10/17/2019

1

Page 1

The Healthcare Flywheel

UAB Medicine Supply Chain and its Pursuit of Excellence Through Slow and Methodical Change

Laura Kowalczyk, JD, MPH

Vice President, Supply Chain and Support Services

UAB Medicine

Page 2

As a healthcare supply chain leader what is your biggest challenge right now?

ow

Page 3

Industry Says

The Pace of Change

Healthcare Supply Chain Data/Information Technology Limits Price and Utilization Transparency

“Complex and Fragmented”

Reimbursement Landscape Ever Evolving

Resource Limitations

Supply Chain Leadership Skillset

10/17/2019

2

Page 4

Complex and Fragmented – Are We Different?

To complete the healthcare process there are a host of stakeholders

Each has it’s own interests to protect

Managing both upstream and downstream with suppliers and customers –Can’t run out of anything

Vertical structures create data silos

Page 5

Supply Chain: The Facilitator

HC Supply Chain

Patient/Consumer

GPOs

Insurers

RegulatoryFinance

Operations

Nursing

Distributors

Vendors

Population Health

Patient Outcomes

Quality Executive Positioning

AmbulatorySocial Determinants

Page 6

Patience and Persistence

10/17/2019

3

Page 7

SupplyChain

Excellence

The Journey

Page 8

UAB Hospital-Inpatient Services

1,157-bed, flagship facility for the UAB Health System and primary teaching site for the UAB School of Medicine – 10th

largest in US

One of the largest AMCs in US - Top 5

Level 1 Trauma Center

Only Magnet Designated Hospital in the State of Alabama

Largest comprehensive transplantation program in the southeastern United States

Level 3 Regional Neonatal Intensive Care Unit

57 Operating Rooms

The nation’s first Level 1 Ocular Trauma Hospital

~400,000+ inpatient days

~ 150,000+ ED visits

~43,164 surgical cases

Occupancy 91.5-% (July 2019)

Page 9

UAB Hospital-Ambulatory Services

Over 50 Multispecialty Clinics at UAB Hospital

The Kirklin Clinic of UAB Hospital: A 440,000 square foot ‘super clinic’ designed by the renowned architect, I.M. Pei

UAB Medicine Hospital Based Clinics

Average annual appointments: 650,000+

Rural Hospital Resource Center

Affiliate/ Managed Relationships

Clinical

Supply Chain

Compliance

Managed Care

10/17/2019

4

Page 10

UAB Health System Supports Providers in Alabama

Page 11

Limited base

Value Analysis – one committee

Supply and Linen management/logistics

Purchasing and Contracting performed by University Procurement

Decentralized contract management

Limited benchmarking

High transaction error rate

Not fully leveraging Lawson automation and ecommerce capabilities

Insufficient resources dedicated to the Supply Chain

Supply costs growing at an unsustainable rate

UAB Medicine Supply Chain – Pre-2012

Page 12

Created business case to create a strategic Supply Chain

Received institutional support for the addition of 12 new FTEs to establish Hospital Procurement/Contracting and Analytics Departments

Transitioned:

6 University Procurement staff to a dedicated Hospital Purchasing;

3 Directors (Resource Utilization; Strategic Sourcing and Performance Analytics;

Purchashing Manager;

2 Sourcing agents

Redistributed responsibilities to better orient them with new structure

Began the process of ensuring data integrity

Go-Live January 2012

What Did We Do?

10/17/2019

5

Page 13

UAB Medicine Supply Chain Org Structure - 2019

Sr Director Resource Utilization

Sr Director of Contracting and

Sourcing

VP Supply Chain

Manager Hospital Purchasing

James Aldridge

Director SC Informatics

Sr. Director of Materials

Management

Buyers7

Distribution Manager 3

Systems Analyst2

Administrative Assistant

Distribution Supervisor 5

Receiving Supervisor 1

Inventory and Logistics Staff

80

Crothall Linen

Hill-Rom

Stericycle

Product Assessment Committees

(PACs)11

Value Analyst1

Strategic Sourcing Specialist

5

ESM System Analyst

1

Financial Analyst3

Cardinal Distribution

Informatics Analyst1

Page 14

Vizient: Ranked in top 5 of all hospitals in price benchmarking

ECRI: Ranked in top 6 nationally and #2 in the Southeast

Centralized procurement and contracting

Consistent annual supply implemented supply savings: $8M-$11M

Instituted consistent price benchmarking in contracting process

Expanded Lawson automation/ecommerce

Manage cost beyond pricing

Created clinical alignment across the organization

What We Have Accomplished?

