5 best practices from U.S. Supply Chain leaders to carry healthcare forward
While the role of supply chain leaders had been steadily extending beyond the hospital and into the non-acute care (e.g., clinics, physician offices, long-term care facilities), COVID-19 forced a sudden and significant leap in responsibility.
Non-acute facilities found themselves on the frontlines of the pandemic, facing patient surges and significant demand for personal protective equipment (PPE) and other supplies as they perform testing, provide treatment and administer vaccinations. Support from supply chain has been critical to the success of the non-acute continuum.
What has supply chain learned from this experience and what best practices will they carry forward?
McKesson recently hosted two virtual forums with U.S. healthcare supply chain leaders to learn how they have been managing the new realities of the non-acute supply chain. The forums featured three panelists: Sean Poellnitz, vice president of supply chain at Mosaic Life Care in St. Joseph, Mo.; Darrick Adams, director of non-acute supply chain at AdventHealth in Altamonte Springs, Fla.; and Tyler Ross, director of supply chain operations at Novant Health in Charlotte, N.C.
They collectively explored what’s worked/hasn’t worked for their organizations, and what lasting changes must be made to strengthen non-acute supply chain resiliency in the future.
Here are five key learnings from the sessions.
1. Care is shifting, and skills must shift with it
The pandemic has placed a significant burden on non-acute, but it has also presented a unique opportunity to accelerate the expansion of care beyond the hospital – something the industry has been working to achieve for quite some time.
As supply chain leaders have been increasingly called upon to support the non-acute, it has brought to light how the role must evolve: the need for new strategies, talent and skills to support the expansion of care. A growing number of organizations are appointing dedicated non-acute supply chain leaders. Among forum participants, 50% said yes, this role existed before COVID; 10% said yes, new as a result of COVID; and 40% said no.
Poellnitz described the need for supply chain talent that can support shifting care models:
“Do I have the business case to invest in the right talent to support new and emerging healthcare models? The seeds are planted and they’re growing. We need to ask the right questions to support long-term growth. What are the partnerships and technologies that will fuel that growth?”
Forum participants pointed to specific skills required of non-acute supply chain leaders: strategic sourcing abilities, lab/diagnostic testing support, and capabilities to manage products/services to support new care models, such as hospital at home.
Several participants described their shift to support hospital at home programs and more assisted living and independent spaces/services to meet growing community needs. From contracting with home mobile imaging providers, to converting skilled nursing facility bed licenses for assisted/independent living use, the mix of products/services to support both of these areas are much different than hospital/SNFs.
Poellnitz, who worked in transportation and defense supply chain before entering healthcare, says the profession needs people with real world experience regardless of the industry.
“The question is no longer, ‘do you have healthcare experience?,’ but rather ‘can you source products?’ If you can source, we need you. It doesn’t matter what industry you come from. It’s more about finding talent who can get things done.”
2. Trusted relationships serve as a safety net
Traditionally relationships in healthcare have been wrought with competition and distrust. Suppliers are seen as trying to get the most money out of providers, while providers are seen as trying to squeeze every last penny out of prices. Among healthcare organizations there is competition for patients and a reluctance to share information, let alone resources.
When the pandemic hit everyone had to put aside their differences for the greater good. As panelist Tyler Ross stated: “It wasn’t provider versus supplier but rather everyone coming together to help America win.”
Forum participants agreed that the industry must maintain and even strengthen these relationships long-term and not fall into old ways of thinking and operating.
Panelist Darrick Adams described how his organization is opening its first physician offices for patients aged 65+. They worked with their distribution partner to establish a standard list of items they need to open those sites. Now, anytime a new site opens, he can bring up that “shopping list”, adjust quantities based on the individual site and have the products shipped to the facility.
“Our organization has been active with thinking ahead to what the care landscape will look like,” said Adams. “We already have better processes in place through our work with our distribution partner that will help carry us forward.”
3. Preparedness takes visibility and data
As we have all witnessed, the shift from just in case to just in time inventory management backfired in the face of pandemic supply shortages.
“Overnight it wasn’t about us being this lean supply chain anymore because lean is risky,” said Poellnitz.
Adams explained how one of his system’s 14 medical groups bought huge amounts of a product when COVID hit, leaving the other groups with a drained allocation.
Participants stressed the need for real time visibility into supply chain and business intelligence, including dashboards to make informed decisions. Those teams that already had this type of capability were more successful in acquiring needed supplies.
