcare-specific supply chain development.

Supply and demand forces will affect salaries and talent, and not-for-profit health systems will have difficulty paying market rates when the competition for these professionals across industry is high. We should be using the same strategies being deployed to address the nursing shortages, which would include targeting feeder schools, growing programs and tracks, offering incentives and providing formalized career growth opportunities.”

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For many years, U.S. medical facilities have used the imperial system (pounds) to measure patients’ weight. It’s not uncommon for hospitals to use the imperial system when weighing patients, but then switch to the metric system for medication dosing. Dosing is based on the patient’s weight in kilograms, so if the weight is recorded in pounds, it will need to be converted.

This often causes confusion and can lead to potentially fatal dosing errors. For example, an article published in the Pennsylvania Patient Safety Advisory found that in more than 25% of 479 reports submitted to the Pennsylvania Patient Safety Authority, errors occurred when the patient’s weight, measured

August 2019 | The Journal of Healthcare Contracting

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in pounds or kilograms, was incorrectly recorded as the patient’s weight in kilograms or pounds, respectively.1 Utilizing an EHR system also increases the possibility of a mistake, as the system may have default values not standardized to one unit of measure.

Due to the risks associated with using both the imperial and metric system, medical facilities are choosing to standardize to the metric system.

Organizations such as the Centers for Disease Control and the American

Drug-related morbidity and mortality in the United States have been estimated to cost the American health care system $76.6 – $136 billion annually.3

Academy of Pediatrics recommended hospitals and healthcare facilities to only use the metric system to avoid confusion over patient weights and medication dosages.2 As part of metric standardization efforts, facilities are evaluating their current scales and their weight unit functionality. Though most scales offer a unit lock function, it can be inadvertently unlocked by staff. For optimum safety and security, many providers are now requesting kilogram-only scales, with no pounds (LB) option. Utilizing a scale that only offers weight measurements in the standardized unit can help eliminate confusion or mistakes.

Always striving to meet the needs of healthcare providers and make their workflow weigh easier, Health o meter® Professional Scales offers kilogram-only scales for the entire continuum of care including, physician stand-on, large platform, wheelchair, and pediatric scales. For organizations that are unsure of future standardization requirements, select Health o meter® Professional Scales offer Everlock®, an exclusive patentpending feature that allows a scale to be permanently locked in KG or LB units, with no risk of accidental unlock. Everlock® can be activated at the time of first use or when the need arises.

To view Health o meter® Professional’s comprehensive line of KG only scales, visit www.homscales.com/kgonlyscales.

Sources:

1 Commonwealth of Pennsylvania Patient Safety Authority. (2009). Medication errors: Significance of accurate patient weights. Pennsylvania Patient Safety Advisory, 6(1), 10–15. Retrieved from http://www.patientsafetyauthority.org/ADVISORIES/AdvisoryLibrary/2009/mar6(1)/Pages/10.aspx 2 https://www.modernhealthcare.com/article/20150501/NEWS/150509993/a-gram-of-prevention-providers-urged-to-go-metric-to-avoid-medication-errors 3 Johnson JA, Bootman LJ. Drug-related morbidity and mortality: a cost-of-illness model. Arch Intern Med. 1995; 155:1949- 56.

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August 2019 | The Journal of Healthcare Contracting

GPOs: Critical cost-savings engines Hospitals and healthcare providers across the country are facing unparalleled financial pressures. Surging patient populations, rising hospital closures, shrinking budgets, and declining reimbursement rates mean healthcare providers must find ways to cut costs while enhancing the quality of the care they provide – a challenging task to accomplish in today’s volatile and unpredictable healthcare landscape.

By Khatereh As the sourcing and purchasing partners to virtually all Calleja, J.D. of America’s 7,000+ hospitals, as well as the vast majority of the 68,000+ long-term care facilities, surgery centers, clinics, and other healthcare providers, healthcare group purchasing organizations (GPOs) play an important role in delivering cost-savings to the healthcare system.

GPOs leverage the purchasing power of healthcare providers to negotiate competitive prices for healthcare products and services, driving down costs and increasing innovation and competition in the healthcare system.

A new report underscores just how significant a role GPOs play in reducing healthcare costs for healthcare providers and taxpayers. Healthcare economists at Dobson DaVanzo & Associates analyzed the National Health Expenditure (NHE) data published by Centers for Medicare and Medicaid Services (CMS) along with data collected from a survey of healthcare providers that use GPO services, and reached the following conclusions about the value of GPOs to the U.S. healthcare system: • GPOs save the entire healthcare system up to $34.1 billion annually and will save the healthcare industry $456.6 billion over the next ten years (2017-2026).

• GPOs reduce supply-related purchasing costs to hospitals and nursing homes by 13.1 percent compared to providers who do not use GPO services.

• GPOs generate $15.5 billion annually in Medicare and Medicaid costsavings and will reduce Medicare and Medicaid spending by up to $206.4 billion over the next ten years.

These cost-savings help preserve physicians’ ability to effectively treat their patients and safeguard patient access to affordable healthcare.

Although delivering cost savings is a critical part of the GPO mission, it is not the only consideration. Rather, the goal of GPOs is to help providers source and purchase supplies that meet their unique needs and bring the best value to their operation. And according to the report, GPOs are successfully achieving that goal.