Page 15

Clinically Integrated Supply Chain

Align clinical needs with contracting strategy

Merging cost data with outcomes data to support evidence based decision making

Engage clinicians in the product selection and contracting process

Ensure patient quality, safety, and satisfaction attributes are included in product evaluation - CQO

Integrated With The Clinical Enterprise

10/17/2019

6

Page 16

What Is Critical For Our Evolution?

Page 17

How

The Flywheel concept

Select the Right Team

Build Consistent Processes

Build Supportive and Collaborative Relationships

Continuous Innovation UAB

Medicine Supply Chain

Services

Be Resilient

Always Strive for Efficiency and Effectiveness

Page 18

Amazon’s Flywheel

Lower prices

on more offerings

Increase customer

visits

Attract Third party sellers

Expand the stores, extend

distribution

Grow revenues per fixed costs

10/17/2019

7

Page 19

What Does It Take?

Page 20

Page 21

The Role of Discipline

Disciplined People

No Need for Hierarchy

Disciplined Thought

No Need for Bureaucracy

Disciplined Action

No Need for Excessive Controls

10/17/2019

8

Page 22

Page 23

The Team

Get the right

people on the bus!

The Team

Page 24

Level Five Leadership

Humility

Ambitious

The organization mission is always first

Motivating through inspired standards

Takes responsibility

Develops Discipline

Finds the right people

Nurturing who need no credit

10/17/2019

9

Page 25

Consistent Processes

Time Telling Versus Clock Building

• Shaping a culture that can thrive far beyond any single leader is clock building

Success comes when the organization proves its greatness not just during one leader’s tenure but also

when the next generation of leadership further increases flywheel momentum

- Jim Collins, Built to Last Process

• Building an organization that can generate many great ideas is clock building

Page 26

Relationships

Clinical Teams Key Suppliers

Executive Leadership

The Supply Chain Team

Operations

Relationships

Page 27

If we only focused on efficiency we would make the most sophisticated

horse drawn carriages and breed faster horses

Efficiency AND Effectiveness

If we only focused on effectiveness we would make cars that no one could afford

EfficiencyDoing things right

EffectivenessDoing the right things

Must HaveBoth

E+E

10/17/2019

10

Page 28

Continuous Innovation

Innovation

Dynamic Duality

Core Values

Innovation

Page 29

Resilience

“I arise in the morning torn between a desire to save the world and a desire to

savor the world.

- E. B. White

Resilience

Page 30

Moving From Time Efficiency to Energy and Resilience

Time Management• Management Focus• Controlling Limited Resources • Goals and Outcomes• Personal/Team/Organizational

Productivity • Trying to Get on Top of Things• Feeling Time Starved and

Disappointed

Energy Leadership• Leadership Focus• Multiplying Energy• Passion and Purpose• Personal/Team/Organizational

Engagement• Being on Top of Things• Feeling Engaged and Satisfied

Managers control resources; leaders multiply energy

- Anne Tessien

10/17/2019

11

Page 31

If I Live To Be 100

Optimism: They were not dominated by worry or negativity

Engagement: They were actively involved in life

Mobility: They stayed active physically

Adaptability: Extraordinary ability to stay balanced by accepting and adapting to ands accepting change and loss. Zest for life even after personal losses

Page 32

How

The Flywheel concept

Select the Right Team

Build Consistent Processes

Build Supportive and Collaborative Relationships

Continuous Innovation UAB

Medicine Supply Chain

Services

Be Resilient

Always Strive for Efficiency and Effectiveness

Page 33

Change will be continuous

What we did yesterday worked yesterday

What we do today will not work tomorrow

We may know where to go but not yet how to get there

We will be asked to do more with less

Our success will open up new opportunities

Embrace the Flywheel and hang on for the ride

Things We Know

10/17/2019

12

Page 34

Page 35

Page 36

References

Good to Great, Jim Collins

Leadership from the Inside Out, Kevin Cashman

The Success Principles, Jack Canfield

Fail, Fail Again, Fail Better, Pema Chodren

Gratitude and Trust, Tracey Jackson and Paul Williams