Supply Chain Translator

Tom Faciszewski, MD, serves as a bridge between the operations and clinical teams at St. Luke’s Health System

What begins with “s” and ends with “n?” Supply chain.

That’s about all that Tom Faciszewski, MD, knew about the subject almost 10 years ago, when he accepted, in addition to his full-time job, a two-hour-per-month assignment as medical director of supply chain at Ministry St. Joseph’s Hospital in Marshfield, Wisc.

That assignment grew into a 30-hour-per-month commitment, as Faciszewski – a spine surgeon – came to understand how an efficient supply chain could improve patient care and the healthcare system in general.

Faciszewski went to medical school at the University of Colorado, attended the University of Utah for training in orthopedics, and received his fellowship in spine surgery at the Minnesota Spine Center. He was an orthopedic spine surgeon at Marshfield Clinic from 1993 to 2013, and served as chairman of the Department of Orthopedic Spine Surgery for 16 of those years. In February 2014, he and his wife, Jill, moved to Boise, Idaho, so he could enroll in an executive MBA program. Soon thereafter, he was offered the position of system vice president of supply chain for St. Luke’s Health System in Boise.

“About two years ago, I decided I could impact healthcare in a greater way than I could one patient at a time, even though that was the most cherished and valued way,” he recalls. “I found myself waking up and asking, ‘How can I help thousands of patients, help improve the practice of physicians and operational efficiency, and most important, increase value and decrease cost to patients?’ So I made the decision in 2013 to get my MBA.”

In the process, he has learned to be a “translator” for the clinicians, the operations team (from CEOs through OR directors and front line staff) and supply chain. Such translators are sorely needed in healthcare facilities today, he says.

“Historically, hospital operations teams haven’t known how to have critical conversations with clinicians on complex practice issues and vice versa; and supply chain has been out of the loop. If we’re going to transform healthcare and move to disease state management, we need all the key stakeholders working closely together with supply chain. That is the key driver for lower cost and higher quality.”

Culture trumps strategy
The position of system vice president of supply chain was a new one for St. Luke’s, as was the position of medical director of supply chain for Ministry Health Care (the parent of Ministry St. Joseph’s Hospital) when Faciszewski assumed the role in 2005. St. Luke’s is a $1.8 billion integrated delivery network comprising seven hospitals in Idaho. With 12,000 employees, it is the state’s largest employer.

The St. Luke’s team recognized their program was tactical, not strategic, he says. “They knew they needed to do something different in supply chain. In the previous year, there had been six different people leading supply chain. Given my clinical and supply chain experience, they were excited about the opportunity to engage me to help the system build a professional, strategic supply chain program.”

But before implementing any change at St. Luke’s, Faciszewski first took a step back.

“In any business, in any firm, the culture is tantamount. The reason is, culture will trump any strategy every single time. I had to understand the culture at St. Luke’s.” So he met with a majority of the 300 senior leaders in the organization within the first 60 days. “I was out of my office and on the road, nonstop.”

He then sought to gain an understanding of supply chain spend. “I was surprised – though it’s not uncommon in healthcare – that the organization didn’t know its third-party spend,” he says. “I did a third-party-spend analysis, in order to understand our opportunity.”

Then he sought to create what he calls the “Holy Grail” for change: a platform for engaging the clinician and operations teams. It clearly was an area that would require some work.

“I found that the decision-making process on the part of the clinicians and operations team wasn’t what it should be,” he says. Too often, supply chain was making product decisions that should have been left to clinicians, and often those decisions were based on price, not long-term strategic factors. What’s more, supply chain was doing a poor job of facilitating communication between the operations and clinical teams.

“Supply chain management was failing to propose logical, data-driven options to the clinicians, and the operations team was failing to facilitate a clear decision-making process,” he says.

Decision-making process examined
Faciszewski presented his observations about the decision-making process to the St. Luke’s leadership team and talked about category management as a strategy to move supply chain forward. Subsequently, he developed a process best depicted as three intersecting circles – clinicians, operations team and supply chain – with the patient in the middle. Then he started organizing teams around five categories: hemostatic agents, spine implants, hernia mesh, neurostimulators and osteobiologics.

They weren’t necessarily “easy” product categories to tackle at the outset. But Faciszewski had a strategy in mind. “Many organizations think they have to learn everything before doing anything. But what I like to say is, you learn by doing, and you learn together – not in isolation.”

Next, the supply chain team he was assembling began identifying savings opportunities. “That’s ongoing,” he says. “But to make a long story short, we have amazing opportunities in the system to cut cost, improve efficiencies and improve quality. That is terribly exciting to me.

“We have a world of opportunity. People are engaging. Clinicians are excited about being at the table to help make decisions about quality and cost – not only in their respective disciplines, but in the context of the entire organization as a critical step in transforming healthcare.”

Credibility
It doesn’t hurt that Faciszewski is a surgeon. That fact offered credibility and the confidence to “go for the gold” at the outset.

“I’m confident of what will lead to the right solution,” he says. “I’m confident about who needs to be at the table. And I’m confident physicians want to be at the table and help make better decisions. So why would I avoid [tough product categories]?

“We may think these conversations will be uncomfortable, but we found that once you get started, they’re not uncomfortable at all. Teams develop a synergy as they work together to solve complex problems. But you have to have the right framework for discussion.

“At the end of the day, you have to follow the money into the strategic arena. Supply chain traditionally has been tactical, focusing on low-risk areas, looking for leverage [in negotiations with vendors]. The other approach is to be strategic – attack critical areas, which are high-risk, high-reward. So you go where the risk is, but you reduce that risk by moving to a more strategic approach. If we’re going to be successful in population health management and accountable care organizations, we have to attack the strategic areas.”

There are only three ways to run a healthcare organization more efficiently financially, he says. The first way is to increase revenues. But that approach is problematic, given hospitals’ operating margins of just 2 to 5 percent. The second way is to reduce benefits or staff. But that approach can end up adversely affecting patient care and clinicians. The third is to reduce third-party spend. “That approach drops savings directly to the bottom line; and if you maintain reduced third-party spend, it’s year-after-year savings.” No need to start from scratch every Jan. 1.

Leadership
Faciszewski credits his MBA program at Boise State for exposing him to some valuable business and organizational principles.

The first is familiarity with the practical tools and concepts traditionally associated with running a business, such as spreadsheets, capital investment, finance principles, etc. The second is much broader: how to lead teams, how to inspire an organization, how to successfully implement change and how to influence the people one works with.

“I like the influence model – but it isn’t just about you influencing someone else,” he says. “It’s about you being willing to be influenced. If it’s just you doing the influencing, that’s simply another method of command and control.”

Historically, when the supply chain team has made a decision to undergo a cost-savings initiative, they compiled data, called a meeting of the clinical team, and presented the data. “But what’s never talked about is the ‘why’ they are doing it,” he says. “If you don’t share the ‘why’ in a relevant way to physicians, they will ask, ‘Why should I help the hospital?’ Without the ‘why,’ physicians will often become resistant to change.”

In order to assure success, Faciszewski mandates that clinician/operations/supply chain team meetings begin with an in-depth conversation about the ‘why’ behind the initiative and the positive effects of the decision. “That completely turns the table,” he says. “It’s not me telling anyone what to do. Instead the physicians and operations team members become champions of the supply chain change because they understand the substantial benefit of their decisions to society, the hospital, their patients, their clinician teams as well as the physicians themselves.

“The soft stuff is the hard stuff,” he says, quoting a saying that resonates with him. “Manage the culture and the strategy will be successful. Ignore it and it will trump the strategy… every time.”