Latest / Becker’s Healthcare Podcast / From Fragmentation to Forecasting: Integrating Logistics Across Health Systems

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From Fragmentation to Forecasting: Integrating Logistics Across Health Systems · Becker’s Healthcare Podcast

0:00
Hi, everyone. This is Lucas Voss with Becker's
0:02
Healthcare. Thanks so much for tuning in to
0:04
the Becker's Healthcare podcast series. It's fantastic
0:07
to have you. An exciting topic today from
0:10
fragmentation to forecasting, integrating
0:12
logistics
0:13
across
0:14
health systems. And joining me for for today's
0:17
discussion, very excited to have her, Deborah Haywood.
0:19
She's the vice president and general manager of
0:21
health systems at McKesson Medical Surgical. Deborah, thanks
0:25
so much for being here today. It's great
0:26
to have you.
0:27
Lucas, thank you so much for having me.
0:29
I'm looking forward to this next, time here
0:32
with you. Yeah. We have lots to discuss,
0:35
but I do wanna start off with introductions
0:37
for our audience that might not know you
0:39
yet at least. Kick us off with a
0:41
little bit about yourself and and your work
0:43
in health care. Yeah. So looking forward to
0:45
talking about that. So early on, Lucas, my
0:48
career was started as a respiratory therapist. I
0:50
was inspired from my father's service in the
0:52
military. He was injured when I was three
0:55
years old and that passion has just driven
0:57
my career all the way working through acute
0:59
care as a clinician and to leadership roles
1:02
at durable medical equipment companies and over the
1:04
last eighteen years with McKesson Medical Surgical. And
1:07
so, my career journey
1:09
has really started, at McKesson with leading home
1:12
care,
1:13
division and then long term care and then
1:15
government, and now most recently, over the last
1:17
fifteen months, the health systems team. And so,
1:20
really, my passion just stems from always striving
1:22
to focus on improving patient care
1:24
through provider efficiencies and streamlining logistics. And so
1:28
our health systems
1:29
journey over the last fifteen months here has
1:31
just been fantastic at looking at what our
1:33
providers need most.
1:35
And you also have the fantastic ability of
1:37
having both perspectives on the topic that we're
1:40
talking about today
1:41
and being able to judge it from both
1:43
sides.
1:44
I do wanna start us off with sort
1:46
of level setting everything. We're talking about fragmentation
1:49
across systems and sites and processes that we're
1:51
seeing today in health care. It's still a
1:53
major barrier,
1:54
for supply chain reliability certainly.
1:57
Where do you most often see fragmentation
2:00
creating cost, risk, or even that unnecessary variation
2:03
that we really don't want to see across
2:06
health systems?
2:07
Yeah. I think we've been seeing the fragmentation
2:10
really exist
2:12
from our manufacturers. They've been so innovative. When
2:14
you think about the research and development that's
2:17
brought products
2:18
into our providers that used to require
2:21
an acute care stay, a hospitalization,
2:24
Now, we can actually do some of this,
2:25
maybe even in a home care setting where
2:27
patients wanna be taken care of first. So
2:29
that fragmentation
2:30
exists simply because of the advancement of products
2:32
and technology
2:33
and really driven from our reimbursement.
2:36
Our our payers,
2:37
whether it's Medicare, Medicaid,
2:39
our managed care providers, they really want that
2:42
care to be delivered in that lowest cost
2:44
to serve. And patients really wanna be taken
2:47
care of at home with their loved ones.
2:49
So that advancement has really driven our providers
2:52
to look at what are different ways that,
2:54
you know, they have went to medical school
2:56
and become so,
2:57
encouraged by that passion that they have themselves
3:00
to deliver that care. So now we have
3:02
providers that are differentiated by specialty. They're actually
3:05
in clinics. They're able to see patients in
3:07
outpatient that that once they used to only
3:10
be able to see in hospitals.
3:11
So that fragmentation
3:12
really starts because what we used to deliver
3:15
in cases and pallets to a hospital
3:18
now needs to be delivered in eaches and
3:21
small boxes
3:22
to that provider because they don't have the
3:24
space to keep all of those products.
3:26
So that advancement has really caused that. The
3:28
fragmentation
3:29
simply exists because we've now got a population
3:33
of whether it's caregivers that are taking care
3:35
of our loved ones or even that person
3:37
that has an unfortunate disease that they're working
3:39
through, we can now research.
3:41
The Internet has been great value for us
3:43
to be able to see what kind of
3:44
products can take care of the illness for
3:46
our loved one or for ourself.
3:48
And so that fragmentation
3:49
starts there. Our goal is to make sure
3:52
that the process of logistics streamlines that so
3:55
our providers have what they need to take
3:56
care of their patients.
