In St. Luke’s, Publishing Excellence Depends on Physician Involvement

President Obama signed The Affordable Care Act into law in 2010. The new law meant that the way the medical system works had to change. Comprehensive health insurance has led to increased demand for care. The ACA led to a shift away from fee-based services and mandatory value-based payment systems. This lowered hospital margins and caused hospital chains to begin to address costs, but to do so in a way that did not compromise patient outcomes. The price became a logical place to focus on health systems.

Adrian Wengert joined Saint Luke’s Health System in 2014. There are several hospitals in St. Luke’s. Luke across the country. Mr. Wengert works at the St. Luke is headquartered in Boise. This is Idaho’s only nonprofit, public, and community-led health care system. With 16,000 employees, it is the largest private employer in the state. The system has 8 acute care hospitals and has 300 medical centers across the country.

As vice president of sales and logistics, Mr. Wengert was brought in to lead the transition. The purchasing process of hospitals lagged far behind the processes used by manufacturers, suppliers and distributors.

Mr. “We didn’t have enough strategic staff,” Wengert said. “We added about 20 positions, all very active jobs from outside health. It was meant to help us solve problems that require a different lens. ”

Procurement was a natural area of ​​focus. In health care facilities, large, powerful suppliers sell hospitals and equipment to individual medical facilities. In many health care systems, the costs of these goods and services have not been carefully evaluated. Costs were passed on to patients and insurers. As a result, hospital chains were severely lacking in acquisition capacity. However, after labor costs, medical supplies are the second largest expense.

St. Luke’s began developing new vendor relationships. “We’ve created strategic vendor relationships.”

The net results of that were about $100 million in savings over a 10-year period.

These are good results. For those who know health systems, they are amazing. Doctors typically have a lot of discretion in what they prescribe and what medical devices they use. My wife, who worked as a vice president in that industry, told me that one key to hospital administrators maintaining their leadership positions is to follow the simple rule, “Don’t offend doctors!”

Mr. Wengert was more of an advocate. “When it comes to manufacturing, engineers are usually at the top of the food chain. Doctors have health care.”

How did the book of Saint Luke achieve this? “We have re-established strong collaborative relationships with our internal stakeholders, many of whom are physicians and clinicians,” Mr. Wengert said.

“How do you start building these relationships so that you can drive inventory levels? You can have rational decisions that aren’t just based on cost. They have to be based on the success of the product. You have to look results, quality, problems, all of those things. So, we started working on clinical integration as one way” to save money on purchases.

Mr. Wengert explained that medical chains have two types of purchasing systems. “The first thing is a model of command and control.” In this model, “the supply chain goes out and negotiates a contract for spinal implants and says to the doctors, ‘Now you’re going to use Medtronic.’ We did it because we saved several million dollars. While the savings add up quickly, over time, it destroys physician engagement, and more importantly, physician compliance. ”

“You can’t support that” for example. “No doctor wants to lose his independence. They don’t want a merchant to tell them how to use medical drugs. ”

Another example, Mr. Wengert explained, is the influence model. In this model, it presents surgeons with all options. “One way is that we do nothing; we are always in that situation. This is what it looks like. “

“The second option is always conditional. If we go from six vendors to three, that’s how it affects the price and ultimately helps you create a deeper partnership. ”

Why should doctors care about a deep relationship with a provider? During the COVID era, there were many shortages that made it difficult to use good medicine. Better supplier relationships help ensure that goods are delivered in full and on time. Physicians may not care about cost, but they do care about achieving certainty of supply.

This model empowers decision-making committees that focus on specific spending categories such as spine or knee implants. “We will have a plan on how to create membership. So, if we ask them to stick to one or the other, we try to identify doctors who use both types to ask them their medical opinions. ‘What do you think about this?’”

But you always have surgeons who say, ‘This is what I want to use.’ We have very strong physician champions in our organizations. Sometimes they’ll lean on each other, then they’ll talk to each other, and usually the issue will resolve itself.”

St. Luke’s also has six nurses assigned to the supply chain. “They speak medical language. That helps us to be more successful.”

Finally, we boarded the manager of the pharmaceutical supply department. And she was just so sweet. ” He explains to the medical community “the full benefit of what we are trying to do for our patients.”

St. Luke’s never rests. They are moving to a self-sustaining system that reduces their dependence on expensive suppliers. They built a warehouse with material handling equipment and a warehousing system from Tecsys. The incoming materials will go into the warehouse and be delivered to medical centers across the country. The warehouse will be operational by the end of the year.