CSC’s – A Platform For Supply Chain Innovation? PDF Free Download

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Health System Insights – 2018 CSC Survey 62 health systems in the U.S. and 6 internationalinvited– estimated over 70 currently in operation– 23 Health systems (35%) submitted responses Online survey - 49 questions Completed April to June 2018. Questions grouped under :––––––Health system profileCSC operations scopeFinancial benefitsTechnologyDisruptive factors in healthcare supply chainsMetrics Copyright All Rights Reserved

Why are they doing this? Mergers & Acquisitions - present opportunity; pressure todemonstrate benefit Eliminate duplication of assets, expense Economies of scale; maximize productivity of all assets Can be less costly than historical model – inrightsituations No longer untested model; limits riskiness, SAVES Supply Chain - a source ofinnovation funding Copyright All Rights Reserved

Proactive approach to take control of supply chainStandardizationCommitmentContracting CentralizationLast MileAdministrationInfrastructure and innovation investmentsTechnology investmentsPeople investmentsClinical engagementChange management Copyright All Rights ReservedManage POUInsights

Perception of Single, Best CSC Model is a MythFunctionalScopeWarehouse and fulfilmentPurchasing and Accounts PayableCost SavingsService ImprovementVisibility and ControlClinical SpaceNumber of facilitiesLocationsType of FacilitiesCSCMotivationProductScopeBut there arecommon themesthat drive valuewithin themodelGeoScopePartnerModel Copyright All Rights ReservedDrugs and PharmaMedical and Surgical DevicesMedical ConsumablesNon Medical SuppliesDistributorsProcurement OrganizationsThird Party Logistics PartnersInsource

Inputs on supply chain innovation and igenceAugment current supply chainHome care customersNon acute deliveriesTail spendCould challenge reliance on GPO’sWill not replace robust and complex modelsnecessary in large IDNs.Positive applications for pedigreemanagement and asset managementPotential messaging and integration of supplychain participants.Long term is it critical to supply networksecurity.An interesting solution still looking for a problem tosolve.Becomes more attractive with labor costs andconstraints.Drones being looked at for lab and drugdeliveries across large campusesImportant that CSC’s not get caught up in expensiveautomation solutions – especially at POU.Pharmacy and acute care may be the least impactedfor a while.Still too difficult for most to comprehend let aloneput into practice.Good applications on sourcing and demandthat will allow us to better manage bothinventory and laborElectronicMedical RecordKey to real world evidence for effectiveness base for negotiation on product value.More seamless integration between ERP’s /EMR’s will come over the next 24 months.Changes to equipment and ERP that are driven tosupport the EMR usually not considered whenscoping the cost and impact of implementation.ProviderConsolidationScale is important; aggregation of spend /commitment to suppliers more important. Soare execution and discipline.As we acquire we must have solid intake andon-boarding processes to be efficient.At some point this will hit a negative economy ofscale for the supply chain. Copyright All Rights Reserved

Plans to support home delivery Convert from internal focus to an external (patient) service and shipping logistics capability.Integrate the current supply chain to include physician orders for patient home use.Regulatory requirements for DME and Homecare licensureDisruption (Walmart, Cigna, Humana) dis-intermediating hospitals from patientsHIPAA requirementsManage formulary as care moves away from acute and managing clinician expectation is key. Copyright All Rights Reserved

Potential to extend/”commercialize” CSC operationsConditions to succeed Need clear rules of engagement and alignment on objectives. Need partners that are willing and must be a good fit bothways. Sizing has to be correct (number of facilities) and leveragingpartners to find right core services at price you can afford. Agreement between systems to cooperate in costcontainment even if they compete on the care side of thebusiness. Standardization of SKUs and products. Geographic overlap and executive support.Those that did not see the potential raised the following issues: Need to become a ‘distributor’ and not a supply chain.Different set of skills, focus and problems with limitedmargins. The investment is not something I think a hospital networkwants to make outside of supporting their own members. Our system must be considered the priority. Revenue is notworth the risk. Copyright All Rights Reserved

Would you consider outsourcing to a 3PL? What benefits would you expect a third-partylogistics provider to bring to your operations?––––– More efficiency, more effectiveness and costsavingsAccess to talent, tools and leveraged resources.Expertise that we do not have internally.Capital investment supported by the third partyTechnology to smooth out and better predictdemand.Key attributes you would expect to seefrom a 3PL–What are the likely disadvantages ofoutsourcing?––––– Loss of control and in ability to manage costExpect it would be higher costLack of integrated cultureInability to be as nimble. Competing priorities.Potential labor / union issues–––––––– Copyright All Rights ReservedTechnology and the ability to understanddifferent health care providers.Performance based agreementCommunication and service evolution tomeet changing needs.Flexibility to change as health systemneeds change.Fixed or capped cost model.Specific quality metrics and KPI’s5-year plan showing improvement in KPI’s.Cost and operational efficiencyGuarantees around product availability.

Benefits From CSC ImplementationCOST REDUCTIONS; savings can help fund other innovationIMPROVED SERVICE LEVELSINVENTORY REDUCTION, OPTIMIZATIONVISIBILITY AND CONTROL Copyright All Rights ReservedPRODUCT, SUPPLIER, PRICE, CONTRACT STANDARDIZATIONFREE UP REAL ESTATEECONOMIES OF SCALE, LEVERAGEFOUNDATION FOR SHARED SERVICES Copyright All Rights Reserved

Disruption (Walmart, Cigna, Humana) dis-intermediating hospitals from patients HIPAA requirements Manage formulary as care moves a