3:58
Yeah. Speaking of logistics, as you mentioned, it
4:00
can be as small as changing the way
4:02
something is delivered and how it's delivered. Right?
4:04
The definition of how to integrate logistics can
4:08
vary depending on who you're talking to and
4:10
and what the organization size is, etcetera.
4:12
From your experience,
4:14
though,
4:15
what does that true integration of logistics look
4:18
like in practice across non acute settings, and
4:21
and what elements are are most often underestimated
4:23
when we're talking about integrating logistics?
4:26
Yes. So integrating logistics really starts with us
4:30
talking to our procurement officers.
4:32
What type of products do they need to
4:33
buy and where do they need to buy
4:35
them at and how do those products actually
4:37
need to be delivered? And then we have
4:39
to understand that integration,
4:42
what technology system is the hospital system using?
4:45
So where our cell used to be, our
4:47
consultative cell used to be with our health
4:49
systems, we were just talking about what type
4:51
of product, maybe the cost that was involved
4:53
in that product. Now we're having to understand
4:56
what is the electronic health record that's being
4:58
used in the health system. How can we
5:00
maximize that efficiency? So the integration of logistics
5:03
actually starts with the integration of technology.
5:06
If we can integrate with that hospital technology,
5:09
that provider has to have ease of use.
5:12
You now have small practices that are operating
5:14
maybe with one individual, one clinician that's also
5:17
ordering the product as well as working with
5:19
the physician to provide the care at the
5:21
bedside. They have multiple roles. They're tasked with
5:24
doing multiple things. And they may actually receive
5:26
that product in the morning so they can
5:28
deliver that care that afternoon.
5:30
And so that integration of logistics now starts
5:33
with
5:34
what type of technology is that health system
5:37
using all the way through to their clinics,
5:39
through to that non acute space, maybe through
5:42
to that infusion pharmacy,
5:44
all the way through to their home health
5:45
agency
5:46
or home infusion agency that they're working with
5:49
to deliver that care. And so when you
5:51
think about you used to think about pharmaceuticals
5:53
of infusion pharmaceuticals, that was always done in
5:56
a pharmacy. It was done in acute care.
5:58
Now that is that care is actually provide
6:00
in a patient's home or in a clinic
6:03
or an in an oncology office
6:05
through a pump, through a system. And that
6:07
drug needs to be there so that patient
6:09
can actually be taken care of. If you
6:11
take that a step further, that documentation
6:14
needs to be provided that that care was
6:15
delivered with that product.
6:17
Some of those products have specific lot numbers,
6:20
specific requirements such as DSCSA.
6:23
And those requirements actually force that physician, force
6:27
that practice
6:28
to have that regulatory documentation.
6:31
We can provide that through our technology and
6:33
save our providers so much work so they
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can actually do what they wanna do and
6:37
that is deliver care. So that integration, that
6:40
fragmentation
6:41
actually starts with the technology now in our
6:43
health systems.
6:45
And one important thing I think is that
6:47
you've touched on it, right, it also starts
6:48
with having those conversations with the supply chain
6:50
managers, with those folks that are handling those
6:52
decisions. And I wanted to come back to
6:54
that decision piece in itself too. And you
6:55
mentioned all of these elements, all of these
6:57
different points that decisions can be made now.
7:01
How should organization think about central versus local
7:03
decision rights when we are thinking about this
7:06
in terms of as organizations are growing?
7:09
Alright. So central rights always come down to
7:12
people wanna streamline their formulary. They do wanna
7:14
advance their care. They're trying to maximize,
7:18
you know, their formulary. And by that, I
7:19
mean, they're they really wanna mitigate the amount
7:22
of the same item that they have coming
7:24
into a a health system. And that is
7:26
good work.
7:28
With that, we have to help our providers
7:30
understand what type of product has to be
7:32
used by that practice. So there is an
7:34
overall formulary that can certainly be used, but
7:37
we also have to give those local rights
7:39
and decisions to the providers that are be
7:42
delivering that care maybe in a specialty outpatient
7:44
setting. So their formulary may look a little
7:47
different because they've got a patient population
7:49
that looks different. They may have a pediatric
7:52
population that looks different. So you need different
7:55
sizes that are not in that adult population.
7:57
So while an overall, overarching formulary works great,
8:01
we do have to be cognizant of those
8:03
providers and that local specific type of care
8:06
that they're delivering because you don't want them
8:08
having something that won't work for their patient.
8:10
You want them having something specific so there's
8:13
no waste in that. So we have to
8:15
be cognizant. We have to understand every type
8:17
of practice that's within that health system in
8:20
the nonacute space, specialize that formulary
8:23
to exactly the care that's being delivered, the
8:25
product that is being used, and then we
8:28
have to streamline it for that physician, that
8:30
clinician
8:31
to make sure it flows through their technology
8:33
and they have the documentation that they need
8:34
to be reimbursed.
