1. Donada J. Reimer, BSN, RN Manager, Clinical Support Services Mayo Clinic Supply Chain Management Donada J. Reimer, BSN, RN Manager, Clinical Support Services Mayo Clinic Supply Chain Management Repositioning Clinical Expertise to Deliver Supply Chain Excellence

2. General Premises & Challenges Health Care Costs Health Care Costs New Techniques & Technologies New Techniques & Technologies Inventory Expense Management Inventory Expense Management Health Care Costs Health Care Costs New Techniques & Technologies New Techniques & Technologies Inventory Expense Management Inventory Expense Management

3. Where’s the Money? Where’s the Money?

4. Historical Model: Decentralized Supply Chain support and expertise Surgical Services Supply Chain Management Understood clinical requirements Understood clinical requirements Relationships with Physicians Relationships with Physicians Relationships with industry and suppliers Relationships with industry and suppliers Requisition to Receiving process Requisition to Receiving process Pricing & Contracting Pricing & Contracting Point of use technology & automation Point of use technology & automation

5. Our Approach: People, Processes & Technology

6. Our Approach: People Repositioned Clinicians from Procedural Areas to Supply Chain Management Repositioned Clinicians from Procedural Areas to Supply Chain Management Created a partnership between SCM and the Procedural Areas Created a partnership between SCM and the Procedural Areas Surgical Services Surgical Services Radiology Radiology GI/Endo GI/Endo Repositioned Clinicians from Procedural Areas to Supply Chain Management Repositioned Clinicians from Procedural Areas to Supply Chain Management Created a partnership between SCM and the Procedural Areas Created a partnership between SCM and the Procedural Areas Surgical Services Surgical Services Radiology Radiology GI/Endo GI/Endo

7. LOGISTIC SPECIALISTSLOGISTIC SPECIALISTS Leverage batch reports for inventory managementLeverage batch reports for inventory management Conduct daily reconciliation of inventoryConduct daily reconciliation of inventory Create barcodes for productsCreate barcodes for products Perform all restocking activitiesPerform all restocking activities Place orders for non-stock items in the ERP systemPlace orders for non-stock items in the ERP system Manage equipment repairs and returnsManage equipment repairs and returns Clinical Support Services: PEOPLE

8. Clinical Support Services: Coordinators Coordinators Coordinators Recruited the Necessary Talent Recruited the Necessary Talent Patient Billing Patient Billing Systems Background Systems Background Strong Analytic Skills Strong Analytic Skills Focused Training & Staff Development Focused Training & Staff Development Required Medical Terminology Classes Required Medical Terminology Classes Surgical Procedure Observation Surgical Procedure Observation Coordinators Coordinators Recruited the Necessary Talent Recruited the Necessary Talent Patient Billing Patient Billing Systems Background Systems Background Strong Analytic Skills Strong Analytic Skills Focused Training & Staff Development Focused Training & Staff Development Required Medical Terminology Classes Required Medical Terminology Classes Surgical Procedure Observation Surgical Procedure Observation

9. Coordinator Responsibilities Patient Billing Patient Billing Audit charges Audit charges Debit and Credit Debit and Credit Medicare Denials Medicare Denials Read Surgical Dictation Read Surgical Dictation Capture lost charges Capture lost charges Correct procedure names Correct procedure names Manage and Maintain Systems and Data Manage and Maintain Systems and Data SIMS SIMS PYXIS PYXIS Patient Billing Patient Billing Audit charges Audit charges Debit and Credit Debit and Credit Medicare Denials Medicare Denials Read Surgical Dictation Read Surgical Dictation Capture lost charges Capture lost charges Correct procedure names Correct procedure names Manage and Maintain Systems and Data Manage and Maintain Systems and Data SIMS SIMS PYXIS PYXIS

10. Responsibilities (Continued) Provide Data Analysis Provide Data Analysis Monitor contract compliance Monitor contract compliance Provide inventory valuation Provide inventory valuation Cost/Case Analysis Cost/Case Analysis Project Management Project Management Lean Six Sigma projects Lean Six Sigma projects Pyxis Implementation for Surgical Services Pyxis Implementation for Surgical Services Provide Data Analysis Provide Data Analysis Monitor contract compliance Monitor contract compliance Provide inventory valuation Provide inventory valuation Cost/Case Analysis Cost/Case Analysis Project Management Project Management Lean Six Sigma projects Lean Six Sigma projects Pyxis Implementation for Surgical Services Pyxis Implementation for Surgical Services