The report noted GPOs help improve quality of care by ensuring that hospitals and providers are delivered the appropriate supplies for each patient, making sure physicians have the products they need when they need them. GPOs also help with benchmarking, comparative analysis, electronic product tracking and emerging trends. These services help streamline the purchasing process, allowing providers to spend less time and money on logistics and more on their patients. The myriad benefits and services GPOs provide leads the report authors to conclude that “collectively, GPO services lead to increased efficiencies, better use of staff, and lower total costs.”

Cost containment is a systemwide challenge for healthcare stakeholders.

And GPOs’ unique line of sight over the entire healthcare supply chain makes us distinctly situated to help our provider partners meet challenges head on.

As the healthcare landscape continues to evolve, studies like the Dobson DaVanzo report and other industry surveys of provider purchasing executives suggest that hospitals, nursing homes and other healthcare providers will continue to turn to their GPO partners to deliver the best product at the best value.

Editor’s note: The Dobson DaVanzo report may be accessed at https://www.supplychainassociation.org/wp-content/ uploads/2019/05/HSCA-Group-Purchasing-Organizations-Report-FINAL.pdf Khatereh Calleja, J.D., is the president and CEO of Healthcare Supply Chain Association (HSCA).

The Journal of Healthcare Contracting | August 2019

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By David Forbes, Director, Healthcare Supply Chain Collaborative

HIDA PRIME DISTRIBUTOR

Health Industry Distributors Association

were unavailable, a technically reasonable substitute was identified as a syringe accompanied by a vial of saline that clinicians could prepare manually.

This simple substitution had a cascading effect on UTMC’s workflow.

When Staying in Your Lane is not the Solution Solving challenges that arise throughout the end-to-end healthcare supply chain is no easy task, and the complexity of the issues may be the most apparent when it comes to backorders.

Michelle Clouse, Concordance Healthcare Solutions Customer Experience VP, uses a 9-lane swimming pool analogy to educate her team on the movement of a product through the supply chain and to create awareness about the impact a backorder can create: “If I’m in the middle lane – in distribution – that’s what I’m focused on. I may notice what’s going on in the lane on either side of me and maybe occasionally I see what’s going on in the lane beside that.” She pointed out that she has little line of sight to what’s going on in the far left lane, i.e. point of manufacture, or the far right lane – point of use. “All the lanes need to work together,” she said. “We need to understand how each lane affects the other in order to truly make a positive impact in the process.”

The University of Tennessee Medical Center (UTMC) and Concordance detailed a powerful example of how a simple backordered item can rock the distribution channel and a healthcare system at HIDA’s 2019 Supply Chain Visibility Conference. Anticipating disruptions, the trading partners had proactively cocreated a platform to bring thought leaders together, understand and prioritize improvement areas, and to collaborate at multiple points along the way.

“We started uncovering the very deep impact that even one backorder had on UTMC,” Clouse said. Their team “needs to know if it’s really an exact match and if not, what are the differences?” For example, when pre-filled saline flushes

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Domino-Effect Back Order Challenges for UTMC: • Inventory original items throughout the health system to determine when they’d run out • Review pricing and contract eligibility of alternate item • Set up new item number for alternate and mark bins throughout hospital • Create training protocol for the new process. Most millennial nurses had only been trained on the pre-filled syringe protocol at their health system.

• Track and record who had been trained, needed retraining, and review schedules in case a nurse had been absent during the initial training.

Both Clouse and UTMC Supply Chain VP Ron Collins agreed that simple-solution backordered items may spark issues that aren’t even anticipated – like clinician training.

Clouse said her team learned that they needed better – and faster – communications pathways with UTMC. “We need as a distributor to provide the best information we possibly can so the provider can make informed decisions – and do it quicker,” she said For more information on HIDA’s Healthcare Supply Chain Collaborative, contact Program Director David Forbes at forbes@hida.org.

August 2019 | The Journal of Healthcare Contracting

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Procurement Made Easy Abandon time-consuming manual inventory processes and adopt a modern software platform Your organization is growing. Today, you’re managing both acute and non-acute care facilities. As facilities are added, you must manage a complex supply chain that occurs outside the four walls of the hospital.

Sound familiar?

“I work daily with healthcare organizations, and hear this story often,” says Jeff Lawrence, vice president of Business Development for Inventory Optimization Solutions (IOS), a Provista company. “As patient volume shifts from the four walls of the acute care setting to non-acute facilities, you need to gain access and visibility to this spend. Non-acute facilities often lack standard operating procedures and product and vendor standardization. As a result, the clinical staff struggles to manage inventory and complex ordering via multiple vendor websites.”

Today, forward-thinking health systems are gaining visibility and control over their non-acute facility spend by implementing an inventory management software, like Envi® from IOS, in their non-acute facilities.

As purchases scale into the thousands of items, manual and inefficient processes cannot keep pace. InJeff Lawrence stead, organizations need a reliable, innovative inventory

The Journal of Healthcare Contracting | August 2019

PROVISTA

management and procurement software platform to automate processes, offer visibility across the supply chain and ensure accurate pricing. When technology is coupled with the products and services offered by a group purchasing organization (GPO) like Provista, facilities realize even greater savings, efficiencies and conveniences.

“If you look at organizations that do not have a procurement platform in place, when we implement Envi, we’re seeing savings of 25% on total product purchasing,” Lawrence says.

“There’s a significant savings potential, especially when using both Envi and a GPO. With our platform and with Provista managing the system, process and database, along with its product portfolio, you have a userfriendly, turnkey system that saves you money through efficiency, visibility and contract alignment.”

