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Becker’s Healthcare Podcast
From Fragmentation to Forecasting: Integrating Logistics Across Health Systems
00:17:10
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- [00:00]
A
Hi, everyone. This is Lucas Voss with Becker's Healthcare. Thanks so much for tuning in to the Becker's Healthcare podcast series. It's fantastic to have you. An exciting topic today, from fragmentation to forecasting, integrating logistics across health systems. And joining me for today's discussion, very excited to have her, Deborah Haywood. She's the vice president and General Manager of health systems at McKesson Medical Surgical. Deborah, thanks so much for being here today.
- [00:26]
B
It's great to have you, Lucas. Thank you so much for having me. I'm looking forward to this next time here with you.
- [00:33]
A
Yeah, we have lots to discuss, but I do want to start off with introductions for our audience that might not know you yet. At least kick us off with a little bit about yourself and your work in healthcare.
- [00:44]
B
Yeah, so looking forward to talking about that so early on, Lucas. My career was started as a respiratory therapist. I was inspired from my father's service in the military. He was injured when I was three years old. And that passion has just driven my career all the way, working through acute care as a clinician into leadership roles at durable medical equipment companies, and over the last 18 years with McKesson Medical Surgical. And so my career journey has really started at McKesson with leading home care division and then long term care and then government, and now, most recently over the last 15 months, the health systems team. And so really my passion just stems from always striving to focus on improving patient care through provider efficiencies and streamlining logistics. And so our health systems journey over the last 15 months here has just been fantastic at looking at what our providers need most.
- [01:35]
A
And you also have the fantastic ability of having both perspectives on the topic that we're talking about today and being able to judge it from both sides. I do want to start us off with sort of level setting. Everything we're talking about first, fragmentation across systems and sites and processes that we're seeing today in healthcare. It's still a major barrier for supply chain reliability. Certainly. Where do you most often see fragmentation creating cost, risk, or even that unnecessary variation that we really don't want to see across health systems?
- [02:08]
B
Yeah, I think we've been seeing the fragmentation really exist from our manufacturers have been so innovative. When you think about the research and development that's brought products into our providers that used to require an acute care stay, a hospitalization, now we can actually do some of this maybe even in a home care setting where patients want to be taken care of first. So that fragmentation exists simply because of the advancement of products and Technology and really driven from our reimbursement, our payers, whether it's Medicare, Medicaid, our managed care providers, they really want that care to be delivered in that lowest cost to serve. And patients really want to be taken care of at home with their loved ones. So that advancement has really driven our providers to look at what are different ways that they have went to medical school and become so encouraged by the passion that they have themselves to deliver that care. So now we have providers that are differentiated by specialty. They're actually in clinics, they're able to see patients and outpatient that once they used to only be able to see in hospitals. So that fragmentation really starts because what we used to deliver in cases and pallets to a hospital now needs to be delivered in eaches and small boxes to that provider because they don't have the space to keep all of those products. So that advancement has really caused that. The fragmentation simply exists because we've now got a population of whether it's caregivers that are taking care of our loved ones or even that person that has an unfortunate disease that they're working through. We can now research. The Internet has been great value for us to be able to see what kind of products can take care of the illness for our loved one or for ourself. And so that fragmentation starts there. Our goal is to make sure that the process of logistics streamlines that so our providers have what they need to take care of their patients.
- [03:59]
A
Yeah, Speaking of logistics, as you mentioned, it can be as small as changing the way something is delivered and how it's delivered. Right. The definition of how to integrate logistics can vary depending on who you're talking to and what the organization sizes, et cetera. From your experience though, what does that true integration of logistics look like in practice across non acute settings and what elements are most often underestimated when we're talking about integrating logistics?