11. PeoplePeople Specialty Trained RN Manager Specialty Trained RN Manager Rationale: Rationale: Clinical Experience Clinical Experience Knowledgeable Knowledgeable Procedures Procedures Supplies/Substitutes Supplies/Substitutes Credibility Credibility Clinician to Clinician vs. SCM to Clinician Clinician to Clinician vs. SCM to Clinician Specialty Trained RN Manager Specialty Trained RN Manager Rationale: Rationale: Clinical Experience Clinical Experience Knowledgeable Knowledgeable Procedures Procedures Supplies/Substitutes Supplies/Substitutes Credibility Credibility Clinician to Clinician vs. SCM to Clinician Clinician to Clinician vs. SCM to Clinician

12. Enterprise Strategy: Process ERP System - Lawson ERP System - Lawson Billing System - HealthQuest Billing System - HealthQuest Inventory System - SIMS Inventory System - SIMS ERP System - Lawson ERP System - Lawson Billing System - HealthQuest Billing System - HealthQuest Inventory System - SIMS Inventory System - SIMS

13. Surgical Supplies Technology Team (SSTT) Surgical Supplies Technology Team (SSTT) Physician LedPhysician Led Managing New Technology Managing New Technology Supports product conversionsSupports product conversions Supports the Value Analysis Process – EnterpriseSupports the Value Analysis Process – Enterprise Management team member for SCM & SSManagement team member for SCM & SS Our Approach: Technology

14. On Line Request Form Inventory Criteria: Item MUST Inventory Criteria: Item MUST Reduce net Episode of Care Cost Reduce net Episode of Care Cost Improve Patient Care by a measure degree Improve Patient Care by a measure degree Improve patient or staff safety Improve patient or staff safety Fill a critical need for which no existing product/equipment is serving Fill a critical need for which no existing product/equipment is serving Inventory Criteria: Item MUST Inventory Criteria: Item MUST Reduce net Episode of Care Cost Reduce net Episode of Care Cost Improve Patient Care by a measure degree Improve Patient Care by a measure degree Improve patient or staff safety Improve patient or staff safety Fill a critical need for which no existing product/equipment is serving Fill a critical need for which no existing product/equipment is serving

16. Reproducible Results

17. Utilization Management Managing to Medicare Waste Reporting Supply Usage Expiration Reporting

18. For 2009 at MCH: For 2009 at MCH: for primary hip replacement, costs for surgical for primary hip replacement, costs for surgical supplies alone consumed 46% of MS-DRG 470. supplies alone consumed 46% of MS-DRG 470. for primary knee replacement, costs for surgical for primary knee replacement, costs for surgical supplies alone consumed 35% of MS-DRG 470 supplies alone consumed 35% of MS-DRG 470 Just to recover the cost of an MS-DRG 470 admission, a 40% reduction in surgical supply cost was needed. Just to recover the cost of an MS-DRG 470 admission, a 40% reduction in surgical supply cost was needed. The Cost Challenge

19. Managing to Medicare

20. Supply Cost as a % of DRG Reimbursement

21. Contract Compliance

22. Eliminating Waste

23. Key Concepts Increased pressures for Surgical Services personnel to do more with less require out of the box problem solving Repositioning and retooling Supply Chain Management can return clinicians to patient care Aligning subject matter expertise within Supply Chain can better position the organization to meet future challenges

24. New Value Proposition Clinically Focused Management for Surgical Services Services Provided: Inventory Management Analytics Clinical Expertise -Product Conversions -Contracting Knowledge -Contracting Strategies -Inventory Control -Case Cost Analysis -Contract Compliance -LEAN Six Sigma - Clinician to Clinician - Direct knowledge of supplies -Surgical expertise -Patient Billing

25. People, Processes, and Technology The combination of the People, the processes and technology help the Enterprise to meet strategic goals The combination of the People, the processes and technology help the Enterprise to meet strategic goals

26. Questions or Comments