A More Intelligent Procurement Process Envi simplifies all aspects of procurement to enable smarter, more efficient ordering and inventory oversight. The cloud-based solution enables healthcare organizations to typically realize: • 50% decrease in order processing time via automation.

• 5% to 15% savings tied to contract tracking and formulary compliance.

• 20% reduction in on-hand inventory.

Facilities can create product formularies in platforms like Envi, ensuring orders are placed from a pre-approved product list. When a GPO’s portfolio is included in the platform, facilities

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have the additional benefit of also ensuring they’re getting the best price on each product in the formulary.

“You have the simplicity of calling up an approved list of defined products that anyone within your enterprise can buy, and you also see the lowest price,” Lawrence points out.

As organizations continue to grow through acquisitions, Envi facilitates the alignment of new offices to the desired product formulary, giving all offices access to the same prices.

Price parity across locations is often problematic as locations span geographies and new offices just keep their same buying behaviors.

With a highly flexible interface engine, Envi can output crucial data to your existing systems, enhancing the value of your existing information technology investment and enabling even greater efficiency and control in your processes.

Purchase order approval rules help control location purchasing behavior. Managers can set approval limits by supplier or dollar amount. This allows an organization to require, for example, that any purchase over $5,000 to be approved so managers can verify high-dollar-amount orders.

Save Time, Money and Resources With automation, point-and-click formulary compliance and the ability to identify fulfillment issues, Envi reduces the time, money and resources dedicated to procurement.

“We deliver efficiencies that drive hard and soft costs out of the supply chain,” Lawrence points out. “When you can see all of your products across all facilities, you can decrease inventory levels and reduce the number of expiring products.”

Business processes have to function even when you’re away from your desk or office.

Envi is optimized for use on smartphones, tablets and other mobile devices through the Envi native apps. Barcode scanning enables

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critical functions in the Envi mobile app to increase the speed and accuracy throughout the entire system.

Organizations that use Envi and buy through a GPO like Provista across all locations benefit from better tier pricing and rebates—Provista’s quarterly rebates average 3% to 6% of purchases.

Right Time, Right Supplier, Right Price Many organizations lack visibility across their supply chain and across each office location. Envi provides that line of sight into buying patterns and which suppliers are used. This can uncover opportunities to adjust inventory levels to match usage, which reduces costly overstocking issues. Plus, Envi has all of the capabilities of a dedicated materials management information system. It can interface directly with existing applications and deliver analytic reports.

The Envi reporting engine provides a robust suite of preconfigured reports. These reports help executives make more informed purchasing decisions based on past behavior, product standardization and other factors. “As your purchasing behavior evolves, we can run reports and provide analysis to make sure you stay aligned with and activate the best contracts,” Lawrence says. “Once you have all of your procurement and inventory in a single system, you’re able to run analytics and get insights you’ve never had before.”

IOS provides services for cleansing and maintaining your data. By focusing on creating and maintaining an item master with relevant and contract aligned products, you ensure ongoing savings. A current item master and accurate data are key to payment accuracy, improved automation, contract alignment and detailed analytics.

As healthcare facilities walk a tightrope between having enough supplies on hand to serve clinical and business needs while finding new ways to save and streamline processes, a procurement platform like Envi is more critical than ever. “Ultimately, we offer a user-friendly system that saves you money,” Lawrence says.

As organizations continue to grow through acquisitions, Envi facilitates the alignment of new offices to the desired product formulary, giving all offices access to the same prices.

August 2019 | The Journal of Healthcare Contracting

YOU WOULDN’T USE A CHAINSAW TO SLICE A WATERMELON WHY USE AN ACUTE GPO FOR YOUR NON-ACUTE FACILITIES? Provista specializes in the non-acute supply chain. Our deep expertise is coupled with strategic emphasis on relationships with members, distributors and suppliers.

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EMR

Interoperability: Are we there yet?

It’s not that simple.

Medical device interoperability – that is, the ability of equipment and devices to interface with the electronic medical record and other devices – remains a tough nut to crack. But that hasn’t stopped the feds, EMR developers, equipment and device manufacturers, and healthcare providers from continuing to work toward that goal.

“We are involved in discussions” about interoperability with others across the continuum of care, says Ken Harris, executive vice president, sales and marketing, Health o meter. “To the extent manufacturers can be involved, our role is to ensure our messaging is clear and that caregivers can easily record accurate information for safe and consistent care.”

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Why it’s important In February 2019, the National Science Foundation issued a Request for Information asking those in the industry to help determine “whether a vision of sustained interoperability in the hospital and into the community is feasible, and if so, what it will take to realize it.”

“While healthcare systems are rife with medical devices and the data they produce, to date, these devices are not interoperable and cannot effectively interact with each other and the broader healthcare ecosystem,” wrote the agency. Interoperability, on the other hand, “will provide greater support for patient safety, decrease medical errors, reduce provider burden, reduce practice variability across healthcare facilities/geographic areas, and ultimately enhance medical care quality and outcomes.”

August 2019 | The Journal of Healthcare Contracting

The absence of interoperability comes with a human cost.

Researchers from the University of Texas Health at San Antonio studied the accuracy – or lack of accuracy – of insulin-related decisions made on the basis of point-of-care blood glucose testing among critically ill patients.

“Transcribing these values from glucometers into a paper log and the electronic medical record is very common yet error-prone in intensive care units, given the lack of connectivity between glucometers and the electronic medical record in many U.S. hospitals,” they wrote in the March 2019 issue of “JMIR Medical Informatics.”

