Story by Mercy's Kathie Woehrmann
ST. LOUIS – Before anything can change, someone has to take a stand. More than 10 years ago, Lynn Britton, president and CEO of Mercy, took an unprecedented move to transform the way health care managed its supply chain – and today ROi, Mercy’s supply chain organization, is one of the world’s Top 10 health care supply chains.
It’s also the reason why Britton is one of nine national honorees inducted today into the Bellwether League’s Hall of Fame, essentially the Oscars of health care supply chain, for his innovative role in developing Mercy’s supply chain. Former Bellwether honorees include the former CEO of Owens & Minor, a Fortune 500 health care distribution company.
“In the truest sense of the word, Lynn is a pioneer – ‘one who ventures into unknown or unclaimed territory to settle,’” said Vance Moore, Mercy’s senior vice president of operations. “Supply chain was Lynn’s brainchild, and today it is an enormous differentiator for Mercy because it allows us to sustain a health care ministry in very difficult times. Historically, hospitals have outsourced supply chain, but Lynn saw it as a part of our core strategy to keep our ministry afloat. In essence, we have done what Walmart has done, cutting out the middleman so we can better serve our communities.”
By no longer outsourcing to external commercial companies for contracts, transportation and distribution of products, Mercy realizes anywhere from 15 to 30 percent savings each year.
“We are under incredible pressure to find ways to continue to provide better health care with fewer resources,” said John Finan, Jr. president and CEO of Franciscan Missionaries of Our Lady Health System (FMOLHS) in Baton Rouge, Louisiana’s largest nonprofit health care system. “Because of Mercy’s innovative thinking with supply chain, we partnered with ROi in 2011 to replicate Mercy’s supply chain model. We are already reaping the benefits.”
Bruce Holstien, president and CEO of Spartanburg Regional Healthcare System in South Carolina, and a partner of ROi, added, “Like many others, we face significant challenges in today’s health care environment. A strategic approach to supply chain management is critical to our system’s future success.”
Prior to establishing ROi, Mercy utilized a traditional supply chain model, which was fragmented, inefficient and fraught with duplication. Like many health care organizations, each of Mercy's hospitals operated their supply chains independently of each other. Third parties handled most of the contracting and all of the distribution activities, and sales representatives had better relationships with decision-makers than supply chain leaders.
Working side by side with administrators and the clinical team, ROi developed a new innovative business model that has allowed Mercy to take greater accountability. Results include:
- Development of the nation’s 7th largest non-government health care Group Purchasing Organization, internally managing more than $1 billion in contracts
- Self-distribution model that includes a 100,000-square-foot Consolidated Services Center in Springfield, Mo., where more than 5,000 codes of medical supplies and pharmaceuticals are managed and distributed to Mercy's network of hospitals and clinics across four states
- Largest regional health care system transportation fleet in the U.S., managing more than 70 vehicles servicing 1,200 delivery locations
- First provider-owned, FDA-regulated Custom Procedure Tray manufacturing facility in the U.S, producing nearly 300,000 surgical packs used by physicians annually
- First provider-owned private label brand in the U.S.
- Innovation that is changing the way spine implants are marketed, distributed and serviced in health care
In addition, because of Britton’s leadership, Mercy’s medication administration process – Mercy Meds – has become one of the most significant patient safety initiatives in the industry. Mercy Meds was born out of ROi’s approach to link supply chain processes to improved patient safety.
“Not only is Mercy benefitting but, today, ROi is partnering with health care systems across the country to lower costs and re-engineer the supply chain while providing the highest levels of patient care and safety,” said Gene Kirtser, president and CEO of ROi. “This is the right thing to do for health care across the nation.”
Mercy is the sixth largest Catholic health care system in the U.S. and serves more than 3 million people annually. Mercy includes 32 hospitals, 300 outpatient facilities, 39,000 co-workers and more than 2,000 integrated physicians in Arkansas, Kansas, Missouri and Oklahoma. Mercy also has outreach ministries in Louisiana, Mississippi and Texas. For more about Mercy, visit www.mercy.net.