System Director of Sourcing and Vendor Management at SSM Health
April 2024 – The Journal of Healthcare Contracting
Initially, Mike McDonough didn’t know what he wanted out of his career. When he was a junior in college, McDonough started looking for internship opportunities in different industries. He was fortunate enough to intern with The Resource Group (Ascension) as a supply chain analyst. “The internship was an amazing experience, and I immediately knew I wanted to find a role in healthcare,” said McDonough. “And I haven’t looked back since.”
McDonough’s favorite aspect about working in healthcare supply chain is being able to interact with internal and external stakeholders to solve complex challenges and explore new opportunities. “I believe it is important to have some knowledge of all the various aspects of our business; however, it’s impossible to have all of the answers,” he said. “Having the ability to build and maintain relationships with key stakeholders and vendors creates an avenue to quickly overcome obstacles and determine what opportunities to focus on.”
At the end of the day, everything a supply chain team does is focused on the care and healing that they are delivering to the communities they are blessed to serve. “You don’t get that outside of healthcare delivery,” McDonough said. Indeed, outside of healthcare delivery the focus is on generating shareholder value, outperforming analyst projections, or driving operating profit at all costs. “Knowing our work is positively impacting lives and communities is extremely rewarding.”
McDonough serves as the System Director of Sourcing and Vendor Management at SSM Health, which provides exceptional health care services to communities across Illinois, Missouri, Oklahoma and Wisconsin. The IDN has a centralized sourcing contracting function, and supply chain is responsible for all non-FTE labor expense for the organization.
Over the last few years, he and his team have driven a lot of change and clinical alignment throughout the organization to establish a strong foundation to enable long-term, sustainable success. Early in their journey, they focused on developing and standardizing various processes and implementing enabling technology solutions. Through these efforts, they implemented a contract lifecycle management solution, transitioned to a new GPO partner, standardized their request in-take and implementation process, and developed end-user engagement structures through Solution Groups and Value Optimization Teams.
“Each of these initiatives had a positive impact for our system; whether that be cost savings, gaining efficiencies, reduction of unnecessary variation, supporting standards of care, or enhancing collaboration,” McDonough said. This said, collectively, their efforts have allowed them to redefine the vision for their function and quickly become a department others look to as a strategic partner within the organization. “Since we’ve implemented these changes, we’ve increased the annualized value our function is providing by over 400% annually.”
Solution Groups
Overall, McDonough and his team’s goal is to develop supply strategies necessary to support the delivery of exceptional health care services while being good stewards of their resources. The Solution Group structure provides an avenue for key stakeholders, including clinicians, to participate in the decision-making process. “As we review a specific product category, we rely on our Solution Groups to identify the product attributes necessary to provide care and safety for our patients, caregivers, and employees,” he said. “Our team then negotiates the best value for the suppliers and products that meet those defined attributes.”
Reducing unnecessary variation will be key to improving outcomes and providing value-based care, he said. Solution Groups are their way to align with end-users to accelerate this work within the organization. When reviewing a product or service category, the intent of this structure is to have the users of the product or service discussing their needs amongst each other – while support departments provide key data elements as necessary – and collectively finalize a decision for the system. “Essentially, we are creating a collaborative, transparent environment that allows us to partner with key stakeholders to develop clinician/user led strategies for our organization,” McDonough said.
This is not necessarily a new concept within the industry, however one that is often overlooked. “An article that resonates with me when thinking about this work is ‘Integrated Practice Units: A Playbook for Health Care Leaders’. In this article, Porter and Lee shared: ‘How individuals are organized to do their work matters profoundly. Excellence is not defined by the performance of individuals, but instead by the expertise, integration, and coordination of a team with clinicians who can learn as a group from past performance and best practices.’ Our hope is that our Solution Group structure provides an avenue to coordinate and advance this work for our system.”
Journey to value-based care
Two trends that McDonough is keeping an eye on in 2024 are artificial intelligence and advanced analytics. “I believe AI will play a critical role in transforming various operations and reducing costs in our industry,” he said. “There are so many potential use cases for AI and we are just beginning to understand these capabilities.”
Regarding advanced analytics, having actionable data is key to success. It’s no longer acceptable to just look at the upfront cost of a product, McDonough said. Leveraging cost per case analytics, clinical and outcome data, and reimbursement information will be key to developing sustainable strategies. “It will be important for our organization to utilize this information effectively and transparently as we continue our journey as a value-based system of care,” he said.
McDonough believes SSM is well on its way to meeting that goal. “SSM is a fantastic organization,” he said. “I’ve worked for non-profit, Catholic health systems my entire career. It is extremely motivating and rewarding knowing the work we do every day is for the benefit of the communities we serve rather than the bottom-line. “
Ultimately, the people at SSM make it a special organization to work for, he said. “Having a strong workplace culture is key to our success and we are lucky to have so many talented individuals on our Supply Chain team and across the organization.”