One problem with bringing digital transformation and other positive change to strategic sourcing in healthcare is knowing where to start. That's even more of a challenge for new supply chain leaders. When it comes time for an important contract renewal, they have to start the project with questions like these:
The answers are out there. It’s a matter of finding them.
One new vice president of supply chain successfully launched a strategic sourcing transformation, starting with a new joints contract. He was part of a large nonprofit health system serving over 80 communities from over 400 locations. The system’s physicians collectively do thousands of joints, representing millions in implant spend.
The rest of this blog covers the problems the health system faced with the joints contract and how they overcame them. You’ll find eight good tips for strengthening your strategic sourcing practices around implants and medical devices. The recommendations are based on the real-world experiences of this healthcare system.
The supply chain faced lots of challenges when it came to revamping the clinical spend process. For one thing, the joints contract hadn’t been renewed in three years, and last time it didn't go very well. That experience left the supply chain apprehensive about sharing data with busy physicians and making practice-impacting recommendations.
There were other problems as well:
The eight best practices described below helped turn the strategic sourcing problems around.
Health systems that need to renew a contract, but don’t have the staff for it (either due to lack of skills or lack of bodies), have a couple of options. The supply chain leader might choose to extend the renewing contract as is, but a more effective option is to outsource to strategic sourcing services to professionally manage the renewal.
In this case, the organization chose to partner with external strategic sourcing experts who in turn worked with Curvo enriched data and spend management platform.
For supply chain VPs, directors, managers, analysts and others, the most important thing is to have the facts straight about your medical device parts. You might not get a second chance with skeptical clinician audiences if poor data trips you up.
This means building and maintaining a clean, current item master with these basics:
Before doing anything else in a contract renewal, someone must gather this information and make sure it’s correct. That’s another reason Curvo Data Enrichment was part of the contract solution for this healthcare enterprise.
The vice president turned to Curvo for enriched data and an established consultant to put data to work to implement the contract. (This model allows data enrichment consistently at scale for the many implant and PPI contracts SCM must do in a year.)
Cleansed data relevant to the joints contract brought insights like these together in one place:
Whether outsourcing a contract renewal or managing the process in-house, the product information has to be reliable because it generates political capital for the project. You want to create an appetite for change, and that means you’re relying on a trade. You're giving clinicians something in return for them caring about the data-driven clinical spend story.
In the case with this healthcare system, a “report card” showed doctors insights about how they actually used certain implant devices, and the physicians valued this information. The doctors wanted to know if they were $1,000 higher than the average doctor in their hip joint implant, and they wanted to know why. They also wanted to know what to do to fix it for the good of the organization.
Download a copy of this case study to share these strategic sourcing best practices with your colleagues.
“When I set an 80% outreach goal for the red vendor (a specific device supplier), it was because I knew we would have to pound them,” said the supply chain leader. “We can really take it down into those very detailed levels of knowing.”
In this case, the vice president soon learned:
Taking what he’d learned, the executive met with every chief medical officer, chief nursing officer and surgeon group performing these procedures – all within a two-month timeframe. Why? Because he believed in the story the data told.
The Supply Chain VP wasn’t just motivated by the fact that he saved his organization $4 million, and that the number one device supplier was locked out as a sign of solidarity. He cared that hospitals in the health system felt someone was paying attention to them, and that they were getting something back. Some hospitals and doctors said no one had ever reached out. The physicians backed him because they had faith in the information.
To be honest, some clinicians may be dismissive of the data no matter what, and supply chain leaders should expect a little of everything from clinician responses. That makes it even more important to be fully confident in your story and to reach out to as many clinicians as you can.
Being assured starts with trusting your data, but it also requires a solid presentation. This valuable advice comes from those who have been through it: Rehearse your contract renewal story. Although presenting to a skeptical group can be one of the toughest parts of the SCM job, the payoff is worth it in so many ways.
By investing in the accuracy of the contract story, and telling it professionally and with clarity, the supply chain leader reaps organizational benefits that include:
If it’s time to really get serious about strategic sourcing and data enrichment, start with a Curvo test drive.