A total of 5,049 blood glucose tests (pertinent to 234 patients) were studied. Transcription errors in the paper log, the flow sheet, and in both resulted in eight, 24, and two insulin errors, respectively, the researchers found. As a consequence, patients were given a lower or higher insulin dose than the dose they should have received had there been no errors. Overall, 30 unique insulin errors affected 25 of 234 patients (10.7%).

Obstacles If achieving total interoperability were easy, it would already be here. But it’s not that simple.

“The primary obstacles are the customer’s priority and access to technical and EMR resources,” says Harris. “All EMR integrations require resources, whether the scale is being connected directly or through a monitor, and customers don’t always have the time or resources for integration projects. For scales in particular, every interface, regardless of brand, requires project management and project resources for a single vital sign.”

“Ease of use and ease of deployment are two primary obstacles for interoperability of medical devices,” says Chad Darling, senior product manager, EMR Business Development, Midmark Corp. “First, if a system is

The Journal of Healthcare Contracting | August 2019

difficult to set up, requires each device to be preconfigured or is not stable, you will most likely not see that device connected to the EMR. “Once the hurdle of connecting the device has been overcome, daily adherence becomes the next hurdle,” he continues. “If it is easier to manually key in values or if the interoperability fails when the device is being used, staff will scan or key in the information instead of using the connected device as it was intended. Oftentimes the end-user experience is overlooked for better interoperability.”

Garrison Gomez, executive director, marketing, patient monitoring and diagnostic cardiology, Hillrom, points out that the primary barrier to interoperability doesn’t always lie with medical devices or systems.

“It is getting the right balance with the customer of its security versus clinical workflows,” he says. “We have dedicated teams that work with the customer to apply best practices that we have obtained through our experience with both large and small systems.”

“ If a system is difficult to set up, requires each device to be preconfigured or is not stable, you will most likely not see that device connected to the EMR.” Interoperability as a selling point What kind of response should contracting executives expect when they ask their vendor or supplier this question: “Will this device interface with our EMR?” “For the majority of our devices the simple answer is ‘Yes it will,’’” says Gomez.

Says Darling, “The typical answer is ‘yes’. But we always double check if the EMR is uncommon or unique to a niche. We try to be very clear about the user workflow very early in the customer conversation.

This is a major advantage, as it saves everyone time and ensures the dealer and the end user are very satisfied with their buying experience.”

“Every system is unique in some way,” says Harris. “It’s important that the [distributor] rep and the customer talk to the manufacturer so everyone understands what the installation looks like for their particular setup.

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EMR

The paths to interoperability JHC asked several manufacturers of medical devices and equipment to talk about their path toward interoperability.

“Health o meter® Professional scales were the first in the market to be able to connect to an EMR system, and we have been the leader in connected scales for over a decade,” says Ken Harris, executive vice president, sales and marketing. “Our scales can be connected directly into an EMR system or connected via multiple vital signs monitors.

“In order to increase their workflow and simplify the transmission of data into a patient record, most customers choose to connect through a vital signs monitor that can transfer weight, height, BMI, blood pressure, blood oxygen saturation and temperature all with a single EMR interaction.”

“Midmark has been integrating medical devices for over 15 years, and has partnered with leading EMRs to solve interoperability issues and provide an integrated workflow that makes device interoperability easy to adopt,” says Chad Darling, senior product manager, EMR Business Development, Midmark Corp.

“We sometimes see this type of transcription errors [i.e., the errors described by the researchers at University of Texas Health at San Antonio in the accompanying article] with vital signs devices. The Midmark Vital Signs device is fully integrated into leading EMRs, eliminating transcription errors and fitting seamlessly into the user’s workflow, promoting interoperability.”

“Hillrom is a market leader when it comes to proven, secure, safe, and simple connected solutions inside and outside the hospital,” says Garrison Gomez, executive director, marketing, patient monitoring and diagnostic cardiology. “Through over a decade of innovation and collaboration on the development and deployment of our Welch Allyn Vital Signs Monitors, we have EMR partnerships with over 150 EMRs. “We have also recently received our authority to operate with the risk management frame (RMF), the Department of Defense latest security standards that we have also applied to our commercial customers.

In addition, the two largest health systems in the U.S., along with over a hundred other IDNs, have standardized on our solution for patient monitoring, which has enabled them to diagnose and treat patients earlier.”

“Each customer organization decides which patient information can be entered, how it is entered and by whom,” he says. “So while our equipment is compatible with EMR systems, having the discussion of how each system is set up is critical to understanding how an implementation will take place.”

And what if the newly installed device or system falls short of expectations, at least insofar as interoperability is concerned?

“It’s almost impossible for a [distributor] rep to understand all of the technical issues between the EMR system and the myriad of EMR-compatible equipment,” says Harris. “It’s important that the rep coordinate discussions between the user and the manufacturer if an issue occurs … so that the manufacturer can take care of it.”

“Hopefully that doesn’t happen with Welch Allyn products as we provide on-site installation and configurations of our products with the customer,” says Gomez. “That said, if the rep was to get that call, they could quickly get Welch Allyn tech support on the phone with the cus-

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tomer. We have a host of tools that [allow us to] quickly diagnose the situation remotely. In the event we can’t resolve the issue, we also have a direct support model with the majority of the top EMR companies, where we can quickly get their team on the phone with the customer to resolve the issue.”

Says Darling, “If a Midmark device is not working with a compatible EMR, Midmark technical support can work with our EMR partner to help resolve the issue affecting connectivity. Our national technical support network has partnered with leading EMR systems to ensure that if there are issues, we can get them resolved as quickly and as painlessly as possible.”

