Mark Weaver’s Leadership Promotes Greater System Integration, Stronger Contract Compliance for Hospital Sisters
Formally educated as an accountant, Mark Weaver moved into the supply chain field 27 years ago as hospital supply chain director. That accounting background probably has helped him in one of his primary roles: moving the 13 facilities of Hospital Sisters Health System (HSHS) toward supply chain integration to maximize savings. “All the hospitals had been working independently, so we didn’t do much as far as a structured, systemized approach,” he says. “Now each hospital helps us in our work to realize the best pricing for the IDN.”
Weaver joined HSHS 24 years ago, first working on the IT-focused side of supply chain for eight years, then transitioning into director of supply chain at HSHS’ St. Anthony’s Memorial Hospital in Effingham, Ill. About six years ago, he became director of contracting and procurement for HSHS’ 13 hospitals in Illinois and Wisconsin.
Meeting PPI Goals With SourceTrust
One way HSHS accomplished greater integration was to engage with SourceTrust on major contract areas for medical device initiatives, such as spine implants, cardiac rhythm management devices and cardiac stents.
“After nine months of work, we reached our targeted savings,” Weaver says. “It was a very beneficial process. HSHS reduced supply expense on physician preference implants by $11 million, and we’ve reduced overall supply expense by $20 million.”
HSHS decided to give its physicians open choice on preference items, which meant any vendor could enter the negotiations as long as they agreed to certain price points. After HSHS completed a financial analysis to calculate current spend for all its vendors and its hospitals, SourceTrust provided pricing benchmarks and savings targets.
“The difference with what we were currently paying and SourceTrust’s targets was our savings opportunity,” Weaver explains.
The process was very systematic to ensure all leaders were on the same page. His internal team and SourceTrust met with the C-suite of all eight hospitals working in spine and educated them on the purpose, function and savings opportunity. Once the HSHS/SourceTrust team explained the next steps to top leadership, it scheduled one-on-one meetings with spine surgeons at every hospital to explain why HSHS was going through this process and what it would mean to the doctor.
“We realized there could be pushback because of personal and/or financial interests, but regardless of that, our expectation was that the vendor would meet our price points and that the local sales rep would provide the same service,” Weaver says. “We explained to the surgeon that we’re just looking for a much better price and trying to align the price with our reimbursement. We told him that he could still use the same technology and same manufacturer and work with the same sales rep. All we asked is that if the vendor came to them with complaints about pricing, that the doctor be informed and support the decision. We want them to convey that HSHS is being fair with our pricing.
“I’m happy to say that we didn’t have any situations where a surgeon had to change a product that they were accustomed to using,” Weaver continues. “Because the process didn’t impact their daily operations at all, we got very little pushback.”
“HSHS had a very aggressive savings goal, and they achieved it,” says Doug Jones, AVP, Business Development with SourceTrust. “One of the main reasons is because HSHS stayed very engaged with the SourceTrust process. Mark never wavered, and his level of energy remained as high at the end of the process as in the beginning.”
HSHS’s next SourceTrust engagement is with orthopedic implants, and both Weaver and Jones agree that the process is going smoothly, in large part because of clear, dynamic communication.
“Mark has a very good relationship and rapport with his facilities,” Jones says. “He has a pulse on what’s involved, and he really understands the market and his facilities.”
The secret to hitting the aggressive target HSHS set for itself, Weaver says, was to work hard to gather sufficient information before they began any analysis.
“You have to have the foundation of data to know where your current spend is,” Weaver says. “To be able to understand the potential dynamics of making changes, you have to determine your major vendors, what products you’re using with those vendors and what manufacturers your doctors are using.”
Integrating 13 Hospitals Into One Stronger System
One of HSHS’ challenges to integration has been that it doesn’t yet do centralized purchasing. “We have 13 purchasing departments with 13 different systems of purchasing, which means 13 vendor numbers for the same vendor,” Weaver explains. “Our first challenge was to bring in the data for those 13 hospitals. Once we did that, we began analyzing it to understand what we currently buy, our savings opportunities and how we can move our current portfolio to HealthTrust contracts.”
For example, HSHS realized it was buying five or six manufacturers’ brands of elastic bandages. After sending that list to HealthTrust’s contract vendor for a cross-reference of similar products, it pulled in the pricing information and compared it to the contract practice cost.
“We sent that file to the hospital for them to compare their product cost for each item. The file shows ‘here’s what you’re buying, here’s what you should be buying, here’s current price and here’s contract price.’ The difference per usage is their potential savings.”
The hospital then contacts local sales representatives to review and obtain products, and converts future purchases to the contracted vendor. For larger categories that are more complex, HSHS develops project plans for those vendors.
“If we know there’s going to be resistance or pushback, we will centrally manage that contract for a hospital, helping them out, charting the progress and monitoring any challenges.”
To facilitate these changes, the hospitals have monthly conference calls and meet face-to-face twice a year for more high-level communication.
Developing New Processes for Ensuring Compliance
Weaver has led the HSHS Supply Chain Analytical Team in developing several processes to boost integration and compliance across its 13 hospitals. First, HSHS has done a financial analysis and developed contract action plans for about 100 contracts. Inspired by the HealthTrust Response biweekly email to members, Weaver communicates the status of a contract and guidelines on implementation via HSHS Weekly Contract Updates, which include a cost savings summary, product cross references and a formulary line to assist in the effective and timely implementation of HealthTrust contracts.
HSHS also used the contract action plans as the basis for refining its Contract Compliance Scorecard, which charts a hospital’s contract compliance and determines an overall compliance percentage.
System-wide leadership can use the Scorecard to see who is compliant and noncompliant, and each CEO can see how his or her hospital is doing compared to another.
“The Scorecard has definitely elevated the importance of contract compliance,” Weaver says. “It wasn’t our intent for it to be considered punitive, but the Scorecard certainly fuels everyone’s competitive nature.”
“We haven’t made any staffing reductions,” Weaver continues. “We’ve just tried to improve the efficiency of existing staff to be more focused on the right activities as opposed to busy activities.”
HSHS also recently implemented a clinical resource management program, which is allowing the system to “drive a little deeper into our spend,” Weaver says. He works with the director for clinical resource management and a data and analytics expert to apply product formularies and eliminate product variability where it makes sense.
“It’s part of our renewed commitment to fiscal stewardship,” Weaver says.Share Email