Novant Health’s process-driven approach and integration leads its supply chain team’s solutions through the pandemic and into the future
October 2021 – The Journal of Healthcare Contracting
Supply chain costs can account for nearly one-third of total operating expenses for health systems. Clarity within those supply chains is a must and the COVID-19 pandemic highlighted that in new ways. Lack of data visibility and transparency left patients and frontline workers vulnerable as healthcare supply chains were thrown into the spotlight.
As many health systems sought ways to improve their data analytics and integration, Winston-Salem, N.C.-based Novant Health was already prepared. It had implemented a methodical, process-driven supply chain approach seven years ago to its clinical decisions. One that incorporates clinicians, manufacturers and suppliers. Novant Health’s clean data within its supply chain provides the necessary transparency and trust to its healthcare partners.
“It’s foundational to our relationships with physicians, clinicians, manufacturers and suppliers,” said Mike Bianchin, vice president of supply chain operations and distribution logistics for Novant Health. “Good data on the front end lessens the clean-ups and fire drills on the back end. We’re a collaborative partner with our vendors and clinical leaders, and we must be able to give them information that helps make informed and fact-based decisions.”
A foundation built to meet the pandemic
This data-accommodated supply chain laid the foundation for Novant Health’s response to the pandemic. Accurate data prevented wasted time and abetted the 15-hospital health system in changing tasks quickly.
“Good data equals efficiency and speed,” said Martha Bergstedt, vice president of sourcing and contract/vendor management for Novant Health.
“We weren’t worried about misinformed data and that allowed us to focus on having the correct product on hand – and enough of it – for our clinical teams,” said Kim Haynes, senior director of supply chain finance, procurement and analytics for Novant Health. “Our foundation helped us handle it as best we could. It provided us confidence in understanding what was really happening.”
Hourly changes, including which PPE should be used and how much of it should be used, were controlled through Novant Health’s data integration.
“It allowed us to work quickly with third-party vendors that wanted to help during the pandemic,” Haynes said. “Our data was clean, and we had dedicated sourcing managers with knowledge of products that could be worked into our enterprises during the pandemic.”
The supply chain team partnered with respiratory leadership to input data on all new fit-tested N95 masks for team members within the health system. A database was quickly built of team members who were fit tested to different brands of N95 masks and who chose a primary brand and a backup brand from seven distinct options.
“We didn’t get to the point of mass switching N95 masks, but we were building toward it based on our data inputs and our system approach,” Bianchin said. “We kept locations stocked based on individual clinical needs.”
Data is a regular topic of discussion
Data is always a part of the weekly conversation between the supply chain team, clinical leadership and vendors. “Working backwards on data issues is much harder than keeping it in mind from the start,” Bianchin said.
Whether it’s supply or implant cost per case or spend metric levels being met for rebate purposes, data builds trust that Novant Health’s supply chain team is focusing on the right things to better serve its patients and bring value to the health system.
Novant Health’s supply chain dashboards track cost to the physician level across all service lines. The sourcing teams use data daily to identify opportunities at the system, market, facility, service line, procedure level and physician level, according to Bergstedt.
“We’ve built numerous Microsoft Power BI dashboards to incorporate data into a live interactive dashboard for supply chain team members and non-supply team members and they can access data as needed,” Haynes said. “It also supports executive and department level meetings, presenting opportunities through data management.”
Product contracts are associated with sourcing categories and tied to transactional level items like spend, savings and utilization. Novant Health’s categorization management system captures its spend based on how it sources its contracts for medical and surgical supplies.
“Spend data is enriched with clinical outcome and revenue information, making it easier to make decisions,” Bergstedt said. It allows spend to be seen in real time and automates data for monthly calculations of savings tied to specific item codes.
“We can quickly analyze how we are performing, and report monthly realized savings,” Haynes said. “It’s a robust savings reporting, validation and tracking process.”
Novant Health’s data and processes allow the supply chain team to tell the story of what’s happening in its system, including expanding on the purchased services side where it has leveraged third parties like Modulini, a provider of clinical and financial insight to hospitals.
“Our transactional data isn’t currently connected to our contracts for purchased services like our product data,” Bergstedt said. “But it’s an area of improvement and advancement for us and the goal is to move our processes to purchased services too.”
“On the purchased services side, we’ve developed dashboards of total spend by vendor and by a facility/cost center perspective,” Haynes added. “We’re moving to a single point of entry for all requisitions and that will help us tie in spend at the time of requisition to specific contracts and also enable OCR to collect data on those invoices.”
AI and machine learning on the system level
Novant Health is also branching into artificial intelligence (AI) and machine learning through some RPA and machine learning potential use cases.
“AI is being used at the system level to help identify patterns and trends for better informed decision making,” Haynes explained. “It will be a significant part of our supply chain strategic plan for many years to come as the value it presents to efficiencies gained is evident.”
Bianchin added that a cleaner process will come as AI evolves in healthcare. “Inventory accuracy will improve, and we’ll be able to look ahead several weeks on surgery schedules and match the demand to the schedule,” he said. “Predictive ordering that’s based on patient type and patient volume will also progress.”
Bergstedt concluded that while Novant Health’s supply chain isn’t doing it yet, it’s the best path forward to harvest and optimize the immense amount of data being produced. “In the future, it will ensure our teams are able to minimize their time spent on low value activities,” she said.
Clinicians desire data integration
Supply chain shortages impact patient care, particularly in the operating room (OR). A survey of more than 300 clinicians from Cardinal Health reported that almost three-quarters of those clinicians have experienced not having a product needed for a procedure. Manual supply chain management processes emerged as a challenge as over 80% of those clinicians said they still rely on manual inventory management for some parts of the supply chain.
Clinicians answered that some advantages to automating the OR supply chain were decreasing costs, automating and advancing accurate documentation of case costs, improving charge capture, enhancing data for analytics and ordering, advancing clinical workflow, giving clinicians more time to focus on patients, reducing expired and recalled products, and improving patient outcomes.
Employing the power of data analytics is the top supply chain outcome for provider organizations. Business processes and the standardization of those processes are also highly ranked outcomes, according to a Global Healthcare Exchange survey.
Data visibility and data management help reduce operational costs and improve service levels through optimizing processes like procurement, forecasting demand and managing inventory. It also helps the contract life cycle as it gets handed off to each team from negotiation to final price to tracking of metrics.
People and processes
“We have dedicated teams within our supply chain that handle each function of the contract life cycle,” Bianchin said. “It’s built into our supply chain process and within our health system culture. We are constantly seeking the best terms for quality, outcomes and cost.”
Haynes added that multiple viewpoints and thought leaders across Novant Health’s supply chain team is the driver to their success. “It brings different approaches to the table for discussion to vet how our processes can be supported and utilized,” she said.
“The people component is key,” Bergstedt said. “The best decisions are made with data, people and processes. Have all the voices at the table being heard and engaged. That gets us to a better outcome and gets supply chain buy-in and alignment.” Diversity in roles, backgrounds and perspectives at Novant Health helps for well-rounded decisions and minimizes the unintended consequences to decisions.
“Our team – in partnership with supply chain analytics – creates, reviews and takes concrete actions throughout the life of our key agreements and categories,” Bergstedt emphasized. “Targets are set, monitored and shared with supply chain leaders, physicians and clinicians.”
Novant Health’s data integration success has resulted in significant contributions to cost savings, improved patient value, physician engagement and understanding of the need for continuous cost reduction. Its data, people and processes drive the approach to clinical immersion.