August 2019 | The Journal of Healthcare Contracting

SPONSORED:

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Do something about purchased services!

Supply chain executives know that purchased services are an expensive cost-driver. In fact, they typically contribute about 45 percent of a hospital’s non-labor budget. So spend that money wisely. Take time to research the service category, the players and the market. By doing your homework, you increase your chances of contracting with a vendor that can deliver high-quality service and lower costs.

By Ben Bailey

A successful relationship with a provider of purchased services starts at the beginning – selecting the right vendor. As a supply chain executive, you may not be familiar with the nuances of document management, interpretation services, elevator maintenance, collections, landscaping or IT staffing. You’ll find – if you haven’t already – that there are many paths to follow in trying to find that right vendor, and many sources of information to consult. Unfortunately, not all of them will take you where you want to go.

The Journal of Healthcare Contracting | August 2019

Take your department head. He or she may love the current vendor.

Maybe they’ve worked with them for a long time. They’re good people.

Certainly the department’s input is valuable. But when is the last time they tested the market?

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SPONSORED:

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How about word of mouth? Your friend and peer at a nearby health system might offer some suggestions. But will she know how well it has performed? The department head might have an idea, but probably not your friend in supply chain.

There’s another problem with word of mouth: Your colleagues may know a particular vendor for its work in one category (thanks to experience or advertising and marketing efforts). But you’re interested in another category. Does this vendor excel in that one as well?

Of course, there’s always Google. But as you conduct your search, you may find the category is ambiguous or geographically limited. What’s more, not all of your local vendors – particularly the smaller ones – have a strong enough internet presence to make it to the top search results.

There is another option – the Valify Marketplace (www.valifymarketplace.com), a public (i.e., free) online catalog of products and services from 55,000+ vendors. The decision maker can search by service category, geography, keyword, or through a number of filters, such as diversity status. Because it is populated by actual spend data, you can be confident in the search results knowing that other hospitals and health systems are using or have used the vendors listed.

Customers of Valify’s analytics technology can also view their spend with a vendor or within a category on the marketplace. Customers can even view vendors’ market share at their organization, as well as their region or the nation. If you find a vendor that you’re interested in, you can engage in an online dialogue with vendors of your choice, to describe your specific needs and ask questions. In short, the Valify Marketplace is your gateway to issuing an RFI and ultimately an RFP.

‘Weed out’ questions To save yourself time in the long run, even before issuing an RFP, take the opportunity – with the Valify Marketplace or whatever vehicle you choose – to ask early, but essential, questions of potential vendors. I call them “weed out” questions.

Do your contracts typically contain fundamental “pillars,” that is, provisions that are not up for negotiation? For example, do you insist on term renewal language, or language covering termination for cause or convenience (or both)? You want to know if vendors can comply as early in the selection process as possible.

Once you’ve selected vendors whom you think might be a possible fit, let them know an RFP is coming.

This opens up a dialogue with them, confirms you have the right contact information, and ensures they’re ready and willing to respond to your RFP in a timely manner.

You want to know if vendors can comply as early in the selection process as possible.

Your RFI: The learning opportunity Your RFI helps you focus your efforts on suppliers that are willing, interested, and capable of servicing your book of business. You want to know if vendors can comply as early in the selection process as possible. Ask them to identify two or three health systems for which they have completed a project similar to yours. Ask them to describe their implementation process and whether they would agree to “xyz” terms (i.e., those “pillars” we talked about earlier).

By the time they answer all of these questions, they will know whether they are able to do the job under the circumstances you have identified. You will too.

The RFI is valuable to you for one more reason: It helps you learn more about the category at hand. In fact, vendors who may fear being out-bid will make sure you understand all of the category-specific nuances and considerations that go into pricing out the service. You will be richer for the information you gain.

Go to ValifyMarketplace.com today to find products and services of healthcare vendors in your area. It’s your starting point toward improved services at a lower cost for your organization.

Ben Bailey is a director of client success-sourcing at Valify. Ben leads the Valify PinPoint Benchmarking program, helping clients assess their vendor agreements and accelerating their RFP process. Prior to Valify, Ben worked for MedAssets where he managed the Analytics team with a portfolio of more than $20B.

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August 2019 | The Journal of Healthcare Contracting

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PEOPLE

What will Ken Freeman think up next?

Forty-seven years into his career, he is still listening, learning and creating

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In 1974, a healthcare economist named Dean Ammer was preaching the gospel of healthcare materials management. It was a new concept. Ken Freeman was listening.

In 1980, Intermountain Healthcare offered Virginia Mason an opportunity to market American Healthcare GPO contracts to their Hospital consortium. Ken Freeman was listening.

August 2019 | The Journal of Healthcare Contracting

In 1986, four regional group purchasing organizations merged to form AmeriNet (now Intalere), the first national GPO. And Ken Freeman? Listening.

And in 1993, Affiliated Purchase Services (administered by Virginia Mason Medical Center in Seattle) became Health Resources Services, LLC, whose goal was – and still is – to nurture innovative healthcare ventures, including some in supply chain. And Ken Freeman? Listening.

In fact, Ken Freeman, CEO of Health Resources Services, LLC, a wholly owned subsidiary of Virginia Mason, has been listening to the needs and wants of those in the healthcare supply chain since 1972. That’s the year he became business manager of the pharmacy at Virginia Mason.

