Alan Edwards
Vice President of Supply Chain Solutions, Mary Washington Healthcare, Fredericksburg, VA.
Mary Washington Hospital – 400 beds; Stafford Hospital – 100 beds; 28 healthcare facilities and wellness services.
In 2010, Alan Edwards became Mary Washington Healthcare’s first supply chain executive. Today, he focuses on implementing sustainable business operations and practices required to maximize the supply chain. Programs and process ownership include biomedical services; capital equipment program management; contract management; group purchasing; supply chain network; negotiations and contract administration; cost reduction and containment; strategic sourcing and purchasing; strategic value analysis; standardization; utilization; total product cost; spend analytics; physician alignment on supply chain initiatives; supply chain operations; shipping and receiving; inventory control and distribution; and vendor management.
The Journal of Healthcare Contracting: What has been the most challenging and rewarding project you have been involved in recently?
Alan Edwards: In January 2014, our organization embarked on a $30 million expense-reduction plan. The reduction target was divided into labor ($22 million) and non-labor ($8.2 million), and I have led the non-labor portion. We have assembled five task forces, each of which has submitted ideas to help us reach our non-labor reduction target. The task forces include ancillary, IS, medical, perioperative and support services. We collected and vetted over 350 savings ideas from department managers, directors and executives, with an estimated savings of more than $10 million. Over the course of six months, the task forces reviewed their respective savings initiatives and have achieved $8.2 million non-labor expense reduction. This initiative has been critical if our organization is to sustain itself as an independent healthcare system. While it has been the most challenging endeavor I’ve had during my career, it has also been one of the most rewarding. Leaders from across the organization have worked together. The task force members have had difficult conversations throughout the process and have held one another accountable.
JHC: Please describe a project you look forward to implementing in the next year or two.
Edwards: As part of our expense reduction plan, we have evaluated the tools we use in supply chain to determine their effectiveness and ROI. As a result, we expect to implement key technology changes before the end of 2015. We plan to implement a new contract management system and move to a new spend analytics tool. We believe these changes will help us continue to understand our spend and realize additional operational savings.
JHC: What is the most important quality you look for in a supplier partner?
Edwards: We look for partners who understand our mission, vision and values, and provide us with input on how they can help us achieve our goals. We also want the relationship to be patient-focused.
JHC: What is the greatest change we can expect to see in healthcare contracting in the next five years?
Edwards: Organizations will continue to look for ways to consolidate contracts, improve supplier accountability through stronger key performance indicators and reduce costs. I strongly believe we’ll see technology spend account for a larger portion of operating budgets, given the need for big data, ACOs, population health management, electronic health records and advances in patient care technology. The challenge will be contracting for these services with increased consolidation on the supplier side. These consolidations may make negotiations tougher with fewer suppliers in the market.