The Changing Role of Healthcare Supply Chain Professionals: View from the AHRMM Conference

Reform-driven changes in healthcare was a major theme at the recent Association for Healthcare Resource & Materials Management conference. Here's the takeaway for healthcare supply chain professionals.

Keith Lohkamp August 25, 2015
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Earlier this month, I attended the Association for Healthcare Resource & Materials Management (AHRMM) conference in Indianapolis. The conference took place against the backdrop of tremendous reform-driven changes in healthcare, which emerged as a recurring theme throughout. I was energized to learn some new things that I could bring back to our team here at Workday, while other discussions reinforced what we’ve been hearing from our healthcare customers about rapid change in the industry.

A key issue discussed was the impact that new reimbursement models—particularly for Medicare—will have on hospitals as they begin receiving payments based on the value and outcomes of patient care. Faced with the possibility of declining reimbursements, healthcare organizations must change in order to achieve high quality of care while also preserving margins.

It became clear in these discussions that traditional approaches such as pressuring suppliers for lower prices will not be enough; healthcare providers need to look at how they deliver care with the right balance of cost, quality, and patient outcomes.

This need for change was reinforced during the opening session with a case study that looked at how variations in clinical practices can impact patient outcomes and contribute to waste due to preventable mistakes, unusable products, and unnecessary treatments. The study focused on how “lean” techniques typically associated with manufacturing could be applied to the provision of care to develop evidence-based practices that deliver the right combination of quality and cost.

Supply chain leaders must work alongside executive leaders to find ways to keep their healthcare organizations profitable without compromising on patient care.

Several other sessions built upon this topic with more examples, such as how hospitals are creating clinical value analysis teams made up of physicians, nurses, and finance and supply chain professionals. Teammates work together to evaluate new products, the use of existing products, and procedure and care pathways. Typical questions these teams may look to answer might include, “Why are costs different for the same procedure across physicians and locations?” and “Can we standardize on care pathways and products used in procedures?”

All of this activity has big implications for healthcare supply chain leaders. For one, it places more responsibility on them to work alongside executive leaders to find ways to keep their healthcare organizations profitable without compromising on patient care. In addition, supply chain professionals are now expected to provide analytical support on costs, historical utilization, contracts, product options, and more as hospitals go through clinical value assessments.

Developing a Supply Chain Talent Strategy

Going forward, healthcare providers need to have in place a supply chain talent strategy to attract and retain the right staff of strategic thinkers to meet these changes. As one healthcare executive noted in her conference presentation, supply chain teams should be looking for people with diverse talents around data science, technology, category management, cost accounting, change management, marketing, and risk management. This more strategic approach to talent impacts not just recruiting but also ongoing employee development and performance management.

At Workday, our company philosophy is built on helping customers adapt to change. We’re focused on delivering HR and finance applications, including new supply chain features in Workday Procurement and our planned Workday Inventory application, to help healthcare organizations hire and keep the best people, operate more efficiently, and gain better insights into their finances, supply chains, and talent.

All of our applications include built-in analytics—to better answer those questions that inform decisions about how organizations can adapt to change—and are delivered in the cloud using a continuous development model.

There’s no question that the healthcare industry is undergoing massive changes. We’ll continue to investigate the issues that impact our healthcare customers, and work with them to build applications that address those issues.

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