Space Needle Freeman was born and raised in Seattle, Washington. His father, Russ, was a painting contractor, who worked on the Space Needle, built for the 1962 World’s Fair. His mother, Maxine, ran a florist shop in downtown Seattle, kitty-corner from an Edsel dealership.

For the shop, Ken watered poinsettias during the holiday season, made deliveries, and even rolled some white carpets down the aisles for church weddings.

In high school, he entertained thoughts of becoming a lawyer. He even took Latin, as was recommended. But his first pre-law class on writing briefs at the University of Washington caused him to change his mind. “I knew I just couldn’t sit behind a desk and do this kind of work,” he says. So he switched majors, did some student teaching at Garfield High School, and got a degree in education. Upon graduation, he went into the Air Force. “I told people I would rather defend the country than take on parents,” he says.

Though he wanted to be a pilot, he couldn’t qualify for flight school because of his vision,

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so the Air Force steered him into hospital administration. And he liked it. Upon discharge, he got a job as the business manager of pharmacy at Virginia Mason. His job was to establish a procurement system there.

“When I got there, pharmacy was in the dark ages, as it was in most hospitals in 1972,” he recalls. Physicians would come in, pull the drugs they needed, write down what they took, and leave. Drug reps would regularly stock the shelves. The system worked for the doctors, but not for Virginia Mason. “We put in place some methodology and restrictions,” says Freeman. Not all the doctors in physician-run Virginia Mason were pleased with the changes, but Freeman got the support he needed from Austin Ross, who was the hospital’s senior vice president.

Materials management A year and a half later, Virginia Mason’s director of purchasing, John Mills, was named administrator of the hospital’s research center. Before he left, he suggested that Freeman apply for his old position. He did.

And he got the job. It was 1974.

“ If you find an encouraging work environment, you can find your own pathway to opportunity and success.”

In the latter half of the 1970s, materials management was believed to be an evolutionary step beyond purchasing. At the time, the term referred to the integration of purchasing, central supply, transportation, sterilization, laundry/linen and other support services.

An early proponent was Dean Ammer, whom Freeman heard speak at a conference on the West Coast. It was Ammer who came up with the idea of exchange carts, says Freeman.

Ammer said that materials management’s role was simple: Make it easy for nursing to get supplies. “He believed we were there to support them, but at the same time, we needed to put discipline into the ordering process, the delivery model, and patient charging,” says Freeman.

“Ammer believed we needed to raise ourselves out of the basement, make ourselves valuable to the organization, and provide a service. And if we did that, nursing would become our friend.”

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PEOPLE

Just a few months after becoming purchasing director, Freeman traveled to Chicago to attend Brien Lang’s logistics/materials management class at American Hospital Supply (now Cardinal Health). It was at that class that he saw firsthand how an exchange cart system could work.

He started incorporating these concepts at Virginia Mason, and soon was providing education on materials management to a consortium of rural hospitals that had been set up by Virginia Mason.

American Healthcare Systems In 1980, Freeman met executives from Intermountain Health, which had been formed five years earlier in Salt Lake City. Intermountain had joined a number of other non-profit hospitals and health systems to form American Healthcare Systems (AmHS), headquartered in San Diego. And they asked him if Virginia Mason would be interested in joining.

At the time, Virginia Mason was a member of Hospital Shared Services Association, which included most of the Seattle-area hospitals.

Freeman was on the board of HSSA. But he was listening.

Freeman is celebrating his 47th year in the Virginia Mason organization.

(The only longer commitment is his 48-year marriage to his wife, Angela.)

The hospital members of HSSA got along very well, even though they were competitors, he says. But in 1980, Virginia Mason had just started a construction program on a new wing, and HSSA – like most local or regional groups – lacked capital equipment contracts. “We did our due diligence and found that the savings American Healthcare Systems was offering were high. It was a big decision to leave the group.”

But leave they did.

“Our goal was not to upset the group purchasing marketplace,” he says. “We still had a lot of respect for HSSA.” Virginia Mason asked for marketing rights to the AmHS contract portfolio, so the Medical Center could offer those contracts to the hospitals in the rural consortium. AmHS agreed.

That lasted only so long before other Washington-state hospitals wanted access to AmHS’s national contracts. Before long, Virginia Mason was – with AmHS’s permission – marketing the program to hospitals throughout the state. In 1986, Intermountain merged with three

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other groups to form AmeriNet, expanding the portfolio and geography Virginia Mason could market in the Pacific Northwest.

In 1993, Freeman began yet another new chapter in his career by stepping away from supply chain operations and becoming vice president of Virginia Mason Medical Center Enterprise Business Development and president and CEO of Health Resources Services, LLC, a wholly owned subsidiary of Virginia Mason Medical Center. He remains in that position today.

National Purchasing Partners LLC One of his proudest accomplishments has been HRS’s creation of National Purchasing Partners, LLC, a business-oriented GPO with approximately 300,000 members. In 2018 HRS created Networx Health, LLC, a consulting group focused on bringing quality interim staffing to rural hospitals, board/trustee training and other offerings to rural healthcare organizations. In 2018, HRS launched a specialty pharmacy, which provides specialty medications to patients upon discharge. (With its recent URAC Specialty Pharmacy Accreditation, the specialty pharmacy will soon be able to offer refills to patients at home.)

“The other fun thing I get to do is help bring innovations to market,” he says. A recent example is a physical therapy product developed by the rehab department, which is now in a major distributor’s catalog. “Our goal is to stand up more companies, to find and evaluate more business opportunities,” he says.

