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Healthcare News & Information:

The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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Healthcare and Hospital Supply Chain (and Materials Management) professionals know that there are several Golden Rules that they adhere to in their daily lives. There are also 10 Commandments.

The First (1st) Commandment:

Thou Shalt Base Decisions on Safety and Quality


What separates the Healthcare Supply Chain profession apart from other supply chain fields is that lives and individuals health are at risk. In every decision that is made by anyone in your supply chain staff, first and foremost is the health and wellness of your patients. No amount of savings, and no amount of time savings is worth risking the health of any other person. Individuals that have forgotten this Commandment have face dire consequences, like having to live their life knowing that they have caused others harm (or even death), expulsion from the medical field, and even jail time. Healthcare Supply Chain professionals often deal with decisions that are based on Valuations. A collaborative valuation approach must involve physicians that will consider the value of items only after they are satisfied with the safety and quality of the items. Otherwise no real valuation would be permissive. Although there is widespread concern over the rising costs associated with the healthcare industry, as well as a reduction in reimbursements across the board , quality and safety must remain as the main goal when analyzing any products or procedures to be used in any hospital. The complexity associated with healthcare supply chain presents significant challenges when a hospital attempt to eliminate or reduce the waste in an effort to lower costs. There is no balancing that must be considered. Rather, we must prioritize- SAFETY and QUALITY FIRST, and then - all things being equal, cost savings is second.

There are 3 considerations that all supply chain staff members must remember for new products or services to be introduced to a hospital: 1. Safety 2. Safety 3. Safety
ONLY after considering all safety issues, the Supply Chain Department can then consider cost and Value.

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Second (2nd) Commandment:

THOU SHALT COMMUNICATE


Every aspect of a successful Supply Chain initiative involves communication. Hospitals with supportive leadership, a philosophy of quality, collaboration and communication is seen as everyones responsibility. Individual accountability, physician and nurse champions, and effective feedback offer greater promise for successful staff engagement in improvement activities, including supply chain initiatives. . The bottom line is that effective communicators in a hospital will help the staff understand how their day-to-day work impacts the larger mission of the hospital through a variety of ways, from engaging different groups in the medical process, to linking performance of all staff positions in the broader mission. Bundled in this mission is the idea that some employees want to advance to the next level and gain more authority and responsibility. Communication is a 2 WAY Street- Regularly Ask for Feedback Ask for physicians and clinicians' feedback about all issues, including nursing issues, on a regular basis. Encourage open discussion of the staffs everyday challenges with patient care, hospital environment, work schedules and any other stressful issues. Provide a variety of avenue to express their ideas and suggestions in a positive, proactive way, and discourage unproductive whining and complaining. Ask them what they think about the most frequent nursing challenges they deal with at meetings, through suggestion boxes, with monthly or quarterly surveys and in performance reviews. Ask for ideas and solutions, not feelings, gripes and opinions. Give physicians and nurses an opportunity to demonstrate and experience leadership in their areas of practice in your hospital.. Schedule them to attend department staff meetings, and share both positive and negative experiences. Encourage mentoring by assigning senior nurses with new staff nurses for support, problem-solving and sharing experiences. Having an understanding your staffs point of view and experiences will help ease frustration and develops communication, which will lead to cooperation and collaboration. All of which will benefit the implementation of new processes or products by the Supply Chain Department. Never underestimate the importance of developing a supportive and mutually cooperative relationship for nurses to improve morale in your hospital.

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Third (3rd) Commandment:

THOU SHALT SECURE BUY-IN


Other than the safety of the patient, no other Commandment is as important as securing Buy-In. In order to achieve Buy-In, you must appreciate Buy-In. Why should the physicians agree to use other processes or products? Why should nurses and other clinicians consider changing their daily routines? Why should the cleaning staff care about saving money?

