Strategic Sourcing Sr. Category Manager, Surgical,
Kaiser Permanente
August 2024 – The Journal of Healthcare Contracting
Nestor Jarquin is part of the Supply Chain Services organization at Kaiser Permanente, leading surgical sourcing for the direct spend sourcing team. He oversees sourcing for most of the company’s basic surgical equipment, except for specialty products used for orthopedics, spine, and cardiology. Jarquin manages several teams that are responsible for reviewing specific products and product categories to ensure that sourcing decisions are aligned across different areas of the organization. He has been with Kaiser Permanente for almost 17 years.
What got you interested in a career in Supply Chain?
My role today is different than when I first started my career in Supply Chain. Initially, I was a director in hospital-based materials management.
Instead of executing contracts or handing up contracts to clinicians and saying, “Hey, here’s the new glove you have to use,” I enjoyed experiences where I worked alongside physicians or clinicians to understand their requirements, source products that aligned with their needs, and executed a plan. Unbeknownst to me, that really was how Kaiser Permanente operated.
I had an opportunity to work this way in one of my prior roles and had enjoyed it. I worked with a surgeon, sourced alongside them, sat in on cases, and was able to see first-hand that side of the business. I went back to my day job and thought, “I’m not having fun with this anymore. I really want to try that.”
So, I found a position at Kaiser Permanente in Supply Chain, which is really the other side of the spectrum. What I appreciate most is the connectivity to physicians and clinicians, and driving quality together. This makes my role more meaningful because we’re focused on the patient.
What are some recent projects that have crossed the finish line and been deemed a success for Kaiser Permanente?
My most memorable project was creating a new business model for surgical custom packs. When we analyzed value and costs related to how each manufacturer put their line items in the pack, we were able to create a model that worked for the market. We asked our vendors to be fully transparent with their costs, including extricating overheads, shipping, and profit from line items to get true line-item pricing. And, working with our vendors, we’ve been able to create a model where we now have transparency – we know the line item costs for each pack, and have a collaborative relationship with our vendors.
In our new vendor contracts, we look at KPIs and SLAs that encourage this mentality. Our custom pack now drives efficiencies, both cost and environmental, in terms of waste. This was an evolution and industry shift in custom packs. Our vendor now uses this model with other customers. It was a situation where the market really didn’t lend itself to driving efficiency, so we had to work closely to help make a shift.
What about new and upcoming initiatives?
We are now taking a holistic perspective and looking at utilization, instead of purchase. With our collaborative model working with clinicians from beginning to the end, we share the data, the category, and have a discussion about the opportunities. Quite naturally in those discussions, clinicians realize that they wish we would use more of this than that, or that we used this technique instead of that technique. So, what we’ve launched over the last few years is a new process called value-based use, where we can look at a category and drive efficiencies that improve quality and reduce cost.
We are also taking a close look at utilization, beyond purchase costs, because quite honestly, your purchase data is an after effect. It’s the utilization in the OR that is where your cost is – what is brought into the OR and what is used in a particular case. The alignment with our clinicians and physicians allows us to effectively pursue these utilization opportunities.