- [04:28]
B
So integrating logistics really starts with us talking to our procurement officers. What type of products do they need to buy and where do they need to buy them at? And how do those products actually need to be delivered? And then we have to understand that integration. What technology system is the hospital system using? So where our cell used to be, our consultative cell used to be with our health systems. We were just talking about what type of product, maybe the cost that was involved in that product. Now we're having to understand what is the electronic health record that's being used in the health system. How can we maximize that efficiency? So the integration of logistics actually starts with the Integration of technology. If we can integrate with that hospital technology, that provider has to have ease of use. You now have small practices that are operating maybe with one individual, one clinician that's also ordering the product, as well as working with the physician to provide the care at the bedside. They have multiple roles, they're tasked with doing multiple things, and they may actually receive that product in the morning so they can deliver that care that afternoon. And so that integration of logistics now starts with what type of technology is that health system using? All the way through to their clinics, through to that non acute space, maybe through to that infusion pharmacy, all the way through to their home health agency or home infusion agency that they're working with to deliver that care. And so when you think about, used to think about pharmaceuticals, of infusion pharmaceuticals, that was always done in a pharmacy, it was done in acute care. Now that care is actually provided in a patient's home or in a clinic or in an oncology office, through a pump, through a system. And that drug needs to be there so that patient can actually be taken care of. If you take that a step further, that documentation needs to be provided that that care was delivered with that product. Some of those products have specific lot numbers, specific requirements, such as dscsa. And those requirements actually force that physician, force that practice to have that regulatory documentation. We can provide that through our technology and save our providers so much work so they can actually do what they want to do and that is deliver care. So that integration, that fragmentation actually starts with the technology now in our health systems.
- [06:45]
A
And one important thing I think is that you've touched on it, right? It also starts with having those conversations with the supply chain managers, with those folks that are handling those decisions. And I wanted to come back to that decision piece in itself too, when you mentioned all of these elements, all of these different points, that decisions can be made. Now, how should organization think about central versus local decision rights when we are thinking about this in terms of as organizations are growing, Right.
- [07:10]
B
So central rights always come down to people want to streamline their formulary. They do want to advance their care. They're trying to maximize, you know, their formulary. And by that I mean they really want to mitigate the amount of the same item that they have coming into a health system. And that is good work with that. We have to help our providers understand what type of product has to be used by that practice. So there is an overall formulary that can certainly be used, but we also have to give those local rights and decisions to the providers that are delivering that care, maybe in a specialty outpatient setting. So their formulary may look a little different because they've got a patient population that looks different. They may have a pediatric population that looks different. So you need different sizes that are not in that adult population. So while an overall overarching formulary works great, we do have to be cognizant of those providers and that local specific type of care that they're delivering, because you don't want them having something that won't work for their patient, you want them having something specific. So there's no waste in that. So we have to be cognizant. We have to understand every type of practice that's within that health system in the non acute space, specialize that formulary to exactly the care that's being delivered, the product that is being used, and then we have to streamline it for that physician, that clinician to make sure it flows through their technology and they have the documentation that they need to be reimbursed.
- [08:37]
A
Has to be an individualized decision based on the situation that the specific unit is in to be able to be effective.
- [08:45]
B
That is correct. That is correct. Because it may be an each and that each may be a very expensive item. You don't want to order a case of those, you just need to order an each.
- [08:56]
A
Yeah. Speaking of reordering and you've touched on technology and certainly the importance of technology in this process. We know that analytics and forecasting, they're really essential right now for moving from reactive replenishment to again, what you just mentioned, the forward looking planning piece of this. We don't want something expensive that we don't actually need. What inputs matter most for accurate forecasting? What are some of those ways to turn those insights that we have that we might be getting into consistent decision routines for teams?
- [09:26]
B
Yeah, those consistent decisions really start with helping a customer drive. What is the utilization that you've had in the past six months, the past 12 months, the past 18 months? As we all know, we've had acts of God that have happened. We've had windstorms, we've had tornadoes, we've had wildfires, all those things impact providers. And so we have to look at the seasonality that's involved too. So you can't just take a flat run rate of exactly what's happening with a provider. You have to look at where they're at regionally, what can happen for them, how they need to be prepared, maybe for a hurricane if they're in a state that has been impacted by hurricanes by specific seasons and help them really understand which items need to be forecasted and how do you get ahead of that? How do you do predictive forecasting and analytics? Our health systems don't have a large storeroom anymore, though that space is a high commodity. They have to use that space very carefully. So what we have to help them do is get that just in time delivery by having enough residual inventory that we're holding here as McKesson that we can provide that backup for them. So really working with them and understanding the item that's being ordered, we meet with our customers on a quarterly basis. We have a tool called the McKesson Business Analytic Tool that gives them a good solid consultative review once a quarter on how we actually what items have we used and then forward looking what do we need to be planning for that next quarter based on seasonality or specific provider where they may be located. We've also seen that we don't know when Covid is going to hit flu seasons now. There's not a specific flu season anymore. It could be an early flu season or a late flu season, we just don't know. And so we have to help our providers make sure they have the vaccines, they have the products they need for emergency preparedness and planning, but they need it when they need it. It can't just be sitting in a storeroom, it can't expire. They don't have the excess cost anymore to be able to have expired products. And we have to help them do that. We also have tools such as OrderLogic. OrderLogic is a brand new tool in our home health market that really helps our home health agencies and our nurses that are on site in a patient's home prepare by ordering that for those specific patients and refilling that. And so those kind of tools and technology, Lucas, they really help us get under how our provider is actually working on a day to day basis. But it helps our procurement teams be planful and that's what they need. They need planning, they have to plan for their budgets. They have to understand what's going to be impacted for them. They can't order too much, they don't have the opportunity to do that. But if they have a spike in flu season or they have a spike in a particular vaccine that is desperately needed that they didn't know was going to be there, we have to have that sitting there so they can get it whenever they need it most.
