How Scripps Health maintains a resilient supply chain through collaborative efforts with its clinical leaders.
December 2024 – The Journal of Healthcare Contracting
Resiliency wasn’t always a buzz word in the U.S. healthcare supply chain. But in today’s post pandemic marketplace – and with recent headlines of port strikes, hurricanes and IV solutions shortages – it’s become a priority for hospital and health system supply chain teams.
“Supply resiliency for us is making sure we can continually be agile in our supply chain, that we can mitigate those risks on some of the supply disruptions that are happening,” said Cecile Hozouri, VP of Supply Chain at San-Diego-based Scripps Health.
Being a flexible and responsive supply chain is what Hozouri and her team have focused on since the pandemic. For instance, prior to COVID-19, it probably would’ve taken over a week to get a clinically acceptable product approved if a shortage or disruption occurred, she said. But since the pandemic and moving forward, the supply chain team is just hours away from receiving an approval of clinically acceptable alternatives.
“We have daily huddles throughout our supply chain, and then we huddle with our clinicians that are affected the most, to get that critical supply identified for alternative sourcing opportunities,” she said. “We’re constantly in what I would call ‘process improvement’ on resiliency. We have to mitigate disruptions quickly while maintaining our core supply chain functions.”
Scripps Health’s clinical leaders play a pivotal role in supply chain decisions. The chief medical officers for acute and ambulatory areas and its physician operations executives are part of a governance structure that meets regularly.
“We always have the ability to work through our governance structure in order to get things changed quickly when we need to,” Hozouri said. “Our service lines are in step with us. We have really strong leaders in our service lines – cardiology, orthopedics, spine, etc. – and we’re constantly working hand in hand with them when it comes to certain products. Our surgery category has a co-management group that works closely with us, as do our anesthesiologists. And we have a very tight relationship with pharmacy and oversee a lot of that stock.”
Scripps Health has been working on RFPs that require some formulary pricing. The service line clinicians have worked closely with Hozouri and her team on gathering information needed when discussing contracts with suppliers. “We’re in the process of finishing our meetings on those, discussing different strategies and how we can hold suppliers accountable to meet that formulary pricing,” she said.
The clinicians’ expertise gives the supply chain team more knowledge, coupled with our supply chain team providing data and clinical evidence to the clinicians when they evaluate how suppliers have supported the organization’s objectives. It helps too that their clinicians can offer feedback on clinically acceptable alternatives if the suppliers choose not to meet the agreed formulary.
The supply chain team has also partnered with nurses in the acute care hospitals on sustainability. Their sites have made some significant progress utilizing some reusable equipment instead of using one-time only items or disposable items that just get thrown away. “We’ve reduced our costs, not only on the cost of the product, but also the cost in our waste stream,” Hozouri said. “We’ve diverted thousands of pounds of disposal products out of our landfills. It’s been a win-win for our planet, and for our bottom line.”
Collaboration with clinicians is critical when they start looking at data to determine if all facets of the health system are in alignment with what they’re trying to achieve clinically and financially. “We’re also really trying to reach out to our partners – service and suppliers – to have a reliable and flexible way to look at some of these contracts with fresh eyes,” she said. “We involve them early in the planning process to figure out what we’re going to be going after and then get the right clinicians together and review the opportunities. Some of these service providers are even coming to us with ideas of where we can lower our costs when they see trends of our data compared to others. That’s been very helpful.”
When Scripps Health has a business review with a vendor, Hozouri is always eager to understand the current state of the relationship and where the supplier and provider are headed together. “But what I really like to see is, what is it that they think we could be doing together? What are areas of opportunities that would reduce not only our costs but theirs?”
There have been a few suppliers that have come to Scripps Health with ideas, “and we’ve put those ideas to the test,” Hozouri said. “They’re seeing things we could possibly be working with our clinicians on to lower our cost and lower our overall spend with them. We really appreciate that kind of partnership when service and suppliers come together with us.”