Deep dive into Dartmouth Health’s supply chain transformation 

Dartmouth Health is a renowned health system comprising a diverse network of community hospitals, clinics, and healthcare services throughout New Hampshire and Vermont. With an esteemed academic medical center deeply tied to Geisel School of Medicine at Dartmouth, the company strives to deliver outstanding patient care. Dartmouth Health’s specialized facilities, like the Dartmouth Cancer Center – one of only 56 NCI (National Cancer Institute) designated comprehensive cancer hospitals in the US – demonstrate its commitment to cutting-edge treatment. Additionally, as the sole pediatric hospital in New Hampshire, Dartmouth Health Children’s exemplifies Dartmouth Health’s mission to serve local communities. Beyond prestigious institutions, the company also incorporates numerous nursing, rehabilitation, hospice, and home healthcare services. Kenneth J. Kelliher, System Vice President, provides an overview of Dartmouth Health’s journey in terms of supply chain.  

Kenneth J. Kelliher, System Vice President Dartmouth Health
Kenneth J. Kelliher, System Vice President Dartmouth Health

“The supply chain at Dartmouth Health has dramatically changed the traditional focus on the procurement of goods and services, evolving from a traditional model to planning for a supply chain that will emerge as a central informational hub within the organization. This transformation will empower the supply chain to not only drive strategic decision making but also to become a catalyst for critical clinical projects and missions, including patient safety initiatives. Moreover, it holds the potential to generate substantial revenue for Dartmouth Health through enhanced capabilities and strategic positioning. Historically, supply chains in healthcare operated within a narrower framework, primarily focusing on tactical activities like product cost containment and customer service. Limited access to comprehensive data across critical systems, such as utilization and reimbursement, hindered innovation and expansion in line with industry standards.  

“However, over time, advancements in technology and data analytics have empowered our supply chain to overcome these barriers. Improved data integration, accuracy, and visibility into critical metrics have enabled Dartmouth Health’s supply chain to transition into more strategic roles within the health system. As a result, we can now proactively manage inventory, optimize procurement processes, and contribute substantially to patient safety initiatives by ensuring the availability of quality products and services. Furthermore, the modernization of Dartmouth Health’s healthcare supply chain has unlocked new opportunities for revenue generation and cost savings. By leveraging data-driven insights and adopting innovative strategies, we are better equipped to navigate the complexities of the healthcare landscape, drive operational efficiency, and enhance patient outcomes. Looking ahead, we aim to further improve supply chain management by embracing emerging technologies such as prescriptive analytics and artificial intelligence, while fostering collaborative partnerships across the healthcare ecosystem,” he explains.  

Forward-thinking approach 

Kenneth discusses the products and services offered across Dartmouth Health’s supply chain function. “As a critical component of healthcare operational expenses, the supply chain ranks as the second largest expenditure after salaries. It encompasses a wide array of necessities, ranging from critical medical and surgical supplies like gloves, bandages, and medical devices to administrative essentials such as computers and IT equipment, along with purchased services like linen, repairs, and outsourced services. Dartmouth Health’s supply chain innovation and value-added services are divided into two categories: informational and content, and product disintermediation services. On the side of informational and content services, we distinguish ourselves in the industry through the creation of a unified database linking expense, utilization, and reimbursement attributes. By consolidating data from over 30 disparate applications and incorporating normalization and repair tooling, Dartmouth Health has established a robust platform for enhanced reporting and analytics. Consequently, our supply chain acts as an informational hub, providing critical insights for more effective resource management, both financial and clinical. In our product disintermediation services, our direct negotiations with overseas manufacturers, informed by pandemic experiences, embody Dartmouth Health’s forward-thinking approach. This strategy not only aligns with the global trend toward cost reduction and supply chain optimization but also positions us as a leader in healthcare supply,” he highlights. 

Fundamentally integral to the patient’s experience, Dartmouth Health’s supply chain serves as the backbone of its healthcare delivery. “Its importance cannot beDartmouth Health distribution center overstated; our supply chain ensures that healthcare providers have the necessary tools and resources at their disposal at the right time, place, and cost. This seamless operation is crucial for maintaining the quality and continuity of patient care. Nonetheless, the role of the supply chain extends beyond mere logistics, directly impacting patient outcomes. A well-managed supply chain ensures that all medical supplies are readily available, thus enhancing clinical care and patient satisfaction by minimizing delays in treatment and improving overall experiences. Besides, the efficiency of the supply chain directly influences the cost of care. By optimizing supply chain operations, Dartmouth Health achieves substantial cost savings, consequently lowering expenses for patients and making healthcare more accessible and affordable. In an era marked by rising healthcare costs, the supply chain’s role in managing expenses is more critical than ever,” Kenneth reveals. 

In its quest to foster the ultimate supply chain, Dartmouth Health is focused on cutting out non-value drivers. “Two pivotal strategies have been at the forefront of our efforts: disintermediation and the implementation of our Service Line Excellence program. Over the past two years, our focus has been on disintermediation, which consists of strategically reducing or eliminating intermediaries in our supply chain to source products directly from manufacturers. Not only does this approach incur cost savings, but it also enables us to gain greater control over our supply chain, enhancing transparency and improving supply reliability. By establishing direct relationships with manufacturers, we have negotiated better prices, reduced lead times, and ensured a steadier supply of essential medical products and equipment. Meanwhile, the Service Line Excellence program is a holistic approach to patient care and supply chain management. With a multidisciplinary team of senior leaders, we have strived to create a framework to optimize every aspect of a patient’s journey through the Dartmouth Health system. Hence, every patient interaction is intentional, safe, and efficient, from admission to discharge. Again, this program is not just merely about cutting costs; it’s about improving care quality by ensuring that every action and resource we use adds value to the patient’s experience. The Service Line Excellence ideal embodies our commitment to operational excellence, aligning departmental objectives to streamline processes, enhance patient outcomes, and eliminate waste throughout our operations. Both strategies are interconnected in our goal of removing non-value drivers from our supply chain. Disintermediation helps cut unnecessary costs and complexity, making our operations leaner and more responsive. Concurrently, the Service Line Excellence philosophy allows us to refine clinical and operational practices, ensuring that every element of the supply chain contributes to delivering the highest quality of care at the most competitive price,” informs Kenneth.  

Successful relationships 

Passionate about working directly with suppliers and contract manufacturers, Kenneth unveils his secret to fostering longstanding relationships. “At the core of nurturing such partnerships lies a fundamental principle: cultivating mutually beneficial opportunities. Creating an environment where all parties thrive is paramount, and fairness is essential in negotiations. I believe in the importance of equitable economic arrangements, thus ensuring that deals are not only profitable but sustainable for all involved. This approach fosters a sense of partnership over competition, laying the groundwork for trust and respect. Respect through the acknowledgement and appreciation of each party’s contributions is the cornerstone of successful relationships. This respect manifests through transparent communication, reliability, and a genuine interest in understanding the challenges and goals of our partners. By treating our suppliers and manufacturers with the dignity they deserve, we create a positive and productive working environment conducive to long-term collaboration. Additionally, strategic alignment is vital to fostering strong relationships. We collaborate with partners, such as ImageFirst, Cardinal, WaveMark, Prolucent and Flo-Tech among others, who comprehend our objectives and are invested in helping us achieve them. Through mutual support for one another’s long-term goals, we create a synergistic relationship that extends beyond individual projects or contracts, fostering collective growth and success. These principles guide our interactions and negotiations, ensuring that each relationship we cultivate is poised for sustainability and growth,” he ends. 

Through practical innovation and partnerships, Dartmouth Health’s supply chain is well equipped to continue elevating patient care.