An unsupportive physician, clinician, or other staff member can be a weak link in your Supply Chain, and cause irreparable harm. Collaboration is the key. If you have reasons for change, the reasons need to be discussed, explained, understood, and eventually agreed to. Your staff needs to know why the new process or product is better, what is expected of them to make it better, what is in it for them and how they will benefit. All too often employees are handed what they believe to be orders or mandates with what they believe to be a lack of communication, which they also believe is a lack of care or understanding. If they knew cost cutting measures were being implemented in response to the hospital dealing with economic issues, they may be better able to understand and cope, as they see it, with the changes. Sometimes what is in it for them is saving a fellow staff members job, or even their own. If the benefit is mostly financial, your hospital may need professional help in developing a strategy in dealing with a staff that has been somewhat complacent over the years, and is having a hard time dealing with economic realities of reduced reimbursements and rising costs. Hospitals confront challenges with regard to nursing involvement, and sometimes have difficulty engaging nurses at all levels. Everything from bedside to management; growing demands to participate in more, often duplicative, quality improvement activities; the burdensome nature of data collection and reporting. Securing their Buy-In is absolutely necessary for actions or programs undertaken by any The most important things that any hospital administrators or Supply Chain Staff can do to insure Buy-In is to do the following: Let your entire staff know their input is important Consult everyone who will be affected by decisions Minimize time burdens on your staff Report back to everyone who gave ideas or input Invite Important Individuals to Staff/Value Analysis meetings

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Fourth (4th) Commandment:

THOU SHALT HAVE A PLAN, AND STICK TO IT


Supply Chain Experts do not agree on everything, but most agree that a hospital, like any other organization, must have a Plan, and from there strategies can be developed and implemented. The Plan must be supported from the executive level through the ranks if staff is going to be expected to follow and implement the various tasks involved in the day-to-day operations. A plan to fully realize targeted savings opportunities will require multiple strategies new and more aggressive approaches to contracting, improved contract compliance, establishment of supply formularies and formulary compliance programs, etc. All initiatives whether pricing, changes to commodity/low-risk products, or physician preference items need to be prioritized based on timeframe to actualize savings. Even what may appear to be quick hit pricing initiatives may require time to actualize. And, some pricing issues may actually require changes to physician prescribing practices. Aligning degree of change difficulty and timeframe to realize savings need to be carefully planned and monitored.

A Plan should also have the following:


Realistic Goals Implementable Solutions Flexible Rules and Guidelines Performance Targets Measurable Results Prioritized Categories Time Considerations and Deadlines Communication and Ongoing Dialogue Training or Professional Assistance Leadership Support Performance Evaluations

Consultant Assistance

All Plans must have Realistic Goals if they are to be successful. If you meet with your senior staffers and they believe that what you are asking them to do will simply not work (like asking nurses to work 3 hours OT every other day without pay), you need to reconsider your Plan. A Realistic Goal may be to cut expenses across the board by 10% because you know other hospitals have done so, and you can look

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
__________________________________________________________________________________ around the hospital and count ways in which money can be saved,. However, having a goal of cutting expenses by 30% may not be realistic. The one thing having Realistic Goals will do is create momentum once the goals start to be achieved. Once you have Realistic Goals, you must develop Implementable Solutions. What may be an Implementable Solution to one set of nurses in OR, may not be so Implementable in your nursery merely because of the functionality and demands of the departments. You must take into consideration the job demands and safety of the patients when determining whether you are defining Implementable Solutions. Having a meeting to discuss the demands on an OR nurse, without having an OR nurse as part of the discussion, may be counter-productive. For this reason, all Plans must have Flexible Rules and Guidelines. Sometimes a hospital will have a rule or guideline, and then have so many exceptions, that the rule becomes ineffective. Other times a hospital rule should be such that written consent should be obtained if there is going to be any exception, and this usually involves safety issues. The best way for any hospital administrator to really find out about the rules and guidelines in their hospital is to ask the staff, but do so where the people responding will not be held accountable. This way you may get honest and constructive comments. A famous Supply Chain Expert once said If a Plan is worth having, it is worth having performance targets. Any Plan without Performance Targets, will have no need for Measurable Results. The Plan will simply have no measuring stick to gauge the success or failure of the work and effort that is being implemented. Performance Targets are what your staff can strive to achieve. Even if their target is minor in comparison to the overall goal, having produced a positive result can be very productive in creating a TEAM concept. There are many instances where a hospital should seek the assistance of a consultant to achieve all of the elements of a Plan. If a Plan is to reduce costs across the board by 10% there are consultants that can assist to help achieve this plan. Whether the consultants deal with cost transparencies, asset evaluations, implementations, physician collaboration, process evaluations, value analysis, vendor negotiations, there are consultants that have information and knowledge that can be of assistance to a hospital. If you are looking to cut expenses in the purchasing of PPI, why wouldnt you seek out the professional assistance of a company that specializes in this area?

