The hospital system received the 2022 Innovation Award from HealthTrust
The Vice President of Corporate Purchasing at Hackensack Meridian Health, Richard Killeen, looks at the potential for artificial intelligence (AI) to drive efficiencies in healthcare as similar to something out of Field of Dreams. “If you can dream it, you can do it,” he says. “If you want to use AI to fully automate some tasks, it can happen. AI is a great tool to get these things done.”
Putting technology into practice
The New Jersey-based health system received HealthTrust’s 2022 Innovation Award for its innovative use of AI-enabled automation tools to drive its supply chain performance, according to Sueanne Kyle, the HealthTrust Account Director who works with Hackensack Meridian Health. “Hackensack received this award for its use of some really cutting-edge technology and the creative thinking needed to effectively deploy it,” she says.
In the last year, Hackensack Meridian Health’s Corporate Purchasing department doubled down on the IDN’s mandate to use AI software to free up team members from manual tasks, says Killeen. “We weren’t taking work away from people,” he explains. “We were bringing these people the ability to transition to more meaningful work for the company.” With the executive support of Senior Vice President Karl Blomback, the opportunity was wide open.
The AI software automated manual clerical-type tasks that were time-consuming, so people could focus on more important tasks that require judgment, such as sourcing critical products for the supply chain, Killeen says.
Processes made simpler
Some of the AI-automated processes Hackensack Meridian Health recently implemented include:
Customer Accepted Pricing (CAP) Report Program
CardinalHealth is one of the suppliers Hackensack Meridian Health relies on. The supplier sends the IDN a CAP Report that lists customer accepted pricing. Sometimes there are discrepancies, and verifying the right pricing requires a lot of time and effort—and could hold up the ability to order important supplies, Killeen explains.
Hackensack Meridian Health deployed AI automation software to verify pricing by checking the item master price list and the HealthTrust contract pricing against Cardinal Health’s pricing on the CAP Report. Based on set rules in the AI, it will approve where pricing is correct, update any purchase orders (POs) identified for the item(s) as well as the item master. When there are price discrepancies, the AI software will not approve the price and update the report accordingly so the Pricing team can review and resolve.
The AI-enabled software does this pricing check every week and improves team members’ productivity and order accuracy. It saves approximately 416 hours a year, Killeen adds.
Vendor Qualification Process
Qualifying vendors to work with the IDN was a fully manual process that was labor-intensive and required a lot of physical space to store all the paper files, says Killeen. The electronic process has resulted in a huge time savings due to the elimination of staff time for chasing down emails, phone calls and signatures. An electronic approval workflow has been developed for IT, Human Resources and Corporate Compliance. Also, since the process is completely paperless, no physical space is needed for the files, there is less waste and there are fewer opportunities for documents to be misplaced, Killeen says.
Hackensack Meridian Health’s AI-automated process completes an initial review of new vendor applications and searches for any deficiencies within the submitted application. Automatic alerts are sent to the Purchasing Customer Service team. Once the application is completed and approved, an alert is sent to the Customer Service team member who submitted the application, and after final approval, the AI software downloads certifications, contracts and the application into Hackensack Meridian Health’s user interface.
Even with the automation of the vendor application process, people are involved throughout and have to make the final decision on whether to accept or reject a supplier. “The process needs to be irreproachable,” says Killeen.
Open Order Report
Searching for open orders is a tedious, time-consuming task, notes Killeen, and it’s one that can often fall by the wayside under the crunch to get other, more immediate tasks done. The new AI process runs an Open Order Report on a daily basis, sending emails to each supplier on the report, providing the supplier with the open PO number(s) and other pertinent information. It also requests a proof of delivery for items that have shipped or an estimated delivery date for items not yet received.
The AI-automated process has resulted in high supplier response rates, which make it easier for the Corporate Purchasing team to track and update outstanding orders or cancel the ones not shipped.
The process saves the Purchasing team 325 hours annually, which allows them to focus on other projects. But that’s not the only benefit. “Staying on top of open orders is a task that doesn’t get done as often as it should,” Killeen says. “However, by automating it, AI does it over and over, seven days a week. It frees up our people to focus on more meaningful work that requires their judgment.”
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