VHA Inc., the national health care network, polled members of its 20-member Large IDN Supply Network ("LISN," pronounced "listen"), which includes many of the nation's largest health care organizations, asking them to identify their top concerns and actions they hope to take to accelerate change.
"Based on our survey results, health care reform and its resulting mandates have definitely sharpened the focus in the C-Suite," explains Mike Duke, VHA senior director, national supply chain services. "This survey clearly indicates that reducing costs is the top priority, followed by enhancing the patient experience and improving clinical outcomes -- all of which are essential to providing quality health care."
Duke added that the health care systems' executives agreed that big gains can't be achieved by just cutting back on staff or services. "Our top leaders know that the next big changes will come from quality improvements to streamline processes while increasing services to better serve patients."
LISN consists of supply chain management leaders at VHA's largest member hospitals and health care systems, including Allina Hospitals & Clinics, BJC HealthCare, Mayo Clinic, Partners Healthcare, Providence Health & Services and Sutter Health. In aggregate, they represent approximately $8.6 billion in health care supply spend between VHA and Novation, VHA's contracting company. (Please see full list of LISN members below).
According to Bruce Mairose, vice chair of supply chain management at Mayo Clinic, "This unique group of the nation's largest health care systems demonstrates that by working together, health care organizations can focus on cost management strategies that will ultimately benefit our patients. We are taking on important and complex initiatives in order to address clinical and operational objectives that have been placed on health care providers.
"While every health care facility or system faces challenges specific to its local markets and its readiness to address reimbursement challenges, we know we have valuable insights we can share with one another. We understand the immediacy of the changes at hand and are sharing knowledge we can collectively use to move the needle on improvements more quickly."
Closer examination of the survey data reveals what the leaders believe will be the key drivers for the next wave of significant change. Approximately 71% of the survey respondents believe the biggest gains will come from improving process and workflow, as well as improving utilization of supplies and services. Approximately 57% also cited reductions in practice variability and 43% noted price reductions in physician preference products, including mechanical hips, knees and the latest pacemakers.
Akin to the challenges faced by the high-tech industry in the '80s, the VHA survey indicates that top hospital administrators expect quality improvements to better their bottom line.
"Reviewing and understanding variability in practice, and the variation in underlying support processes is key. Identifying and reducing unwarranted variation can simultaneously improve quality and reduce overall cost. It's a double win," explains Cheryl Harelstad, vice president of supply chain for Allina Hospitals & Clinics. "The survey also points to the focus on improving utilization, including reducing waste, as a key cost saving measure."
Jody Hatcher, president and chief executive officer of Novation, VHA's supply contracting company, works closely with the LISN group and agrees that cost reductions in physician preference products stand to have a significant impact. "Price leadership remains Novation's top priority, while benchmarking and pricing transparency are more important than ever before. Supply costs are second only to labor costs in terms of large expenses. With positive patient outcomes as their focus, hospitals would rather lower supply costs than cut much-needed staff," he explains.
To this end, survey respondents indicated that enhancing the patient experience and improving the continuum of care to yield better clinical outcomes is their ultimate goal.
"We at Mayo believe the needs of the patient come first and we can't lose sight of that, even as we face the most formidable financial pressures in our history," says Mayo's Mairose.
"The faster we can drive improvements and lower costs, the greater the access and quality of care we can deliver to our patients," says Dennis Maher, vice president of supply chain at Sutter Health. "We touch the lives and wellbeing of our patients so we have a lot on the line. The supply chain is truly an area where we can make a significant difference to our organization's agility and ability to sustain its mission during times of great change."
VHA member hospital and health care systems participating in LISN include:
Allina Hospitals & Clinics Baptist Memorial Health Care Corporation BJC HealthCare Cedars-Sinai Health System Indiana University Health Lehigh Valley Health Network Mayo Foundation MedStar Health, Inc. Memorial Hermann Healthcare System NewYork - Presbyterian Hospital Novant Health OhioHealth Partners HealthCare System Premier Health Partners Providence Health and Services Sanford Health Sentara Healthcare Spectrum Health Sutter Health Yale-New Haven Health SystemLISN members available for interviews include:
Bruce Mairose, vice chair, supply chain management, Mayo Clinic Cheryl Harelstad, vice president, technology and supply chain, Allina Hospitals & Clinics Dennis Maher, vice president of supply chain, Sutter HealthAbout VHA Inc.
Based in Irving, TX, VHA Inc. is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance, and identify and implement best practices to improve operational efficiency and clinical outcomes. Since 1977, VHA has leveraged its expertise in analytics, contracting, consulting and networks to help members achieve their operational, clinical and financial objectives. In 2010, VHA delivered record savings and value of $1.7 billion to members. VHA serves more than 1,350 hospitals and more than 30,000 non-acute care providers nationwide, coordinating delivery of its programs and services through its 15 regional offices. VHA has been ranked as one of the best places to work in healthcare by Modern Healthcare since the publication introduced this list in 2008.
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