By Erin Cristales, Vizient
Molly Zmuda, vice president of spend management services and delivery, assumed leadership of Vizient's supply assurance team just a few weeks before Hurricane Ian made landfall in August 2022. Though there was no stopping the storm, the approach inside Vizient was calm, collected and collaborative — after all, no matter how tough the times, Zmuda and the team's reflex is to join forces for providers' success.
"It all comes back to the relationships across the enterprise and with our provider community and supplier partners," said Zmuda, who in her role leads spend management program development and execution across supply and price assurance, environmental sustainability, and insights and intelligence. "It's that ear-to-the-ground tactical work in our partnerships that ultimately has real strategic significance. When we can bubble up best demonstrated practices at scale to create solutions and advance change together — that's some of our most valuable work in spend management."
That approach is especially critical currently, as providers' labor and non-labor expenses are growing exponentially with ongoing raw materials shortages proving particularly burdensome. Supply assurance and price assurance are core areas of focus for Vizient, and to provide even greater visibility into the factors affecting the market, the Budget Impact Projections report now includes a public version with manufacturing briefs on the economy, labor, energy and raw materials markets that will be updated once per month for Vizient's provider base.
"We produce an incredible array of intelligence for providers," Zmuda said. "And those insights include the latest perspectives on macroeconomic trends and the continued cost pressures for the healthcare industry today."
Here, Zmuda discusses the importance of supply assurance and price assurance — and how building better partnerships is an important strategy to weather current and future market challenges.
Vizient's Budget Impact Projections report is newly publicly available and updated more frequently. How can providers use the BIP as a tool to assist in their financial planning and why was it important to make this resource more widely available?
Vizient has produced the Budget Impact Projections report for years, and this is a trusted and valued resource across our provider community. It's pivotal to the budgeting process of our member organizations because it provides an overall projection of non-labor operating expense growth as well as perspective on inflation for key spend categories. Equipped with this information, it's a great opportunity for supply chain teams to reach up and across their organization — to partner or influence in new spaces or new ways. That really is reflective of how Vizient wants to enable supply chain leaders to make the most of every dollar of spend.
Clearly, supply constraints and cost are two healthcare supply chain issues that are top of mind for providers. Can you talk about the interrelatedness of supply assurance and price assurance, and how to best approach the intersection of the two?
At Vizient, we are uniquely committed to total value and broader performance improvement opportunities in spend management through a combined focus on what we're referring to as our "core tenets" of spend management. What we're learning as a team and ultimately as an enterprise and industry is that all of these issues — assurance, sustainability, diversity — are interrelated and additive. And so that absolutely plays out in the assurance of supplies and price, and our most foundational need to ensure access to reliable, high-quality and affordable care for the communities our providers serve. In the assurance space, persisting disruptions are an incredible burden to the provider community along with the financial pressures associated with inflation or attributable to limited competition. Those factors can combine to disrupt access to critical products or services that are required to care for patients and communities – and even accumulate over time the threaten the viability of a provider organization's sustained operations.
Vizient often describes itself as a convener of providers and suppliers — why is that so important when it comes to bolstering supply assurance and price assurance?
A critical success factor for our progress in assurance is our enterprise commitment and legacy in performance improvement, enabled by visibility, along with collaboration and ultimately partnerships. With all three, the underlying common thread is an action orientation informed by best demonstrated practices. So, as we bring providers and suppliers together, we find opportunities to amplify what's working, what it took to be successful, and how that success might be achieved at scale in new and different ways. Vizient is really proud of the work that we do and the role that we play to catalyze industry-wide change enabled by data, technology, expertise – and our deep relationships across the provider and supplier communities
You mentioned the importance of visibility. Are you seeing transparency in the industry grow?
It's a really intricate issue and an undeniable need. It's important that we fully understand the value proposition to all parties in the equation. At Vizient, we believe that value proposition is performance improvement, including our core tenets of spend management with their focus on total value. We know it's a journey, and we are collaborating to bring those partners to the table to understand how we can support everyone in taking steps forward. There's certainly a lot of industry activity in this space and a great level of receptivity to doing this new type of work together because it's just simply where the industry — and frankly, the world — is going.
There are strategies providers can use to mitigate the effects of manufacturing and product availability constraints.
What types of strategies can providers use to mitigate the effects of manufacturing or product availability constraints?
This is a significant point of transition in the industry. Many providers and suppliers spent a lot of time reacting to disruptions during COVID and after as a result of all of the challenges in the healthcare supply chain. But today, there is more interest in hardwiring assurance as an ongoing facet of risk management and spend management. Pivoting to anticipate these challenges — predicting and projecting — is a growing area of focus. Vizient is excited to enable the cause in a variety of ways. For instance, as we associate a new Assurance Score to more than 1 million products in our item master we are creating new perspective on spend management performance. Our category teams are utilizing extensive and an ever-expanding portfolio of intelligence to inform their work — regularly consulting inflation indices, raw materials attributes and considering the upstream supply chain along with best demonstrated clinical and operational practices in utilization or conservation for the products and services they manage.
These industry-wide challenges and opportunities in assurance will require collaboration and input from providers and suppliers alike – we have to work together. And Vizient is in a unique position to create that new perspective and to intelligently address these issues — to catalyze innovation and create new alternatives and solutions for our providers. These efforts are enabled by our industry-leading capabilities. It is a full circle.
How is domestic sourcing helping to increase raw material availability?
An emphasis on domestic sourcing is important for a variety of reasons. Circling back to the interrelatedness of assurance, sustainability, diversity: As perhaps a provider makes an investment in a net-new local diverse supplier operation, they generate jobs and develop the economy for the community they serve. In turn, that organization and community experience gains in terms of sustainability by reducing shipping and storage and, therefore, emissions and energy usage. So, domestic sourcing carries strategic significance on a variety of levels, is an increasing area of focus for the industry, and we do recommend that it's a facet of any organization's supply assurance and broader spend management strategies.
That being said, the broader issues of raw material availability and macroeconomic challenges to the supply chain are still at play. It's important to think and plan upstream, to stay diversified appropriately and to collaborate across all parties to the value chain for a combined focus on risk management. Vizient is excited to use our data to create and highlight domestic and near-shore opportunities for our providers so that they can participate accordingly.