Freeman is celebrating his 47th year in the Virginia Mason organization. (The only longer commitment is his 48-year marriage to his wife, Angela.)

“If you find an encouraging work environment, you can find your own pathway to opportunity and success,” he says. “It is possible to find change and growth within your own organization.”

August 2019 | The Journal of Healthcare Contracting

Send all upcoming events to Graham Garrison, managing editor, at ggarrison@sharemovingmedia.com

CALENDAR

AHRMM

San Diego, Calif.

IDN Summit Fall IDN Summit & Reverse Expo September 9-11, 2019 JW Marriott Desert Ridge Resort and Spa Phoenix, Ariz.

Federation of American Hospitals

Spring IDN Summit & Reverse Expo April 27-29, 2020 Omni Orlando Resort at ChampionsGate Orlando, Fla.

AHRMM Conference & Exhibition July 28-31, 2019

2020 Public Policy Conference & Business Exposition March 1-3, 2020 Marriott Wardman Hotel, Washington, D.C.

GHX

Intalere Elevate 2019 May 11-13, 2020 Gaylord Opryland Resort & Convention Center Nashville, TN

Supply Chain Summit April 27 – 29, 2020 Gaylord National National Harbor, Md.

Premier Breakthroughs Conference June 23-26, 2020 Gaylord Opryland Resort & Convention Center Nashville, Tenn.

Health Connect Partners Fall ’19 Hospital Supply Chain Conference September 23-25, 2019 Kansas City, Mo.

Spring ’20 Hospital Supply Chain Conference March 16-18, 2020 New Orleans, La.

HealthTrust HealthTrust University Conference August 12-14, 2019 Nashville, Tenn.

The Journal of Healthcare Contracting | August 2019

Share Moving Media Supply Chain Summit August 20-21, 2019 Atlanta, GA National Accounts Summit November 14-15, 2019 Atlanta, Ga.

Vizient Vizient Fall Connections Summit September 16-20, 2019 The Wynn, Las Vegas, Nevada

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NEWS

Contracting News & Notes Recent headlines, trends, to keep an eye on AI: It’s not a question of human vs. machine

Veterans’ care outside the VA system

Artificial-intelligence-powered devices may be smart, but they are not intended to replace human providers, report researchers for the Agency for Healthcare Research and Quality in a recent article “Emerging Safety Issues in Artificial Intelligence.” Robert Challen of the University of Exeter in the UK writes: “Studies reporting superhuman machine learning performance in a laboratory setting … foster mistrust among clinicians, who suspect that such performance will not be achievable in real-world settings.

Some studies, on the other hand, concentrate on testing the decision-making of machine learning systems in conjunction with the clinician and show how this can lead to improved performance compared to the unaided clinician.

These paint a much brighter picture of machine learning working in collaboration with clinicians, in real clinical settings, and open the interesting potential for machine learning to act as both a teaching and decision support tool.”

Your health system might be caring for more veterans in the future. The Department of Veterans Affairs finalized a rule implementing the criteria for determining when covered veterans may elect to receive necessary hospital, medical and extended care services from non-VA entities or providers.

Veterans must meet at least one of six conditions: 1. VA does not offer the required care or services.

2. VA does not operate a full-service medical facility in the state in which the veteran resides.

3. The veteran was eligible to receive care under the Veterans Choice Program and is eligible to receive care under certain grandfathering provisions.

4. VA is not able to furnish care or services to a veteran in a manner that complies with VA’s designated access standards.

5. T he veteran and the referring clinician determine it is in the best medical interest of the veteran to receive care or services from an eligible entity or provider.

6. The veteran is seeking care or services from a VA medical service line that VA has determined is not providing care that complies with VA’s standards of quality.

Meet a national accounts executive Patrc Merritt, director, national and strategic accounts at Cantel Medical, was recently named National Account Executive of the Year by the Association of National Account Executives. JHC readers will learn more about Merritt and the role of the national accounts director in the supply chain – particularly group purchasing – in the October issue of JHC.

A convenience-obsessed world … and you No surprise here: Eighty-eight percent of U.S. hospital and health systems executives agree that their organizations are vulnerable to consumer-friendly offerings from non-hospital competitors, such as Optum, CVS Health and Amazon, reports National Accounts Weekly. Here’s the takeaway from a Kaufman Hall survey: Many hospitals and health systems are not doing enough to develop the strong, consumer-centric foundations their organizations need to compete in today’s online, convenience-obsessed and consumer-focused world.

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Intermountain launches new IT startup aimed at value-based care Intermountain Healthcare launched Castell, a new company aimed at boosting value-based care capabilities among providers and payers.

“Intermountain Healthcare’s mission is to help people live the healthiest lives possible. This commitment is the same no matter where, when, or with whom people get care,” said Marc Harrison, MD, Intermountain president and CEO. “Castell is a critical component of Intermountain’s broad vision for healthier communities. It creates a new path for providers to access the support they need to provide high quality, affordable care to their patients across the nation.”

Rajesh Shrestha has been named as the president and CEO of Castell. In addition to leading Castell, Shrestha serves as

August 2019 | The Journal of Healthcare Contracting

vice president and chief operating officer of Community Based Care for Intermountain Healthcare. He has more than two decades of experience accelerating other health companies move from fee-for-service to value-based care.

