MeritCare Health System is a not-for-profit, integrated hospital and clinic system headquartered in Fargo, N.D. Founded in the early-1900s as St. Luke’s Hospital and Fargo Clinic, today it is one of the top 100 integrated healthcare networks in the nation, as cited by Modern Healthcare magazine. MeritCare is considered to be a System IV, or a “strategically integrated” IDN – the only one in North Dakota. This designation means the system is vertically integrated, with centralized structures and a highly developed IT and technology infrastructure that contributes to its success in driving compliance.
In evidence of its IT sophistication, MeritCare has been named to the list of the 100 “Most Wired” healthcare systems by Hospitals & Health Networks magazine for five straight years. It is one of only 15 systems in the nation to have been named all five years. MeritCare Health System boasts the largest hospital in North Dakota and the only NACHRI certified children’s hospital (MeritCare Children’s Hospital) in the area between Minneapolis and Denver. The system, which also manages three hospitals, has over 1.5 million patient visits per year. MeritCare’s supply chain includes a hospital in two metro locations in Fargo, N.D., with 583 cumulative beds, 11 metro locations, 22 regional locations based in eastern North Dakota and northwestern Minnesota, five dialysis centers and two ambulatory surgery centers.
JHC spoke with Paul Swanson, executive partner, materials management, and Craig Hewitt, executive partner of information systems, to discuss their experiences as the only System IV IDN in North Dakota.
JHC: What is the driving force that led to the development of a System IV-level of integration in a North Dakota system?
Paul Swanson: The integration of materials management at MeritCare was the visionary insight of Roger Gilbertson, M.D., MeritCare’s president and CEO, and our senior management. The 1993 merger of St. Luke’s Hospitals MeritCare and the Fargo Clinic MeritCare consolidated supply chain activities, which includes purchasing, receiving, warehouses, distribution and our print center. We also developed an internal online requisition system for efficiency of inventory supply requisitions.
JHC: Talk about your technology vision and how it brings your system together. Has it produced significant cost savings?
Craig Hewitt: MeritCare’s technology vision is driven by an enterprise strategy, which provides for vertical integration among all areas of our integrated health delivery network.
The core components of the networked organization that MeritCare strives to be is composed of a core set of enterprise system applications that provide for the collection and distribution of information as close to the point of patient care as possible. Also supporting this is a series of enterprise administrative support systems that offer digital services and support to those providing direct and indirect patient care or in support of those areas.
This vision, and the services that support the vision, has allowed MeritCare to drive out costs in various areas of the organization, such as reducing our transcription costs and eliminating supply expenses related to radiology films. It also provides for improved workflow with information more readily available for clinicians and non-clinicians at MeritCare.
JHC: Who are your purchasing and distribution partners?
Swanson: We have been a member of Novation since 1986 and utilize them as the prime GPO. Owens & Minor serves as our Novation ADA (authorized distribution agent). Most of our medical/surgical supplies are distributed through one source. This allows for maximization of lines to produce purchase order and delivery efficiencies. We review any existing GPO contractual agreement vs. a possible individually negotiated contract and utilize the most financially advantageous contract for MeritCare. We also contract through Amerinet.
JHC: Who is your e-procurement partner and what are your plans for this area?
Swanson: As a Novation shareholder we utilize Marketplace@Novation. Our intention is to expand utilization of e-procurement to additional vendors. We are working with Marketplace to achieve the necessary connectivity.
JHC: How do you conduct product selection?
Swanson: Product selection is a function of product quality, technology, patient and staff safety. We also incorporate the OSHA Safety Engineered Product requirements in our selection process. MeritCare utilizes a Value Analysis Committee in product review and selection. The committee is composed of three physicians and 18 employees representing disciplines from clinical, surgical and inpatient and outpatient areas of expertise. Selections of products that are proprietary to specific areas are a team effort of procurement and teammates representing identified areas. Both methods review GPO contracts vs. specific MeritCare-negotiated contracts. Additionally, we include physician partners in the process when their expertise is essential.