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Fifth (5th) Commandment:

THOU SHALT MOTIVATE THE MASSES


Achieving Buy-In with Physicians and Clinicians is one thing, Motivating The Masses is another. A plan to fully realize targeted savings opportunities will require multiple strategies new and more aggressive approaches to contracting, improved contract compliance, establishment of supply formularies and formulary compliance programs, etc. All initiatives will be more successful if your staff is MOTIVATED to assist with implementing the changes that are going to be necessary. Aligning the degree of change difficulty and timeframe to motivate your staff, need to be carefully planned and monitored. HOW Can You Motivate Your Staff? People are People, and when they feel that the work they are doing is meaningful (makes a difference or an impact in some way) and provides them with challenges that stretch their level of competence, they become internally challenged, and thus motivated. Regardless of the actual work that is being done, motivated individuals generally want to feel a sense of:

Achievement Challenge Responsibility Enjoyment Recognition

Even the most trivial of jobs can be motivating if the manager helps their staff put into context the value the work brings towards making the total hospital experience better for the patient. Work that many see as demanding (like being a nurse), may well become inspirational the nurse is not regularly given the opportunity to extend their responsibilities, and shown the recognition for their ideas. The key is to understand that there is a lot of work involved in understanding that all levels of a hospital staff need this recognition for a job well done. After all, dirty elevators and bathrooms may be noticed more than other perfectly cleaned and disinfected rooms throughout the hospital

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Sixth (6th) Commandment: THOU SHALT BASE BUYING DECISIONS ON COST TRANSPARENCIES AND SYSTAMATIC PROCESSES
Every Hospital has increased challenges in todays economic environment with decreasing reimbursement, escalating costs, and demand for improved quality. This places an increased reliance on efficient medical operations and Effective Cost Management. Effective Cost Management is a continuing approach through educated cost transparency, implemented with a systematic process. Effective Medical Cost Management from a supply chain perspective focuses on a hospital achieving a desired cost without sacrificing with the organizations quality standards. Maintaining this balance at the desired level should be the goal for all supply chain efforts. What exactly is COST TRANSPARENCY? In 10 words or less, Cost Transparency is knowing that you are getting the absolute best price from a particular vendor.

Which is better:

A) Your Vendor Rep tells you that the price you are paying for a particular joint is the Best possible price (for a hospital your size) B) Your Vendor Rep tells you that he could get fired if he were to offer you any more of a discount on the joint agreement that you signed last year C) Your Vendor Rep tells you the only way for you to guarantee the LOW price he gave you last year, is for you to sign a 2 year extension of your current agreement D) You confirming on your own if you can get the joints at a better price, because you believe in Cost Transparency Without getting into whether your Sales Rep would fudge on the truth, odds are that D is the best solution. Even if you find out that the Sales Rep was being absolutely honest, you will have done a better job, because word gets around between vendor companies if you are an easy target, or if you do your homework and thus demand lower pricing. As far as a SYSTAMATIC PROCESS , this can include the prioritizing of categories based on their savings potential, or any other logical approach towards targeting a reduction or analysis of your current spend. Fast results will create momentum and provide much needed support for your program. The process you develop should include a structured format which will not simply rely on the information you learn from your GPO or other benchmarking service. There are professional consulting companies that can assist in this area, especially with more expensive, PPI purchases.

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Seventh (7th) Commandment:

THOU SHALT NOT HATE THY VENDORS NOR THY GPO


Too often a hospital grows so comfortable with a vendor or their GPO that they fail to realize that selling products and services is a business. When the hospital later finds out that the pricing that they have been paying over the past few years was a little (or a lot) higher than other hospitals were paying, some hospital materials managers or supply chain staffers take this personally. Do not take it personally, just do something about it. First, read the Sixth Commandment (THOU SHALT BASE BUYING DECISIONS ON COST TRANSPARENCIES AND SYATAMITIC PROCESSES). What must be done while you friendly vendor is making excuses and developing a strategy to get you back in his good graces, is that you need to look at all purchases by your supply chain department and prioritize any cost savings analysis based on their potential savings to your hospital. A plan to fully realize targeted savings opportunities will require multiple strategies new and more aggressive approaches to contracting, improved contract compliance, establishment of supply formularies and formulary compliance programs, etc. All initiatives, whether pricing, changes to commodity/low-risk products, or physician preference items, need to be prioritized based on timeframe to actualize savings. Even what may appear to be quick hit pricing initiatives may require time to actualize. And, some pricing issues may actually require changes to physician prescribing practices. Aligning degree of change difficulty and timeframe to realize savings need to be carefully planned and monitored. There are a couple of general rules to follow: PPI items should be on local contracts because a skilled negotiator can usually negotiate a better price than the tiered-pricing offered though a GPO A hospital is better off purchasing its Med/Surg products through their GPO Consultants can do a better job than a small or medium sized hospital for PPI purchasing, if the Consultants are experts on cost transparencies

