By Erin Cristales, Vizient
Think of the aspirational concept most integral to the healthcare supply chain of the future and chances are you’ve landed on “transparency.” After all, many providers point to the opaqueness of the value chain as one major reason COVID-19 so easily derailed product delivery. How can you count on supplies arriving at the right place at the right time (and at the right price) if there’s little visibility into important information like the amount of inventory available and potential alternatives if that inventory is lacking?
Enter Vizient’s new assurance score, an industry first for healthcare that rates risk for a product, category, supplier or provider. The score allows providers broader visibility into the market, which they can then apply to their sourcing decisions — in essence, leveraging data in a more predictive, proactive way.
“What makes this initiative transformative is that we’re building a broader focus on risk management for a more reliable supply chain to inform local strategies and spending decisions,” said Molly Zmuda, Vizient vice president, spend management services and delivery. “Right now, when providers purchase a product, one of the only data points they can consider is price because a really crisp, consolidated, reliable perspective on anything else isn't available. So, we want to inform that decision making with objective total value perspective by bringing forward a singular assurance score and new comparative analytics to understand and improve performance.”
What differentiates the new assurance score?
A collaboration between Vizient’s assurance and data science teams, the assurance score is built on Vizient’s risk assessment principles, which include providing a global, national, manufacturer, product category and product assurance assessment; benchmarking with organizations “like me”; creating actionable insights with drill-down capabilities that identify product and manufacturer alternatives; and driving performance improvement for both suppliers and providers.
More specifically, the score — which complements the badging initiatives and standards emerging from the Healthcare Industry Resilience Collaborative, of which Vizient is a member — advances reliable patient care and quality through:
- Product-, service- and supplier-level insights, with a risk score of high, medium, moderate or low
- Informed, agile decision making based on market dynamics
- Emphasis on transparency, alternatives and partnerships
- Multi-faceted resiliency strategies
“In supply chain, we continue to navigate local preferences and practices — these preferences distract teams from bigger opportunities and create inefficiencies, particularly across many essential product categories,” Zmuda said. “Through the national perspective that we're creating, Vizient is bringing forward objectivity to this risk assessment by taking a scientific look at things like functionally equivalent products. We're cutting through the noise to create more standard practices in the industry and make change easier so that providers can ensure the best possible patient care, advance population health and pursue the greatest value in every dollar spent.”
How does it work?
It’s clear that the healthcare supply chain is hardly one-size-fits-all, which is why the score is about building risk mitigation strategies through timely, actionable information and solutions unique to providers’ purchase histories. That means prioritizing alternative manufacturing ventures and assurance intelligence, proactively activating category management strategies and clinical solutions, and integrating benchmarking into Vizient platforms to inform real-time decisions and risk mitigation.
“Vizient is harnessing the data that we have across our provider customers to give a market view around what challenges are happening around supply assurance that the provider may not able to see because they're only looking at their own data,” said Beth Godsey, Vizient senior vice president, data science and methodology.
The assurance score will be rolled out in four phases. Phase one includes key metrics related to the availability of product and functional equivalents.
The new assurance score is meant to provide increased transparency for both suppliers and providers — helping them to more broadly see what’s happening in the healthcare landscape.
What are the benefits for providers and suppliers?
Too many times, Godsey said, industry stakeholders can’t see the forest for the trees. Now they have a true line of sight.
“Health systems monitor critical supplies on a daily basis to ensure they’re meeting patient needs,” she said. “But they may not necessarily see that there's been some broader shift in the market with specific manufacturers or suppliers that put certain products at risk or that there are distribution or labor challenges in specific regions that lead to transportation issues. With the assurance score, we can help them see more broadly what’s happening across the healthcare landscape.”
It's also about consistency, with the score providing an objective way to assess risk industrywide.
“During COVID, many providers thought that they were protected in their isolated areas but quickly realized that risk and assurance are global issues,” said Kevin Johns, Vizient senior director, core tenet programs. “Most providers either don’t have access to that global data or it costs too much money. The assurance score is the no-cost solution.”
Suppliers too can benefit from the score as it will elevate their performance by allowing them to see where they’re doing well and where there is room for improvement.
The assurance score will provide empirical, objective evidence that shows they are a low-risk supplier and the benefits of the sourcing decisions they make. For instance, if a supplier changes some material part of their supply chain, the data will clearly show the outcomes of that action.
“Think about the statistical value — once we input more data sets, we will be able to predict potential scores looking at global trends because we have 60% to 70% of healthcare purchases going through our data set,” Johns said, noting that the score enables prediction of how long a disruption — like a natural disaster — would likely impact a supplier and the amount of time it would take to recover from it.
Additionally, suppliers that have multiple distribution channels will have a more granular view of how their product is being delivered and received by providers. This view will allow all suppliers greater awareness and the ability to leverage a true performance indicator to drive business.
“For suppliers, this offers an opportunity for their organizations to showcase a level of transparency and the investments they have made in supply chain excellence to ensure resiliency — broadening the way they can offer value to providers and deepening their customer relationships,” said Bryan Grossman, senior vice president, supplier performance and category management.
Of course, even after the pandemic, there is still a hesitancy to share information and create visibility within the supply chain. That’s why gathering this level of information is ultimately a strategic endeavor — and requirements and incentives will be important, Zmuda noted.
“We’re looking at all the dynamics and sensitivities around sharing that information,” she said, “and how we can create more trust to achieve greater transparency.”
Learn more about how Vizient builds collaboration with suppliers, distributors and providers to strengthen supply assurance across healthcare by emailing Kevin Johns.