8:37
Has to be an individualized decision
8:39
based on the situation that the specific unit
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is in to be able to be effective.
8:44
That is correct. That is correct. Because it
8:46
may be an each, and that each may
8:48
be a very expensive item. You don't wanna
8:51
order a case of those. You just need
8:54
to order an each.
8:56
Yeah. Speaking of reordering, and you've touched on
8:59
technology and certainly the importance of technology in
9:01
this process, we know that
9:03
analytics and and forecasting, they're really essential right
9:06
now for for moving from reactive replenishment to,
9:09
again, what you just mentioned, the forward looking
9:10
planning piece of this. We don't want something
9:12
expensive that we don't actually need.
9:15
What what inputs matter most for accurate forecasting?
9:18
What are some of those ways to turn
9:20
those insights that we have that we might
9:22
be getting into consistent decision routines for teams?
9:26
Yeah. Those consistent decisions really start with
9:30
helping a customer drive. What is the utilization
9:33
that you've had in the past six months,
9:35
the past twelve months, the past eighteen months?
9:38
As we all know, we've had acts of
9:39
God that have happened. We've had windstorms. We've
9:41
had tornadoes. We've had wildfires. All those things
9:44
impact providers. And so we have to look
9:46
at the seasonality that's involved too. So you
9:48
can't just take a flat run rate of
9:50
exactly what's happening with a provider. You have
9:52
to look at where they're at regionally, what
9:55
can happen for them, how they need to
9:56
be prepared maybe for a hurricane if they're
9:58
in a state that has been impacted by
10:00
hurricanes by specific seasons, and help them really
10:03
understand which items need to be forecasted and
10:06
how do you get ahead of that. How
10:08
do you do
10:09
predictive forecasting and analytics? Our health systems don't
10:12
have a large storeroom anymore though. That space
10:15
is a high commodity.
10:16
They have to use that space very carefully.
10:18
So what we have to help them do
10:19
is get that just in time delivery by
10:22
having enough residual,
10:24
inventory that we're holding here as McKesson that
10:27
we can provide that backup for them. So
10:29
really working with them and understanding the item
10:31
that's being ordered. We meet with our customers
10:33
on a quarterly basis. We have a tool
10:35
called the McKesson Business analytic tool that gives
10:38
them a good solid consultative review once a
10:41
quarter on how we actually what items have
10:43
we used, and then forward looking, what do
10:46
we need to be planning for that next
10:47
quarter based on seasonality or specific provider where
10:50
they may be located?
10:52
We've also seen that we don't know when
10:54
COVID's gonna hit. Flu seasons now, there's not
10:57
a specific flu season anymore. It could be
10:59
an early flu season or a late flu
11:01
season.
11:02
We just don't know. And so we have
11:03
to help our providers make sure they have
11:05
the vaccines.
11:06
They have the products they need for emergency
11:08
preparedness and planning, but they need it when
11:11
they need it. It doesn't it can't just
11:13
be sitting in a storeroom. It can't expire.
11:15
They don't have the excess cost anymore to
11:17
be able to have expired products, and we
11:19
have to help them do that. We are
11:21
we also have tools, such as Order Logic.
11:24
Order Logic is a brand new tool in
11:26
our home health market that really helps our
11:28
home health agencies and our nurses that are
11:30
on-site in a patient's home prepare,
11:33
by ordering that for those specific patients and
11:36
refilling that. And so those kind of tools
11:39
and technology, Lucas, they really help us get
11:42
under how our provider is actually working on
11:45
a day to day basis, but it helps
11:46
our procurement teams be planful. And that's what
11:49
they need. They need planning. They have to
11:51
plan for their budgets. They have to understand
11:53
what's gonna be impacted for them. They can't
11:55
order too much. They don't have the opportunity
11:58
to do that. But if they have a
11:59
spike in flu season or they have a
12:02
spike in a particular vaccine that is desperately
12:04
needed,
12:05
that they didn't know was gonna be there,
12:07
we have to have that sitting there so
12:09
they can get it whenever they need it
12:10
most.
12:12
And, again, I think one of the important
12:13
things here too is this wasn't a thing
12:15
twenty years ago. Right? The tech the technology
12:18
has evolved so fast and so rapidly that
12:20
we're now at a point where we can
12:22
utilize this. And you mentioned the analytics tool
12:24
from from your end, from McKesson's end. We'll
12:26
refer to it as MBA here.
12:29
How why is that so important to to
12:31
have access to a tool like this, first
12:33
off? And how is that going to support
12:36
more reliable system wide decisions as we're moving
12:40
into this next phase of technology
12:43
and really the world in health care?
