Supply Chain Strategies Needed: Fewer Elective Procedures, Higher Costs

Healthcare supply chain leader LeAnn Born of M Health Fairview learned pandemic lessons to better identify the right leaders for change, pursuing action and not perfection.

The COVID-19 pandemic was challenging for healthcare systems in many ways. But even supply chain leaders firmly entrenched in their roles learned lessons that will improve their operations for years to come. LeAnn Born, vice president of supply chain at M Health Fairview is one such leader. Born has been at the supply chain helm of this Minneapolis system since 2010, responsible for supply chain at eight hospitals, more than 40 primary care clinics, and outpatient services like healthcare transportation.

At some point the pandemic will be in the rearview mirror, but it's not there yet. "It was career changing, and it changed our industry significantly," she said. On the bright side, the pandemic brought positive strategic attention to the healthcare supply chain, even if some of those strategies were the same.

LeAnn Born is vice president of supply chain at M Health Fairview. Photo courtesy of M Health Fairview.

Lowering costs

In 2019 and before, it was already common wisdom to lower costs by using a single vendor rather than multiple vendors for the same item type. And it was best practice to engage physicians to standardize preference items. "I think the pandemic brought a little more reality to what those strategic opportunities look like," she said. In examining what was unique about an N95 respirator, the supply chain team consulted with physicians before choosing the most appropriate vendors and models. They applied this experience and learning to orthopedic total joints and products used in neurosurgery cases as well.

Learning how to identify the right leaders to speed up the decision process was vital, whether these were formally leaders per their hospital roles, or informal physician champions who could help get projects across the finish line. "We learned how to do things quickly during the pandemic," she said, whereas before it might have taken months to work through a project to achieve consensus. "The pandemic taught us to bring the right people together, and don't pursue perfection. Instead, get good enough and move forward."

Finding those leaders can be difficult. In some hospital systems, talking with one chief of surgery to make a supply change isn't difficult. "I don't have a chief of surgery. I have eight," Born said. With a recent merger mix of employee and independent contractor physicians, "there are extra steps for the supply chain I lead." Born is working to develop a more efficient structure to identify the various physician decision-makers and physician champions, to avoid needing to track down individual doctors or department in every hospital. "That's where I'm in transition, but I know some other health systems have that operating very efficiently."

Transitioning out of the pandemic

Supply chain leaders and healthcare personnel are struggling to reenergize and reflect on what happened in 2020 and 2021, as there has not been much of a break. While cost control was always a supply chain focus, the pandemic highlighted the need for additional cost controls at M Health Fairview. The lockdown meant fewer elective procedures, the very procedures that were needed to generate revenue. Born and the supply chain department are focusing on standardizing products and negotiating better contracts with vendors. They are using fewer vendors in the cardiac, orthopedic, and neurosurgery area, which is trimming costs. Plus, physicians are more engaged and understanding about the hospital's economic requirements.

In terms of negotiations, the department wants vendors to understand that the healthcare system can deliver the volume or market share needed to meet the rates offered. "I want to make sure we stay true to that commitment," she said. It also means ensuring that the system's clinical partners are involved in product decision-making and comply with these decisions. "It is important for physicians and operational leaders to understand our contracts, the commitments made, and ensure that we are living up to those commitments." That means saying no to using new vendors when the clinical requirements are met by existing contracted suppliers. It's differentiating when a clinical requirement can't be met with the existing products and supplier, versus when someone just doesn't want to use the contracted supplier.

Getting through to physicians

Identifying the right physician leaders is one task. But getting them on the phone or in the room to discuss supply issues is another. What's changed with the pandemic is that the stakeholders are now more understanding of how and why these changes are proposed, and they're responding more quickly. "We used to have to spend a lot of time gaining buy-in from people," she said. Physicians get a bad reputation for resisting supply changes, she said, but "when we engage them at the right point in time and support them with information about how and why we're doing this, I generally find that the physicians are more than willing to get engaged."

Gatekeepers like operational leaders and support staff are great at blocking physician access. "Sometimes they try to prevent opportunities to go to the physician, thinking the physician will resist it," Born said. Time is their biggest barrier and Born spends a lot of time finding ways to get five minutes with the physician. When using formal channels, the staff may want to schedule six weeks out. Through relationship-building and finding the names of schedulers, it's easier to get in. It's also easier to ask for five minutes rather than a meeting with four people. "Talk to the scheduler and say [the doctor] is open to meeting," she said. "It's building confidence in them that the doctor won't get upset if you schedule that conversation."

Once in the room with the doctor, she delivers a crisp, clear message in a few minutes. "I like to give all the background of the situation but that's not what they want," she said. Instead, she uses the SBAR formula: situation, background, assessment, recommendation.

Using data to inform in-house practices

M Health Fairview uses data to monitor contract compliance and benchmark pricing. "Where we are spending more time and achieving impressive results is through looking at how products are used and variation that exists in use of products," she said, including with the physician leaders. "This leads to some wonderful dialogue. Often, they are not aware of the difference in price for different products and are open to using the products that cost less and deliver the same results."

Physician-to-physician conversations can impact how products can be used more efficiently and effectively, saving money and with less waste. "We are not to the point of directly linking use of certain products to certain outcomes, but we can verify that outcomes are comparable or even better with the use of fewer or less expensive products," she said.

Moving into 2022

Planning for 2021 was reactionary, given the pandemic. "I feel like I've been chasing my tail," Born said. "Now we have an ability to plan efficiently for 2022 and will go in more informed." One focus is managing product disruptions and unpredictability. Container ships have not been reliable, and production lines are shutting down due to labor issues and COVID-19 lockdowns in other countries. These are product lines she never worried about before.

As a result, her supply chain team created lists of critical items they are tracking. They've identified alternative products vetted by their clinical teams. "Some of these items have alternatives that go four to five deep," she said. "Sadly, it is common that the first, second, third, etc. alternative is not available when the primary product is not available."

While M Health Fairview traditionally uses as much automation and market intelligence as possible, they are finding that the experience and acquired talent of those on the supply chain teams are more effective than the data-driven tools that worked for them in the past. "People following their gut or recognizing a trend before it becomes obvious are the types of things that are helping us get needed products today."