- [12:12]
A
And again, I think one of the important things here too is this wasn't a thing 20 years ago. Right. The technology has evolved so fast and so rapidly that we're now at a point where we can utilize this. And you mentioned the analytics tool from, from your end, from McKesson's end, we'll refer to it as MBA here. Why is that so important to have access to a tool like this first off? And how is that going to support more reliable system wide decisions as we're moving into this next phase of technology and really the world in healthcare?
- [12:45]
B
Yeah. So I'll take that two ways. We needed it internally to prepare ourselves for our customers and our customers needed it for appropriate budgeting and planning internally. It helps our category management teams and those teams are teams that work with manufacturers. It helped them know exactly what product we needed to have and when we needed to have it. It also allowed us to be able to have certain manufacturers where we know there are just critical items, there are critical items we cannot run out of. And we've seen some shortages, Lucas, in the market take place. We've seen manufacturing plants be destroyed by an act of God that nobody could have ever seen coming. And so what this has allowed us to do is our inventory management team watching that on a daily basis, honestly almost on an hourly basis, planning for what type of inventory needs to come into our market that allows us to take that forward, facing to our customers. So they know what we need to be planning for with them. We have it in the non acute facility. They know that they have the amount of quantity that they need moving forward, depending on the type of practice and how they're servicing that, whether it's a general medical practice all the way to a home health, patients still have to be taken care of in home health. And when you think about how patients are served at home, they need those products at home even during a time that maybe is inclement weather. And so having that ability for us to deliver that allows us that leverage for that nurse to still take care of that patient. But having our private fleet and our transportation allows our health systems to know that our trucks are going to be on the road during inclement weather and still get that product to that general medical practice, that family practice office that is still trying to take care of patients that are coming in that are very sick. And so that I would say, when you think about how is the tools and technology, why is that so important? It starts at the very beginning, planning our internal teams, working with our manufacturers to make sure we do have the appropriate amount of product ordered. But it flows all the Way through. The technology gives us that ability to make sure we take care of our providers and patients.
- [14:52]
A
Yeah, it truly enables what we talked about earlier. It enables a proactive approach versus having to rely on reactive tools or reactive processes. It's an enabler for that proactive approach. Deborah, it's so fantastic to have you. Thank you for taking some time for us. I want to turn the floor over to you. Anything else that you want to add that we might have not touched on for our audience.
- [15:15]
B
Thank you so much, Lucas, for the time. I appreciate the focus on the technology. I think that is where the market is going. I think that is the way we can really arm our providers to be prepared and efficient. The products and supply management efficiencies are just going to allow them to have the most efficient supply and logistics in the market that they've had. It's far advanced from even anything that we had just three to five years ago. You know, our lab products has been such an advancement in that being able to bring that to our non acute facilities and that actually helps our health system generate revenue, which they really truly need to do in today's environment. They are looking for not just cost savings but revenue generating activity that can actually bring revenue into the provider, help those facilities, help those local providers actually keep those clinic doors open by providing reimbursement into the patients in a rural population or in an inner city population. Our business continuity planning is really that generation with our technology allows us to be prepared and protect our providers during inclement weather or even worse, during cyber attacks that can happen and can really cripple our health systems. And we have that backup of that inventory that's been ordered for that customer over a period of time. And we are still able to deliver that inventory so they can take care of their patients while their technology has to be rebooted. So thank you for the time. Today we are super excited about where the market's going and how we're able to help our providers moving forward in the health system market.
- [16:48]
A
Well Deborah, it's so fantastic to have you as well. And as you just mentioned, patients first, that proactive approach to be able to care for patients. It's fantastic to have you and we also want to thank our podcast sponsor, McKesson Medical Surgical. And you can tune into more podcasts from Becker's Healthcare by visiting our podcast page@beckershospitalreview.com.