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The Exec: 'Supply Chain Sits at the Intersection of Cost, Quality, and Outcomes'

Analysis  |  By Christopher Cheney  
   April 05, 2023

The primary supply chain function is to ensure availability of supplies, equipment, and services at the best available rates, the top supply chain officer at RWJBarnabas Health says.

The key to success in healthcare supply chain management is balancing effectiveness and efficiency, says Bob Taylor, MBA, senior vice president of supply chain for RWJBarnabas Health.

Taylor has been senior vice president of supply chain at the West Orange, New Jersey-based health system since July 2017. His prior experience includes serving as assistant vice president of supply chain at Birmingham, Alabama-based UAB Health System for nearly a decade.

HealthLeaders recently talked with Taylor about a range of issues, including the challenges of serving as the top supply chain officer at RWJBarnabas Health, balancing competing needs that impact supply chain, conducting value analysis, and involving clinicians in supply chain decision-making. The following transcript of that conversation has been lightly edited for clarity and brevity.

HealthLeaders: What are the primary challenges of serving as the top supply chain officer at RWJBarnabas Health?

Bob Taylor: RWJBarnabas Health, the largest, most comprehensive academic health system in New Jersey, relies on the vitality of our supply chain to deliver safe and effective care every day. This entails monitoring and managing a multifaceted network of resources across our 12 facilities with a service area covering eight counties with five million people. My charge is to maintain the delicate balance of creating efficiency and effectiveness in our supply chain to meet the many, and sometimes competing, needs within our organization. As our health system transitions to value-based care—and amid ongoing difficulties in the global healthcare supply chain—we are challenged to sustain a function that is optimized for exceptional value while continuing to deliver smoothly on patient outcomes.

HL: How do you balance the competing needs within the health system that impact supply chain?

Taylor: Supply chain sits at the intersection of cost, quality, and outcomes. We have a primary function of ensuring availability of supplies, equipment, and services at the best available rates. This must be balanced with ensuring that those items are of high quality and deliver the outcomes that are expected to improve patient care. If we purchase products that are inexpensive but low quality, they may result in poor patient outcomes, which ultimately will translate to cost elsewhere in the healthcare continuum. We are also in a natural tension with our partners as we are looking to reduce cost of care while most supplier partners are looking to increase revenues. This sometimes necessitates looking at new vendor relationships or making broader commitments to fewer vendors to secure value.

Bob Taylor, MBA, senior vice president of supply chain at RWJBarnabas Health. Photo courtesy of RWJBarnabas Health.

HL: How is the supply chain managed at RWJBarnabas Health?

Taylor: Like most hospital systems, our supply chain is complex and interconnected. We take a highly strategic, data-driven approach to managing our procurement process to ensure best practices and to enhance quality and patient outcomes in the most fiscally responsible way possible.

Our core corporate function includes strategic sourcing and contracting, value analysis, capital equipment procurement, procure to pay, and "final mile" management of delivering goods and services to our clinicians and patients. Using data and analytics solutions not only give us the ability to see the bigger picture, but they also enable us to optimize and increase efficiency, while eliminating waste.

Our function is supported by a team of more than 400 people who are committed to delivering exceptional service and value as well as improving the quality of patient care.

HL: How do you conduct value analysis?

Taylor: We have a robust value analysis function across the system comprised of experienced clinicians. The value analysis team collaborates with the many councils, collaboratives, and physician groups to help select the most clinically appropriate products based on clinical evidence and efficacy. Once products are selected the strategic sourcing and contracting team negotiates the contract details for execution.

HL: Tell me about your group purchasing organization.

Taylor: Our system uses a GPO to purchase most of our commodity goods. In some cases, where it makes sense, we contract directly with suppliers.

HealthTrust Purchasing Group is the GPO. Like all GPOs, HPG contracts with suppliers on behalf of the aggregate GPO membership, and as a member we can access the agreements for our use. As our health system is large, we can also frequently further negotiate more favorable pricing with GPO suppliers.

Now that the crisis phase of the pandemic has passed, what are the primary supply chain challenges at RWJBarnabas Health?

While the pandemic's crisis phase is somewhat over, we are still experiencing enormous disruptions that are putting the supply chain function under risk. As the global shortage on healthcare supplies continues, vendors are working to build resiliency, which can lower risk but result in higher costs.

Our team takes a proactive approach to integrate strategies and best-in-class practices to optimize scarce resources, alleviate shortages, and expand capacity quickly. The ability to increase efficiency and manage costs while making sure our dedicated and skilled medical practitioners have the resources to do their jobs is key for us.

HL: How do you involve clinicians in supply chain decision-making?

Taylor: Our supply chain is highly integrated and involves RWJBarnabas Health clinicians throughout the process. We collaborate with our clinical leaders on an ongoing basis and have created formalized cross-functional and specialty-focused teams across our initiatives. For example, our doctors, nurses, and other clinical team members actively participate in product selection, compliance management, managing use of supplies, and more. Their ability to help us understand the exact resources they need to practice medicine adds tremendous value and efficiency.

HL: What are the primary keys to success in supply chain management?

Taylor: Right now, it is crucial for us to have flexibility and the ability to pivot as things change. This also makes it more important than ever to engage and collaborate with our internal partners across the system.

I think of the supply chain in terms of having two main branches: One is effectiveness, which means doing the right thing. The other is efficiency, which means doing things right. It is crucial to strike a balance between the two.

If we are only efficient, we could end up doing all the wrong things just very efficiently, which does not add value. If we are only effective, we may do all the right things but do them so poorly that we again do not add value. Both efficiency and effectiveness are required and in balance to do the right things the right way.

Related: The Exec: In Supply Chain, Collaboration With Clinicians Is Crucial

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

There is a natural tension between health systems seeking to reduce cost of care and vendors seeking to maximize revenue, which can lead to looking at new vendor relationships or making broader commitments to fewer vendors to secure value.

The RWJBarnabas Health value analysis team collaborates with councils, collaboratives, and physician groups to help select the most clinically appropriate products based on clinical evidence and efficacy. 

While the crisis phase of the coronavirus pandemic has largely passed, RWJBarnabas Health is still experiencing enormous disruptions that are putting the supply chain function under risk.


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