Healthcare entities have long been behind the curve when it comes to supply chain success. But in recent years, I have noticed we are beginning to “turn the corner,” and focusing on equipping our organizations and people with the resources and knowledge to elevate the supply chain as a strategic driver of change. At the forefront of this movement, the Association for Healthcare Resource and Materials Management (AHRMM), the premier membership group for healthcare supply chain professionals, began an initiative several years ago built around CQO – Cost, Quality and Outcomes.
Supply chain is now at the intersection of CQO and is best positioned to be a champion of it within their organizations. As such, supply chain professionals should understand and teach the importance of CQO to physicians, stakeholders and other supply chain employees. In a fee-for-value world, progress towards true CQO is absolutely critical. It’s never been a better time to be a supply chain professional. With that in mind, what are some of the foundational capabilities that will best position your healthcare supply chain organization for success?
- Analytical Excellence – Understanding links between cost and clinical outcome is impossible without advanced data, analytical and reporting capabilities. Appropriate, applicable data forms are the foundation for financial clarity and also provides the evidence to tie together clinical and operational functions so that all those involved can see the true picture from both aspects. Investing in and utilizing high quality data and spend analysis tools is imperative to reducing costs and maintaining clinical outcomes.
- Infrastructure for Physician Collaboration – Effective physician collaboration depends on specialized technological, political and administrative capabilities. Physicians must have a “seat at the table,” from the outset so that they can understand the tools, processes and challenges that affect all decisions. Physicians and others will be better able to support any initiatives because they have collaborated from the outset through collection and analysis of data, identifying opportunities, vendor selection (if necessary) and strategy development. Success depends on their full confidence in the integrity of the process and their voice in determining acceptable solutions. Above cost, their primary concerns include maintaining quality of care, quality outcomes and product/process choice to suit patient needs.
- Value-Oriented Culture & Processes – Understanding cost implications of clinical decisions across the care continuum is an indispensable capability in new markets. The ultimate focus should be on patient and clinical benefits, with savings as a secondary consideration. What you will find in most cases is that if you also keep an eye towards minimizing variation in product, service and process, significant savings will be achieved as well. A value-oriented culture which involves stakeholders throughout the organization allows supply chain to be an equal partner in important decisions. Goals must be closely aligned throughout the organization, which allows for leveraging shared strengths and encourages growth and expansion across the continuum of care.
- Collaborative Supplier Relationships – “Beating up” suppliers on price is a profoundly limiting strategy. Success depends increasingly on creative, collaborative partnerships. Suppliers reward commitment, so focus on a contracting strategy and portfolio where volume will drive pricing, especially in the case of commodities. Develop appropriate relationships with suppliers that support your mission, vision and values and endeavor to use suppliers as extensions of your teams and capabilities.
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