By Erin Cristales, Vizient
If the past few years have taught the healthcare industry anything, it's that operating in siloes is no way to do business — or improve patient outcomes.
As providers and suppliers work to build increasingly collaborative approaches to the healthcare supply chain, Vizient is bolstering that mission with the establishment of a more coordinated and impactful strategy to ensure greater connectivity of category and contract management practices. Vizient recently centralized contracting activity in the reconfigured Contracting and Intelligence Center of Excellence (COE) to drive consistency and efficiency across all aspects of the contracting process. Led by Peggy Kaufman, Vizient vice president, sourcing operations, a newly created team of contract managers now handle contract negotiations and bid activities (previously performed by portfolio executives) to ensure that terms and processes are standardized and uniform across all contracts.
Simultaneously, the new role of category manager has been launched to solve for complex, ever-evolving market dynamics. Category managers — who now serve as the primary Vizient contact for suppliers — concentrate on long-term strategy development within their assigned product categories while working in conjunction with the appropriate member and supplier-facing teams. Category management augments customer resources with Vizient's, bringing experts, insights, data, technology and contract portfolios to bear in every spend category.
Why is this important?
Ultimately, providers and suppliers can expect greater value from this new approach as better relationships and more collaboration yield increased opportunities to improve collective performance for all stakeholders. It comes down to a win-win-win perspective and striving to achieve the 6R's.
"Since the pandemic, health systems have faced unprecedented challenges," said David Gibson, Vizient senior vice president, spend management solutions, who leads the category management initiative. "The number of medical products being produced overseas, large swings in demand, constraints on manufacturing and transportation, labor shortages and geopolitical crises have all contributed to supply chain issues. With most hospitals operating on very thin margins, and the cost of supplies and temporary labor increasing by 10-20%, we have a significant crisis that necessitates finding offsets to bend the cost curve."
That's why Vizient is uniquely committed to helping providers be more efficient without compromising quality outcomes, he said.
How does it work?
Vizient's new approach involves expanded efforts to improve supplier performance — which entails convening deeper, more innovative collaborations between suppliers and providers — and continued investment in technologies and analytics to improve insights into products, categories and spend visibility.
It also means drawing on Vizient's core tenets — environmentally preferred sourcing (now more broadly known as environmental sustainability), supply and price assurance, supplier diversity, and insights and intelligence — to enable more strategic conversations that go beyond a transactional focus on measures such as price, volume or fill rates. The key, Gibson said, is to have a laser focus on quality outcomes and the overall cost of care.
"We know that these strategies and programs result in far more value and savings while serving as drivers for other provider goals," he said. "We are optimizing the impact for every dollar of spend — and that impact extends far beyond the price of each item procured."
What can stakeholders expect?
Maximizing every dollar spent also drives the contract management approach, which is about "looking much more globally at how products move through the ecosystem of providers and suppliers," Kaufman said.
"This is about pivoting toward a more longitudinal look at the value Vizient can bring to providers," she said. "The challenges they're facing are only getting more complex. So, we're stepping in to lock arms with them and help provide solutions to everything, including the rising cost of labor, goods and services, and pharmaceuticals. There's a lot of excitement about the efficiencies that partnering differently can create and the opportunity to bring more and better contracts to life faster."
While the category and contract management teams are technically separate, their focus is on combining their specific expertise to create a more seamless — and customized — experience for providers and suppliers. After all, tough times call for bold changes.
"This is a journey, and we continue to make progress on this path," Gibson said. "We are committed to standing shoulder to shoulder with our provider and supplier stakeholders to collaborate on the ways we can all bring more value and impact across the spend spectrum."