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The purpose of this paper is to share lessons learned and successes in contract management. Five years ago, Contract Management consisted of signing a few Letters of Commitment through our Group Purchasing Organization and trying to keep track of them in a three ring notebook.

The initial purpose for developing a socially responsible, closed loop supply chain was to enhance our environmentally sustainable practices by purchasing more responsible and locally sourced products.

This is an on-going operational excellence initiative and our results have certainly validated our approach and produced an immediate beneficial impact. The methodology we have implemented truly drives improvements and bottom-line results. We are very proud that the Executive Leadership at our organization has promoted the use of Purchasing’s approach in assessing and managing other areas of the organization.

The surgical instrument management software (SIM) implementation began in October of 2003 and a Lean initiative to redesign processes began in October 2005. Implementation of all the initial recommendations was not complete until June of 2006.

A well-conceived strategic sourcing program starts with an analysis of the total spend or operating expenses of the organization utilizing an “ABC” analysis and category/spend segmentation matrix. This analysis allows for the prioritization of the “sourceable” or “manageable” spend as distinct from other expenses such as taxes, depreciation and interest for which different strategies should be effectively applied.

Increasingly, the hospital and health care delivery system executives are viewing the supply chain as a strategic asset that can be leveraged to meet operational, clinical, and financial performance imperatives. This has not always been the case. For years, the supply chain was seen as little more than a necessary but ancillary function – to buy and deliver products as needed – with the primary supply chain improvement strategy focused on buying those products at the lowest price possible.

Overview Ranked among the top 10 Catholic health systems in the United States by size, the CHRISTUS Health system includes more than 40 hospitals and facilities in seven U.S. states and six states in Mexico, with assets of more than $4.6 billion.

Overview With its commitment to delivering better outcomes more efficiently, Cook Medical formed a Supply Chain Improvement Team (SCIT) in late 2013, which is comprised of individuals who are dedicated solely to working with customers around the globe to develop and implement tools to improve purchasing, delivery, and inventory management activities.

Overview

Overview Providence Health & Services is the third largest not-for-profit health system in the United States serving patients across Alaska, California, Montana, Oregon, and Washington. The organization operates 34 hospitals, 475 physician clinics, 22 long-term care facilities, 19 hospice, and home health programs, and 693 supportive housing units in 14 locations. Providence’s health plan serves its caregivers and other large employer groups covering 390,000 members.

Overview

Overview Scottsdale Healthcare is a community-based, not-for-profit health system which includes Scottsdale Healthcare Thompson Peak Hospital, Scottsdale Healthcare Shea Medical Center and Scottsdale Healthcare Osborn Medical Center, the Virginia G. Piper Cancer Center at Scottsdale Healthcare, Scottsdale Healthcare Primary Care centers, Scottsdale Healthcare Research Institute and outpatient services. A leader in medical innovation, talent, and technology, Scottsdale Healthcare was founded in 1962 and is based in Scottsdale, Arizona.

Overview University of Virginia (UVA) Health System, based in Charlottesville, Va., includes a 604-bed hospital, level I trauma center, nationally recognized cancer and heart centers, and primary and specialty clinics throughout Central Virginia.

Overview Vanderbilt University Medical Center (VUMC), based in Nashville, is a comprehensive healthcare facility dedicated to patient care, research, and biomedical education. Its reputation for excellence in each of these areas has made VUMC a major patient referral center for the Mid-South. Each year, people throughout Tennessee and the Southeast choose VUMC for their healthcare needs, not only because of its excellence in medical science, but also because the faculty and staff are dedicated to treating patients with dignity and compassion.

Overview Wellmont Health System is a leading healthcare provider in the Tri-Cities region of Northeast Tennessee and Southwest Virginia. Formed in 1996 with the merger of Holston Valley Medical Center in Kingsport, Tenn., and Bristol Regional Medical Center in Bristol, Tenn., Wellmont is a not-for-profit, integrated health system guided by the mission to deliver superior healthcare with compassion and a vision to deliver the best healthcare anywhere.

The white paper written as a result of the AHRMM Executive Thought Leader Summit held during the AHRMM14 Annual Conference & Exhibition in Orlando, Florida.  

The paper presents healthcare supply chain tools and strategies for navigating the Cost, Quality, and Outcomes (CQO) Movement, and explores new initiatives designed to advance the supply chain from a transactional program to a strategic contributor to organizational success.

CHICAGO (December 19, 2013) – The Association for Healthcare Resource & Materials Management (AHRMM) of the American Hospital Association posted a guidance document today for healthcare supply chain executives looking for a more holistic approach to measuring their organization’s performance. AHRMM launched its Cost, Quality, Outcomes (CQO) Movement in January 2013, to address the major impacts of healthcare reform – including implications for supply chain and recommendations for adapting to a new healthcare delivery model.

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In 2015, AHRMM convened the AHRMM Thought Leader Task Force, an exploratory group tasked with uncovering applications of the Cost, Quality, and Outcomes (CQO) Movement across the healthcare field. The Task Force objectives were developed based on recommendations from the first ever Thought Leader Summit on CQO held at the 2014 AHRMM Conference and Exhibition.