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Dr. Eugene Schneller Co-Founder of Healthcare Supply Chain eXcellence and Professor, Department of Supply Chain Management, W.P. Carey School of Business, Arizona State University

Jim Eckler, Co-Founder of Healthcare Supply Chain eXcellence

David Newton, VP of Product and Customer Success, HANDLE Global

Mergers and acquisitions (M&A) are exciting but complicated endeavors for healthcare organizations. Parties involved in M&A have only grown in size – in 2022, the average annual revenue of the smaller party in transactions in the U.S. rose to an all-time high of more than $850M, $200M more than the previous year. With increasing size comes even more data and, therefore, more opportunities to lose sight of what each organization brings regarding capital assets. Consultancy Kaufman Hall predicts that healthcare M&A activity will continue its upward trajectory in 2023, making it even more critical that organizations involved in transactions strategically track and analyze their capital assets.

Lost in translation?

It’s no secret that a language barrier is one of the most significant issues facing healthcare supply chain leaders. Within a single organization, there may be dozens or even hundreds of ways to refer to the same capital asset. Furthermore, the language used to describe the health of the organization’s asset fleet may not be standardized across various functional areas, assuming that fleet health information is even complete. These challenges are compounded during M&A activities when healthcare organizations consolidate their data sets with other organizations with different processes and nomenclature.

Get a HANDLE on data

HANDLE’s Capital Cycle Management (CCM®) platform can help organizations before, during, and after M&A activity. By utilizing CCM®, capital leaders can easily visualize assets that their organization will be acquiring and position and manage all other assets with support from HSCx, a healthcare strategic supply chain management advisory firm. In addition, CCM® offers organizations standardized and comprehensive insight into:

• Fleet nomenclature
• Fleet health visibility
• Upcoming replacement needs
• Forecasted sourcing opportunities
• Potential revenue generated by selling assets on the HANDLE marketplace or taking advantage of manufacturer rebates

Additionally, CCM® can be leveraged to develop product standardization alignment across your newly formed organization and de-politicize critical capital decisions. Instead of cross-training teams on outdated, disjointed systems and processes, CCM® serves as a one-stop-shop to support efficient and strategic decision-making for budgeting, procurement, management, and disposition of capital.

Managing a wide range of assets requires consideration prior to, during, and following a merger to achieve effective and efficient – if not seamless – merger transitions.  HANDLE is aligned with HSCx to assess the M&A implications through a Total Asset Management Program (TAMP©) assessment. Consideration is given to the management and disposition of all other assets related to inventory, human capital, contractual relationships, real estate, and physical/clinical service contracts. This is especially important for assuring value from contractual obligations for capitated populations.

The deployment of CCM® paired with HSCx’s services can help healthcare organizations successfully navigate M&A while ensuring that there are no gaps or blind spots in capital fleet data. Organizations are empowered to make well-informed decisions about their capital supply chain management by minimizing data disruption.

Reach out today to set up an introductory call with HANDLE and HSCx and learn how you can reinvigorate your supply chain management.

A recent article of ours published by Healthcare Business Insights

Physician Leadership in Supply Chain:  Through Thorough Reflection, a Continuing Evolution toward Evidence-Based Supply Chain Management

Over the last decade industry leaders have documented the case for the health care supply chain management function as part of an integrated delivery system management strategy.  One important characteristic of this effort is the recognition that other sectors have matured as a result of attention to their supply chains and the  elevation of supply chain management roles into the executive suite http://www.beckershospitalreview.com/hospital-management-administration/supply-chain-s-evolution-from-the-basement-to-the-executive-suite.html.  It is noteworthy that a growing number of CEOs, CFOs, and supply chain executives, themselves, recognize that the elevation of the supply chain function and adoption of progressive health sector supply chain management practices may not, in itself, lead to excellence in clinical and managerial practice.  While there is a great deal of discussion about how to best move ahead, progressive systems recognize that dedicated physician involvement in the supply chain processes has the potential to further advance health care system goals to meet the triple aim which involves lower cost, outstanding quality and improved population health.

There is little precedent for action by physicians who are tapped to engage the supply chain.  Best practices do not yet exist and the boundaries for the role remain unspecified.  Unconstrained by precedent, those entering the role are finding a significant “white space” upon in which they can bring together their clinical, analytic, managerial and analytic talents.  It is our hope that this discussion board will evolve as a place to clarify the “secret sauce” within physician-led supply chain practice.  It appears that being tapped for such a role quickly leads to the physician supply chain leader recognizing the strengths that they bring to the role – but also an awareness of their lack of familiarity with supply chain principles and practices.

Our initial observation is that physician supply chain leaders are able to reflect on the appropriateness and volume of the materials employed in practice, work with fellow clinicians in product identification and standardization, and create an environment that provides for a reflective practice of supply chain.  Reflection considers the needs of both patients and fellow clinicians while appropriately considering concerns for the fiscal sustainability of the health care system.  Reflection also allows for clinician engagement with suppliers and others who influence practice through innovation in the materials environment.  https://www.ghdonline.org/designing-provider-incentives/idea/demand-based-purchasing/  Interestingly, just as evidence based medicine has evolved as the gold standard for assessing health care value, the findings from evidence based medicine, appropriately interpreted by physician supply chain leaders, is evolving the gold standard for evidence based supply chain practice.

In the last blog we discussed the need for articulate and directed supply chain strategies.  In this blog, we’ll tell you how to structure these strategies.

In the healthcare world, supply chain organizations need to build strategies that encompass three distinct strategic drivers.  Every program to improve performance should include elements of these three drivers.  To help plan your improvement initiatives, we have summarized the leading elements of many successful change programs.

1. Improve Efficiency

• Reduce Non-standard Product Use through:
  1. Compliance Management
  2. Limited Physician Preference Items

• Clinical Engagement/VAP

• Reduce Inappropriate Consumption through:
  1. Clinical protocols that are sensitive to product use
  2. Clinical and administrative staff training

• Clinical product awareness (digital labelling)

• Effective Sourcing
  1. Leverage scale
  2. Supplier relationship management

2. Improve Medical Efficacy by Facilitating Innovation

• New Technology Assessment
• Facilitation of product innovation

3. Assure System Profitability through Reimbursement

• Link product use to bundled payment programs
• Link patient outcomes to product use