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2015 SCM DEPARTMENT OF THE YEAR


team responsible for paying purchase order invoices also resides in the same location. Building the supply chain process around the value analysis structure and all of its components represented a shift that seemed to do the trick. Since then, Supply Chain has generated more than $43 million in cumula- tive savings to date, according to Hornsby.


Left to right: Ross Carter, Sourcing Specialist; Candace Picagli, CRMP, Systems Analyst-Data Integrity; Chris Jones, Sourcing Specialist; Annette Gravely, Systems Analyst-Print Services.


said. “This SCM realignment has resulted in the strongest leadership team to date.” Supply Chain physically moved to a leased building where it manages a just-in-time distribution operation with a prime vendor (Owens & Minor) for all facilities. Owens & Minor embeds one of its reps on site in an advisory/supporting role that does not re- port to Supply Chain. The Accounts Payable


Value analysis-based purchasing Supply Chain’s focus hinges on the value analysis process and the supporting value analysis teams (VATs) with a commodi- ty-based service-line structure. Riverside maintains 10 VATs covering two primary categories — clinical and non-clinical. The Riverside Medical Group, the system’s phy- sician practice group, and the “Life Long Health” division, which focuses on elderly service needs — interwoven within opera- tions. Together, the VATs serve as “a driving force” on how they conduct product and service evaluations using evidence-based experience and research.


Fast Facts on Riverside Health System Headquarters Newport News, VA


2013 2014 2015 YTD


Facilities 8 acute care hospitals, 3 ambulatory surgery centers, 6 cancer infusion centers, 155 medical group practices, 3 retirement communities, 8 nursing homes, 4 PACE centers, 4 home health agencies, 3 hospice agencies, 1 private duty agency, 2 wellness centers, 1 adult day care, 1 Lifecare at Home, 1 DME and 1 Center of Excellence in Aging and Geriatric Health.


Beds (Licensed And Average Operating): 969 cumulative Inpatient Admissions Outpatient Visits Surgical Cases


Total Net Revenue


CEO: William B. Downey CFO: W. William Austin Jr.


COO: Wade D. Broughman Supply Chain System Director, Supply Chain: Bob Hornsby Joined organization: 1974 at the start of his healthcare supply chain career Supply Chain Managers: 8; Keith D. Dabbs, Senior Manager, Procurement & Sourcing; Kitty Williams, Senior Manag- er, Value Analysis; Thomas McVey, Senior Manager, Operations & Logistics; Ann Tyler, CRMP, Manager, Supply Chain Information Systems, Lena Anderson, Clinical Resource Manager; John Yandle, Manager, Capital & New Technology; Anne Gilbert, Procure-to-Pay Coordinator Supply Chain Employees/FTEs: 95 Supply Chain Conduit to CEO: Bill Austin, CFO GPO affi liation: Premier


Total purchase orders


Total Purchase Order Lines Total PO Spend


Total PO Spend for Medical Supplies Percent of Spend


Electronic Requisitions


Percent of Total Purchase Orders Percent of POs transmitted via EDI Percent of POs transmitted via fax Total Contracts


Total annual operating expenses


Purchasing and contract management Centralized Source: Riverside Health System, July 2015


12 August 2015 • HEALTHCARE PURCHASING NEWS • www.hpnonline.com


FY 2014 74,786


506,776


$154,245,618 $98,646,484 63.95% 44,561 59.58% 56.84% 14.06% 1,601


FY 2015 Annualized 80,086


515,504


$197,745,754 $116,091,404 58.71% 49,248 61.49% 62.95% 12.21% 1,771


$1,427,774,762 $1,453,382,786


Division functions: Accounts payable (PO invoices only), biomedical engineering, capital, courier services, fi nancial analysts, inventory management, mail services, print services, procurement, sourcing, storeroom services, system analysts and value analysis.


31,373


623,071 28,235 $1.02B


31,644


628,473 28,798 1.06B


8,255


166,269 7,263


$276M


Each VAT is supported by a dedicated procurement agent, sourcing specialist and financial analyst from Supply Chain, and represents a commodity across the health system and not just a facility or a department at a facility, according to Dabbs. The Clinical VATs cover Patient Care, Surgical Services, Clinical Lab, Cath Lab/Imaging/Radiology, Clinical Preference Operations and Pharmacy; the Non-Clinical VATs cover Construction Management/Environmental/Facilities, Information Technology/Administrative, Food & Nutrition and Purchased Services. Each one meets monthly. The Supply Chain Executive Steering Committee, which oversees the value analysis process, reports to and includes the CFO for the health system and the Riverside Medical Group, as well as a physician leader, the Chief Nursing Offi cer and Chief Information Offi cer. CFO Bill Austin has assumed the role of executive sponsor of the value analysis pro- cess replacing Wade Broughman, the previous CFO, now COO. Other senior leaders meet monthly with this group. All VA commit- tee chairs are manager-level or higher, most with health system, not individual facility, responsibility. “This team sees the success and assists with overcoming barriers and helps broadcast the message out to the system,” said Kitty Williams, R.N., CMRP, Senior Manager, Value Analysis.


Williams oversees the 10 VATs. Lena Anderson, R.N., Clinical Resource Manager, supports the clinical VATs; John Yandle, Manager, Capital & New Technology, sup- ports the non-clinical VATs. Each VAT col- lects ideas from internal and external sources, including their staff and the C-suite, group purchasing organization (Premier), suppliers and sales consultants. Supply Chain and its clinical staff review each idea to determine if a trial and evaluation is necessary. Most physician requests originate in the Operating Room, Williams admitted. “When the surgeons go away to a meeting or allow a supplier to demo [the] latest and greatest widget, we generally receive a request for an item they ‘can’t live another minute without!’ The request is submitted via the OR Specialty Nurse who forwards it to the Surgical Services Value Analysis Chairperson who calculates the reimbursement impact of allowing this new product to be used against [what’s] cur- rent,” she noted. Supply Chain staffers cal- culate the fi nancial impact based on volume. For example, the Clinical Preference Ops


team, which focuses on cardiac, orthopedic and spinal implants and intraocular lenses, demonstrated keen physician engagement, according to Williams.


“Recently, we have been able to create an ‘all play’ RFP scenario with our total joint


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