12:45
Yeah. So I'll take that two ways. We
12:47
needed it internally to prepare ourselves for our
12:50
customers, and our customers needed it for appropriate
12:52
budgeting and planning.
12:54
Internally, it helps our category management teams, and
12:56
those teams are teams that work with manufacturers.
12:59
It helped them know exactly what product we
13:01
needed to have and when we needed to
13:03
have it. It also allowed us to be
13:05
able to have certain manufacturers where we know
13:07
there are just critical items. There are critical
13:10
items we cannot run out of.
13:12
And we've seen some shortages, Lucas, in the
13:14
market take place.
13:16
We've seen manufacturing plants be destroyed by an
13:19
act of God that nobody could have ever
13:21
seen coming. And so what this has allowed
13:23
us to do is our inventory management
13:25
team watching that on a daily basis, honestly,
13:28
almost on an hourly basis,
13:30
planning for what type of inventory needs to
13:32
come into our market.
13:34
That allows us to take that forward facing
13:36
to our customers so they know what we
13:39
need to be planning for with them. We
13:41
have it in the non acute facility. They
13:43
know that they have the amount of quality,
13:45
quantity that they need moving forward depending on
13:48
the type of practice and how they're, servicing
13:50
in that, whether it's a general medical practice
13:53
all the way to a home health. Patients
13:55
still have to be taken care of in
13:57
home health. And when you think about how
13:59
patients are served at home,
14:02
they need those products at home even during
14:04
a time,
14:05
that maybe is inclement weather. And so having
14:08
that ability for us to deliver that allows
14:10
us that leverage for that nurse to still
14:12
take care of that patient. But having our
14:15
private fleet and our transportation
14:17
allows our health systems to know that our
14:19
trucks are gonna be on the road during
14:21
inclement weather and still get that product to
14:23
that general medical practice, that family practice office
14:26
that is still trying to take care of
14:28
patients that are coming in that are very
14:29
sick. And so that, I would say, you
14:32
know, when you think about how is the
14:33
tools and technology, why is it so important,
14:36
it starts at the very beginning, planning our
14:38
internal teams working with our manufacturers to make
14:40
sure we do have the appropriate amount of
14:42
product ordered, but it flows all the way
14:45
through the technology, gives us that ability to
14:48
make sure we take our take care of
14:49
our providers and patients.
14:51
Yeah. It truly enables what we talked about
14:53
earlier. It enables a proactive approach
14:57
versus having to rely on reactive tools or
14:59
reactive processes. It's an enabler for that proactive
15:03
approach.
15:04
Deborah, it's so fantastic to have you. Thank
15:07
you for taking some time for us. I
15:08
wanna turn the floor over to you. Anything
15:10
else that you wanna add that we might
15:12
have not touched on, for our audience?
15:14
Thank you so much, Lucas, for the time.
15:16
I appreciate the focus on the technology. I
15:18
think that is where the market is going.
15:20
I think that is the way we can
15:21
really arm our providers to be prepared
15:24
and efficient.
15:26
The products and supply management efficiencies are just
15:28
gonna allow them to have the most, efficient
15:31
supply logistics in the market that they've had.
15:33
It's far advanced from even anything that we
15:36
had just three to five years ago.
15:38
You know, our lab products has been such
15:40
an advancement in that. Being able to bring
15:42
that to our non acute facilities, and that
15:45
actually helps our health systems generate revenue, which
15:47
they really truly need to do in today's
15:50
environment. They are looking for not just cost
15:52
savings, but revenue generating activity that can actually
15:56
bring revenue into the provider,
15:59
help those facilities, help those local providers, actually
16:02
keep those clinic doors open,
16:04
by providing reimbursement into the patients in a
16:06
in a rural population
16:08
or even in an inner city population.
16:10
Our business continuity planning is is really that
16:13
generation with our technology
16:15
allows us to be prepared and protect our
16:18
providers during inclement weather,
16:20
or even worse, during cyberattacks,
16:23
that can happen and and can really cripple
16:25
our health systems. And we have that backup
16:28
of that inventory that's been ordered for that
16:30
customer over a period of time, and we
16:32
are still able to deliver that inventory
16:35
so they can take care of their patients
16:37
while their technology has to be rebooted. So
16:40
thank you for the time today. We are
16:41
super excited about where the market's going and
16:44
how we're able to help our providers moving
16:45
forward in the health system market.
16:47
Well, Deborah, it's so fantastic to have you
16:49
as well. And as you just mentioned, patients
16:51
first, that proactive approach to be able to
16:53
care for patients. It's fantastic to have you.
16:56
And we also want to thank our podcast
16:57
sponsor, McKesson Medical Surgical, And you can tune
17:00
into more podcasts from Becker's Healthcare by visiting
17:02
our podcast page at beckers hospital review
17:05
dot com.