With high inflation and impediments to supply deliveries, industry must avoid siloes.
December 2022 – The Journal of Healthcare Contracting
By Daniel Beaird
Clinton Hazziez sees healthcare as an ecosystem of relationships.
“The nurturers are the innovators and progressive organizations that are ready to share in the risk and reward for the sake of the ecosystem,” said Hazziez, vice president of supply chain and sourcing for Baylor, Scott & White Health. “Providers – those closest to the patients – are struggling because they can’t pay enough or keep enough people. Will those nurturer organizations do something for the greater good even if it means 5% off their bottom lines?”
Hazziez says most providers want to know what these organizations can do for them. Can they make a health system smarter or more efficient?
Every dollar made in the U.S. healthcare system
“For every dollar made in the U.S. healthcare system, 30% is estimated to go to non-clinical administrative tasks. That’s estimated to be $1 trillion,” he said. “And now, that’s landed on supply chain’s front porch. That includes the cost of issuing a purchase order, the procure-to-pay cycle, the time spent on correcting invoices and managing the minutiae of contracting.”
While there’s an opportunity to improve, he’s concerned the industry is slowly regressing to pre-pandemic thinking.
“It seems like we’re going back to siloed thinking and taking our foot off the gas, but we’ve just shown that we can do this together. We can solve these problems for the greater good, but we have a challenge that’s real,” he said.
With a historical inflation rate and rising healthcare delivery costs, it’s a trajectory providers can’t keep up with, according to Hazziez. “Declining reimbursement rates and continued impediments to deliveries for health systems like increasing labor rates and sourcing raw materials have converged. We have to do something different to bend that 30% curve,” he said.
Symbiotic relationships
It takes a symbiotic relationship between all healthcare organizations to bend that curve.
“Do you know how many touches your organization has within my organization?” Hazziez asked an audience of suppliers at IDN Insights East in Philadelphia, hosted by The Journal of Healthcare Contracting, this fall. “Because when you have this one widget and you discount the other touches your organization has within my organization, we’re going to struggle with trust. As providers, we must make sure we remain efficient and mitigate our risk.”
He claims providers feel that 30% curve to non-clinical administrative tasks every day and that’s what drives them to have such firm positions.
“It’s frustrating to see suppliers not embracing their roles in the ecosystem. Our decisions and behaviors should have a common purpose. At the end of what they do is a life – whether it’s wound care, implants or consultant services. A patient is at the end of the value chain,” he said.
Hazziez explains value for healthcare suppliers can’t be tied to their bottom lines and board members when providers’ value is safe, quality patient care. “Redefine it. Identify core capabilities and leverage them. What can you offer us to get us closer to the patient?” he asked the IDN Insights East audience. “There’s so much redundancy for services in our ecosystem. But you all have the pieces. It just may challenge your organizational culture.”