Poellnitz’s team experienced frustration when trying to perform predictive analytics finding there was “no hard science to it.” When he was asked, “do we have supplies?,” he realized the real question should be “can we create the right business models to forecast risk?” He is currently working with finance to develop dashboards to address this need.
Ross said his team is developing robust planning and redundances to future address shortages as they arise:
“I hope coming out of this we move from traditional just in time methodology for inventory management and product availability. Just in time is important but again we’re not retail, so we need some sort of safety valve to absorb disruption.”
To better prepare supply chains to weather future challenges, the participants agreed that supply chain leaders must have a seat at the table to help develop and implement preparedness plans.
4. Safely expanding the scope of suppliers
The leaning of inventories and standardization of supplies positioned the U.S. healthcare industry for disaster in the time of crisis.
When traditional supply sources dried up early on in the pandemic, providers began searching for alternatives. There are countless stories of supply chain leaders desperately ordering N95 respirators from unknown companies never to get the products or receiving products that were unusable/unsafe.
Those in the forum described the challenges they faced and how they turned to distributor partners and other healthcare organizations for guidance on sourcing.
Because manufacturing in the world’s central supply hub, China, had come to a halt, many providers also turned to suppliers on-shore/nearshore to the U.S. as a more reliable channel. Participants shared stories of local distilleries that produced hand sanitizer, and textile companies shifting production to face masks and gowns. As one participant stated: “The label ‘Made in the U.S.A.’ has never been so sought after.”
Forum participants felt the trend toward supplier network expansion and a broader domestic supplier portfolio will continue. They called for greater industry collaboration among providers, suppliers and distributors where they share sourcing guidance with one another.
5. Clinical collaboration required throughout the continuum
There has been growing talk in healthcare about the need for a clinically integrated supply chain where clinicians and supply chain professionals work more closely to make informed product decisions.
The pandemic has driven greater clinical/supply chain integration as these parties have been required to work together to address supply shortages, inventory management, substitutions, etc. Forum participants believe this is a positive move and one that should expand.
Supply chain leaders have found themselves engaging with clinicians in offices, clinics and other non-acute sites where they previously had never set foot, offering their expertise, knowledge and connections.
The importance of clinical collaboration, beyond product selection, but also product usage, was discussed as a vital component in helping to conserve supplies and prevent future shortages. Having these parties work together to develop guidelines for PPE usage, for example, could reduce shortages and demand through changing clinical practices.
Conclusion
The COVID-19 pandemic forced many changes in healthcare, some that had been in slower progress for quite some time. The greater reliance on non-acute settings for diagnosis and treatment of virus patients highlighted the critical role these facilities play in the broader care continuum. It is clear that the attention on non-acute will continue as health systems invest in care sites outside of the hospital, including the allocation of supply chain resources to support their needs.
“Non-acute has been stressed with a lot of change but it is a major growth area for health systems,” said Greg Colizzi, vice president of health systems marketing, McKesson, who led the forum. “The pandemic has provided the opportunity for supply chain leaders to identify proven practices throughout the continuum that will help carry us forward.”
McKesson is focused on helping supply chain leaders navigate the new realities of managing the non-acute supply chain. The company’s mission is to be a solution to support a “care-anywhere” approach as the delivery of care continues to evolve – one patient, one product and one partner at a time.
Take the next step in building a stronger, high-performing non-acute supply chain – mckesson.com/takecontrol
Top 11 considerations for supplier sourcing
Supply shortages during the COVID-19 pandemic left healthcare supply chain teams scrambling to identify alternative suppliers with safe and effective product substitutions. Some healthcare organizations found themselves at the mercy of fraudulent suppliers that failed to deliver products or sent unusable/unsafe items.
Here are 11 questions to ask when vetting a supplier and its products:
- Does the company have proper FDA registration (e.g., proper product code, certifications, etc.)?
- Can a quality assurance audit of the factory be conducted?
- What are the options in the event of poor product quality, recall, etc.?
- What is the company’s level of product liability insurance and indemnification?
- Is there a clear and clean chain of custody (factory direct or broker chain)?
- Will product be inspected before shipment? If so, by whom?
- Are samples – not pictures – available for immediate review?
- Who will the financial transaction be with? Is this a different entity than the stated factory?
- Are there pre-payment requirements?
- What recourse is available if there are product issues or if product is never shipped?
- Who will manage logistics, customs clearance and statewide transportation?