AHRMM initiative coming into focus
Three focal points sum up what’s happening today in some of the most innovative supply chain initiatives between providers and their trading partners – including distributors, manufacturers, technology companies and GPOs:
- Operational efficiency
- Total cost to serve
- Utilization and standardization
That’s according to a group of thought leaders convened by the Association for Healthcare Resource & Materials Management, who were charged by AHRMM to uncover applications of AHRMM’s Cost, Quality, and Outcomes (CQO) initiative.
CQO was launched in 2013 to provide training and education to help supply chain professionals and their trading partners make the correlation between cost, quality and outcomes, as they explore strategic opportunities, and evaluate and select products and equipment.
Supply chain directors are in a unique position to do just that, says AHRMM Senior Director of Supply Chain Mike Schiller. “No other group interacts with every major stakeholder internally and externally,” says Schiller, who was supply chain director at a major pediatric hospital in Chicago prior to joining AHRMM in January 2014. That is to say, the supply chain director is perfectly situated at the crossroads of the IDN’s financial, administrative and clinical staff, and all its major trading partners.
Thought Leader Task Force
AHRMM convened its Thought Leader Task Force in 2015 as a continuation of its first-ever Thought Leader Summit on CQO, held at the 2014 AHRMM Conference and Exhibition. Its goal was to identify, research and report on collaborative supply chain initiatives between providers and trading or business partners that involve better data standardization, sharing, analytics, and evidence-based decision-making to improve cost, quality, and outcomes.
After examining a number of CQO initiatives, the Task Force found that the most innovative ones tended to fall under one of the three themes – operational efficiency, total cost to serve, and utilization and standardization.
- Operational efficiency. “We’re really talking about expanding the view of supply chain partners,” says Schiller. “In the past, relationships were very siloed. ‘I’m the provider, you’re the supplier, and we’ll focus on our silos.’” But forward-thinking supply chain professionals recognize that cooperation among departments within the hospital or IDN, and cooperation with trading partners, can benefit everyone in terms of efficiency and cost. In a CQO environment, supplier and provider make an effort to understand how their actions affect the other, then work together to find solutions, says Schiller. “It’s truly exciting, because historically, the relationship between provider and supplier hasn’t always been positive.”
- Total cost to serve. Today’s healthcare providers are concerned not only about the cost to serve patients in the acute-care hospital, but the cost to serve them across the care continuum, e.g., primary care, rehab or skilled nursing facility, physical therapy, home care, etc. “It’s evolving, but it’s something new, as the supply chain grows horizontally,” says Schiller.
- Utilization and standardization. Providers are using outcomes, quality, and cost data to establish best practices in patient care, says Schiller. Evaluating clinical practice across a set surgical procedure is a prime example. Data helps the provider recognize supply utilization, patient quality, and the outcomes impact to the organization. Analyzing the clinical variations and identifying where those variations can be standardized lead to a best demonstrated practice. “CQO is really at the heart of this.”
AHRMM is pleased at how broadly healthcare has embraced CQO in such a short period of time, he says. And though CQO was initially envisioned as a three-year project, AHRMM has no intention of stopping now.
Look for another Thought Leader Task Force initiative, and another Thought Leader Summit on CQO in 2016 with an expanded format, says Schiller. “AHRMM continues to lead the charge, highlighting healthcare initiatives, providing roadmaps, and leading practices.”
Editor’s note: AHRMM15 Cost, Quality, and Outcomes Summit White Paper can be accessed at http://www.ahrmm.org/ahrmm/kc_documents/whitepapers_case_studies/cqo-summit-white-paper-2015.jsp