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
__________________________________________________________________________________

The Eight (8th) Commandment:

THOU SHALT STANDARDIZE


Standardization in its simplest form minimizes variability, and reduces waste. How many times have you heard that is not how we do it in my department.. Books have been written describing how organizations, including hospitals waste 20% across the board by simply not standardizing processes, procedures, and purchasing. A hospital that once was considered very standardized can change dramatically for the worse over time by merging with medical practices or other hospitals, and not paying attention to the standards that they once followed. Realization of
savings and resulting budget reductions from standardization and utilization initiatives will necessitate significant management initiatives and an institutionalizing of new approaches that can withstand the rigors of time and scrutiny by physicians and clinicians.

Although there is widespread concern over the rising costs associated with the healthcare industry, as well as a reduction in reimbursements across the board , quality and safety must remain as the main goal when analyzing any products or procedures to be used in any hospital, in an effort to STANDARDIZE. The complexity associated with healthcare supply chain presents significant challenges when a hospital attempt to eliminate or reduce the waste in an effort to lower costs.

There is no balancing that must be considered. Rather, healthcare workers must prioritizeSAFETY and QUALITY FIRST, then and only then, and all things being equal, cost savings through standardization second.

Healthcare News & Information:


The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Ninth (9th) Commandment:

THOU SHALT EDUCATE (AND USE THE EDUCATED)


As a Supply Chain leader, you need to know that decisions for your hospital are being based on competent, reliable, and transparent information. YOU NEED TO EDUCATE YOURSELF AND YOUR STAFF! You need to know that processes are being todays best practices. You need to define and align your own internal best practices! If you are going to be held accountable, you need to have competent support. This means that you need to analyze whether or not your staff is keeping up to date with todays technology. The axiom you cant teach an old dog new tricks has never been more prevalent in the basements of hospitals across the country. What can you do?- USE THE EDUCATED Have your Supply Chain Staff join local/statewide supply associations. Get them involved in the Association for healthcare Resource & Materials Management (AHRMM http://www.ahrmm.org/ ) . Have them attend conferences, trade shows, and get subscriptions to magazines like: Healthcare Purchasing News (www.hponline.com). There is a lot of free information on the internet that can benefit any Supply Chain Department, especially the Manager. The Healthcare Financial management Association is a great place to start. The web site (www.hfma.org) has information, articles, webinars and publications, all for FREE! We are past the days when sitting in an office and waiting for vendors to approach you with products and services at good pricing is an efficient way to cut costs. If your Supply Chain Director is overwhelmed, get them help. If you cant teach your Old Dogs, New Tricks , get a new dog. Remember also, that there are consulting companies that are experts at cutting costs- so dont be afraid use them.

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The TEN (10) Commandments for Hospital and Healthcare Supply Chain Leaders
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The Tenth (10th) Commandment:

THOU SHALT ALWAYS SEEK TO IMPROVE


How many ways can you or your staff improve the Supply Chain Department, or for that matter, the entire hospital? There are countless ways, and if you have the attitude that you will take it upon yourself to be open-minded, one-by-one these improvements can occur. Does your organization have comment cards available for patients (and are the comments read) ?? Does your organization have a suggestion box for employees? Are there incentives for employees that suggest cost cutting and/or quality improvement measures? Does management engage staff in problem solving, when the problems involve the staff? Does management practice what they preach? Does management have a clear vision of the hospitals goals, and are they explained to the staff? Improving does not always mean saving money. Improving a hospitals reputation by having satisfied patients will go a long way towards improving the hospital because a satisfied patient creates goodwill for any hospital. Anyone that doesnt believe that they can improve on what their hospital has in place, needs to read Commandment 9 about teaching Old Dogs, New Tricks. _____________________________________________________________________________________

By: Dennis Stewart, Streamline Savings, LLC For comments or questions: dennis@streamlinesavings.com www.linkedin.com/in/dennisstewart1

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