“Healthcare’s ongoing shift from volume to value-based systems of care enables providers, health systems, and payers to take a more holistic approach to managing the health of their patients, but also creates more financial risk or rewards,” said Shrestha. “The health platform capabilities, tools, and resources that Castell provides will strengthen the ability of the health ecosystem to thrive in a value-based care environment.”

Castell’s foundation is built on lessons learned, adapted based on the successes and obstacles encountered at Intermountain, within local provider networks, and other population health-focused programs.

It will offer a comprehensive platform of tools and services to support transformation and improvement: • A proven value-based clinical care model called “Reimagined Primary Care” • A technology and analytics platform to guide care • Streamlined affiliated network management • Digital tools to address virtual care, patient experience, and social determinants of health • Access to cutting-edge initiatives and innovation coming out of Intermountain Healthcare • Opportunity to utilize care pathways and clinical best practices developed by Intermountain Healthcare In a release, Intermountain says it has experienced many successes with its value-based care management programs.

For example, in 2018, Intermountain introduced its “Reimagined Primary Care” model for physicians and patients, which is now being extended to more providers through Castell.

This focus on preventive care enabled physicians to spend more time with high-risk patients to get upstream of potential health issues. After just one year, the program produced strong results, including: • 60% reduction in Medicare Advantage admissions • 25% fewer commercial insurance admissions • 20% decreased per-member per-month costs • Improved patient ratings • Improved physician satisfaction

The Journal of Healthcare Contracting | August 2019

“Proven methods for simplifying value-based care are needed across the healthcare industry,” said Shrestha. “Backed by Intermountain’s day-to-day frontline experience with a focus on population health management, Castell will deliver impactful solutions that help other organizations improve outcomes and keep costs more affordable.”

Premier Inc, 10 hospitals launch initiative to improve maternal and infant health Premier Inc is working with 10 leading hospitals on a perinatal collaborative designed to reach zero preventable maternal and neonatal harm and deaths. Over the next two years, hospitals in Premier’s Perinatal Collaborative will design, test and adopt evidenced-based improvement strategies that can be replicated, standardized and scaled nationally. The collaborative, which launched in June, is part of Premier’s Bundle of Joy Campaign to transform the quality, safety and cost of maternal and infant health.

“Our work with providers to improve care for women and infants remains a key area of focus as we aim to create a healthier delivery system,” said Susan DeVore, Premier CEO. “We know firsthand what can be accomplished by acting as a convener to facilitate collaboration, data sharing and the development of scalable solutions. Our goal is to measurably close the gap between the evidence and what is practiced by testing and adopting new delivery models that elevate the quality, safety and cost of perinatal care.”

Participants will focus on reducing mortality and disparities in care, preventing adverse events, ensuring patients are treated in the correct and most appropriate setting, increasing the delivery of evidence-based care, enhancing patient and family engagement, and improving the overall health of women and newborns.

Premier will support collaborative participants using its nationally recognized performance improvement methodology, which leverages robust data and peer-to-peer benchmarks, as well as enables the sharing and scaling of successful improvement strategies and solutions. The following participating hospitals are also owners of the American Excess Insurance Exchange (AEIX) reciprocal risk retention group, a captive professional liability insurance company that is managed by Premier.

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OBSERVATION DECK

Points of View Reading about this year’s “Ten People to Watch in Healthcare Contracting” is like viewing a blueprint for successful, thoughtful leadership in the profession. These 10 individuals discuss things like: • Engaging with others in the organization (and beyond it).

• Learning how to gather data and share it so that it’s meaningful and actionable to others.

• Being a lifelong learner – asking questions, looking for new opportunities.

• Embracing new technology (while watching for “technology creep”).

Mark Thill

Here’s what I’m talking about: “ To be a great supply chain practitioner, you need to be well-versed in process improvement, project management and data analysis. To be a great servant leader, you need to use influence and develop meaningful relationships to build trust and sustain results.”

(Adrian Wengert, St. Luke’s Health System) “ The most challenging work on our plate lately has been changing our relationships with our supply base. These relationships are traditionally transactional, and it will be in everyone’s best interest if we shift that to something more collaborative – and lean. For instance, there are tremendous opportunities to drive costs out of our suppliers’ Selling General and Administrative (SG&A) expenses.”

(Ed Hisscock, Trinity Health) “ Our teams manage contracting as a byproduct of managing larger relationships with our constituents and suppliers. Contracting becomes a lot easier when you are engaged with the people making decisions about the service line and its future – as we were with cardiovascular.

I would tell a young person to find time to have a dialogue with the people who are influencing a service line.”

(Fred Keller, HealthTrust)

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“ There has been a significant change in the practice of supply chain over the years. The industry is not only more equipped to capture data, but has also improved the way we visualize it. Bridging the gaps between purchasing data and clinical data has strengthened relationships between clinical teams and has directly impacted supply chain’s ability to contribute to patient outcomes and quality care.”

(Herman Lovato, Centura Health) “ The next generation of supply chain professionals will face many of the same challenges that we are facing today – but quite likely on a greater scale, and at a faster pace. Successfully meeting those challenges depends almost exclusively on continuing to identify, recruit and retain the most talented professionals possible to address whatever situation arises.

(Anand Joshi, NewYork-Presbyterian) “ The transition to value-based care is not slowing down.

If anything, it is accelerating. The future generation of supply chain professionals will need to be both experts in their fields and partners with their management teams as those organizations are more and more challenged to improve care quality and [achieve] cost reductions through value-based reimbursement models.”

(Sparkle Barnes, CNECT).

August 2019 | The Journal of Healthcare Contracting

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