By Julius Heil, President and CEO, Intalere
More than sharing a name and a logo, health systems should truly strive to collaborate and get organized. Integration must be more aggressive and forward thinking, aimed at consistency in care, standardization and centralization of data, purchasing and financial systems, and most importantly culture.
As a simple, yet effective example, Intalere member Miravida Living (formerly Lutheran Homes of Oshkosh) is a system providing a full continuum of housing and healthcare services for elders and others in need. As it continued to evolve and grow, the organization was challenged with combining the purchasing efforts of its multiple locations. Each facility within the Miravida group was managing their purchasing separately. This led to multiple inventories and an inefficient use of manpower, and did not take into consideration optimizing volume purchasing to bring down pricing.
In undertaking their streamlining initiative, there were many objectives to investigate and implement. Among the most pressing:
- Consolidate purchasing efforts.
- Build and maintain a central inventory.
- Create a method of tracking product usage and location.
- Ensure the correct inventory usage is applied to the proper department.
- Standardize product choice and consolidate purchasing to take advantage of opportunities for volume discounts from suppliers.
- Decrease labor hours as it relates to purchasing.
- Reduce hard-copy output connected with the manual purchasing system.
Working with Intalere and a supplier partner, Miravida was able to use a single procure-to-pay system across their entire campus. Since the launch of the program, Miravida Living realized an initial reduction of 1,300 hours related to the purchasing process, an annual savings of $30,000 in labor spend. They saw a 51 percent increase in contract utilization, resulting in an increase in rebates and an approximate reduction of $517,000 in price paid for goods.
The need to “Act Small” may seem a bit at odds with the above achievement to “Operate as a System,” but it actually is a significant building block on the way to integrating standardization and best practices. It speaks to agility, daily meetings and huddles, and basic operational rigor in services offered including surgery, pharmacy and emergency.
The idea is that small businesses must be much better at what they do on a daily basis because their margin of error is generally extremely thin and their mere survival depends on it. They have to pay attention to every detail, have a very close grasp on their financials, strive for consistency of service and focus on common incentives. Along with this, they must be able to adapt quickly to changing market forces, competition and any other fluctuations.
Larger organizations must understand, essentially, that the details matter, and that they may seem innocuous and challenging at first glance. However, adhering to them and demanding the same from the entirety of the organization can pay off significantly in better bottom line results.
Check out the latest video, Operate as a System, But Act Small, in our Flash Series and stay tuned in the coming weeks for more posts and videos about 12 Things Healthcare Must Achieve.
You can also download the executive briefing at Intalere.com.