Since it became Rhode Island’s first health system, Lifespan has been on a mission to improve the health of its patient population in Rhode Island and southeastern New England. In recent years, part of that mission has focused on improving the strategic, administrative and operational oversight of the organization’s supply chain activities.

Founded in 1994 by Rhode Island Hospital and The Miriam Hospital, Lifespan is a comprehensive, integrated, academic health system affiliated with The Warren

Alpert Medical School of Brown University. Rhode Island Hospital also has the region’s only Level 1 trauma center. Partners in the Lifespan system also include Rhode Island Hospital’s pediatric division, Hasbro Children’s Hospital, Bradley Hospital and Newport Hospital.

“This is one of the top hospital systems in New England with a number of centers of excellence,” Director of Supply Chain Operations Ed Bonetti says. “Lifespan, through its partners, provides a complete spectrum of services to Rhode Island and southeastern New England.”

Transformative Effort

Bonetti has been with Lifespan for a little more than six years. Prior to his time with Lifespan, his career in the supply chain and operational world was focused on manufacturing and distribution. Bonetti has brought his commercial expertise into the healthcare environment. This outsider’s perspective, Bonettie believes, has allowed him to provide strategic and functional guidance to the development and expansion of clinical areas and key service lines.

“When I joined Lifespan, bringing in supply chain expertise from outside the industry was a bit of an anomaly,” Bonetti says. “Now it is becoming more common.”

Among Bonetti’s priorities at Lifespan has been an effort to engage physician leadership to bridge the clinical, operational and financial gaps that exist within such a complex healthcare organization.

Thanks to the perspective gained by years outside of the healthcare industry, Bonetti has worked to leverage his experience in lean practices to introduce rapid-cycle process improvements in everything from procurement, distribution and value-analysis to data analytics and vendor compliance.

“In a hospital setting, supply chain is very different than in manufacturing and other industries,” Bonetti says. “There are some of the same challenges. You need to get the right product at the right price and time, but in healthcare there are added layers of complexity.”

One of the major differences between healthcare and industries like manufacturing is the lack of predictability. Whereas producing the same widget over and over again is predictable, no two patients are exactly alike.

“There is a lot of variability because of differences in patients, as well as in how different physicians perform many different procedures,” Bonetti says. “Rhode Island, The Miriam and Bradley hospitals are also teaching hospitals, and there are always new technologies and treatments emerging. We have to manage a lot of data to deal with this variability so we can qualify and quantify opportunities.”

Part of Lifespan’s effort to improve supply chain has focused on working with physicians to get a better understanding of the needs of their practices and link those needs to supply chain functions. This has required an extensive amount of communication in order to validate data and identify opportunities for change.

“As we’ve looked for opportunities to improve cost, we’ve also looked to improve outcomes,” Bonetti says. “When interacting with clinicians, we look to get credible data and share it in a transparent way. We have data on the usage and costs of products, as well as the vendors and suppliers in a given space. We get the clinicians’ perspective on our analysis so we can validate and refine how data is presented to make it actionable.”

The Right Partners

Another focus for Bonetti’s team has been standardization of vendors and minimization of the variability of products used. Lifespan has worked to identify preferred partners and find ways to address variability in the utilization of products and technology. The company works with a number of vendors and suppliers, such as Boston Scientific, Covidien, Medtronic, Siemens, Claflin Company and Abbott Vascular, and it has been able to implement contracting with suppliers and eliminate cost variance on clinical equipment.

“In our efforts to engage with the supplier vendor community, we try to be equally transparent with them and align our relationship so we can manage costs and make things stable and predictable,” Bonetti explains.

“Once you have established that stability, you can maximize the highest-possible performance in operational efficiency, clinical outcomes and patient experience.”

After neutralizing the cost element, Lifespan’s supply chain team works with clinicians to determine clinically equivalent products. Once determined, the supply chain works with vendors to establish pricing models. Bonetti explains the end results will yield predictable supply expense budgets that will enhance its financial performance as a healthcare provider.

Lifespan’s supply chain team is strategically positioned so it does more than manage cost. The idea is to have supply chain costs linked with other key metrics that are strategic to the organization. The supply chain organization is actively helping Lifespan to be both fiscally responsible and clinically excellent.

There are many challenges in the healthcare marketplace, such as margin and reimbursement compression. As healthcare moves away from the fee-for-service model and toward pay-for-performance, supply chain management will play a key role in helping organizations like Lifespan to control costs while delivering the highest quality of care.

“Through predictive modeling and analytics, we can devise a roadmap for what costs should be so we can be sure we are on the right track,” Bonetti says. “Healthcare is an intrinsically a rewarding profession because we are able to see, first hand, how our efforts help our physicians improve the quality of life of our patients and our community.”