Serving nearly half a million patients across 36 medical offices, AdvantageCare Physicians is the largest physician-led medical group in the New York metropolitan area. The company began as a startup in 2013, born out of four separate medical groups that affiliated to become one organization. The group quickly expanded and to Brian Jaffe, associate vice president of supply chain management, it felt as though the group grew overnight.
“It’s a culture of rapid change,” Jaffe says. “We’re still developing policies and procedures. We’re rapidly adapting to the new organization as well as to the marketplace.”
Jaffe’s healthcare career had mainly been related to healthcare operations, department leadership positions at some of New York’s premier academic medical centers. Jaffe was working with a large NY based medical insurance company with ties to each of the four legacy groups. He switched jobs to be associate vice president of supply chain when the new company was formed. Using the supply chain principles he acquired during his time as an administrator, he quickly adapted to his new role and the exciting culture within the group.
Jaffe quickly identified the benefits of interacting with other healthcare supply chain professionals and joined the Association for Healthcare Resource & Materials Management of the American Hospital Association (AHRMM). Through AHRMM, Jaffe more recently earned the designation as a Certified Materials & Resource Professional (CMRP). Jaffe also realized the need to recruit solid supply chain professionals from within the healthcare community because he knew it would be critical to growth and success. He brought in Ceasar Trinidad to be the director of supply chain operations and procurement. Trinidad had previously served as director of purchasing and supply chain operations at a leading New York academic medical center. Along with the director of biomedical equipment, Dan Talia, the team quickly hit the ground running.
“The staff has been very engaged because we’ve been able to rapidly see the results,” he says. “We’ve saved approximately $7 million in our first full year and, over the term of all of our negotiated agreements, we have over $15 million in contracted savings. When the staff is able to see such strong results in such a short time, it excites them and keeps them engaged.”
Jaffe laments that, as time goes on and AdvantageCare finds its balance, results will become more challenging to achieve. But for now, the momentum excites everyone in the supply chain department. The rest of the company is embracing changes implemented to deliver the highest quality care to the patients who are the backbone of the company.
Since the combined group is now a major healthcare delivery operation and no longer a “mom-and-pop” operation, it must standardize everything across the board so everyone from clinicians to staff practices and performs in a coordinated manner. This is a huge adjustment for the physicians and other employees who are adapting to new electronic medical records, electronic ordering, billing rules and coding rules.
Additionally, it’s important for AdvantageCare’s vendors to understand the goals and objectives the same as it does. “Especially with a new organization, we need to establish meaningful partnerships early on,” Jaffe explains. “We do that by gaining their respect and treating them with respect. With our staff, they understand the supply chain better than anyone. They have wonderful ideas and have an understanding of whether something will work or not. They have a better chance of getting it right than we do in management since they live it on a day-to-day basis.” Jaffe expressed that “paying close attention to your own staff is a critical element of success.”
When AdvantageCare was formed, it was purchasing more than 55,000 unique items for its 36 locations. But thanks to a concerted effort to standardize, consolidate and ultimately eliminate items, the company has whittled that list down to 5,000 items, utilizing fewer vendors and distributors, thus saving more year over year.
“It’s getting the clinical buy-in as we change clinical items,” Jaffe says. “It’s our goal to create a better dialogue between the supply chain and the clinicians so that ordering is streamlined and automated where possible.”
Fortunately, the supply chain department has made it easier for staff to order what they need. Most of the items are available to order on the company’s various formularies. If not available on its formulary, the staff must put in a special request that is reviewed by supervisors and the appropriate commodity based supply chain manager prior to final approval. Jaffe is proud that the group has reduced the approval time for special requests to be as efficient as seven-and-a-half hours from requisition final approval to order placement.
“We don’t want supply chain to be a roadblock to our physicians,” Jaffe says. “We want supply chain to add value and be viewed as problem-solvers. We want our clinicians practicing medicine and providing world-class patient care, not worrying about supply orders.”
Since AdvantageCare is still very new, everything about it is fresh, including its challenges. One challenge the company faced was combining all four electronic medical records (EMR) into one consolidated EMR system in 2014. Now AdvantageCare uses a single electronic record platform, accessible by clinicians across the network and patients through the patient portal, to be patient-focused and performance driven. AdvantageCare also implemented a new ERP system at the start of 2014. The group is able to receive and analyze data that can assist with ordering and better understanding the usage of all of the products and services being procured.
The supply chain structure at AdvantageCare was set up based on commodity rather than geography. For example, if someone specialized in medical supplies, that person is now in charge of the supply chain of medical supplies across all 36 locations instead of having responsibility for all commodities for an individual location or group of locations.
The group uses electronic data interchange (EDI) with numerous vendors, and is working on electronic invoicing to improve both ordering and turnaround time. By analyzing the trends, the supply chain department can ensure the health centers always have what they need, while also reducing order quantity and size.
“We have a model that our vendors seem to really like,” Jaffe explains. “They see us as a large influential organization in the competitive New York marketplace. By having successful partnerships with us, it has enabled them to dig deeper, sharpen their pencils and come to us with great value propositions. We’ve deeply negotiated our distribution costs and everything is delivered directly to the location. It’s important that we reduce expense, standardize and ensure we’re providing quality supplies for the same price or less.”
AdvantageCare is going commodity by commodity to determine what is necessary for the group and what isn’t. The group is in the process of centralizing its document storage to one vendor, while simultaneously reducing the footprint by more than 50 percent. Additionally, it is changing its point-of-care lab equipment with savings around $200,000, and then it will tackle shredding services.
“Every area of spend is up for discussion and our team is bringing great ideas to the table to consolidate and lower costs,” Jaffe says. “We’ve been able to build all of this from the ground up, which has been extremely challenging and rewarding.”
Jaffe remains proud of the fact that, in less than two years, AdvantageCare has built the supply chain department into a robust and efficient department that is providing great added value to the organization.
“I came into this job without traditional corporate supply chain experience, but we were able to amalgamate a team that developed an extremely strong and successful supply chain organization in a short amount of time,” Jaffe says. “Since coming to this job, I’ve been chanting the supply chain mantra from day one. People need to understand that supply chain is not just a purchasing function. A supply chain is a necessity for the organization to achieve its cost, quality and outcomes objectives.”