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How MD Anderson’s Supply Chain is Partnering with Clinicians and Improving the Community's Economic Well-Being

Analysis  |  By Deborah Abrams Kaplan  
   August 31, 2022

Calvin Wright leads the cancer center's supply chain efforts, which also includes ramping up use of technology and data analysis to better support high reliability care.

Resiliency planning is an exercise all health systems should have done before the COVID-19 pandemic, but it is especially important now. MD Anderson Cancer Center, based in Houston, continues to engage in this process, with scenario planning and involvement in a healthcare industry resilience collaborative that works with suppliers on end-to-end supply chain resiliency. That includes understanding where manufacturers' plants are located. The health system can develop backup plans in case of disruptions in places such as China or Puerto Rico, temporarily losing some suppliers.

With the potential for hurricanes in Houston, this type of planning is important. "At any time, one of our suppliers could be knocked offline. We need to put things in place to allow us to continue to provide care," says Calvin Wright, MD Anderson's chief procurement officer, who oversees the entire supply chain.

MD Anderson is unique as a facility treating mostly immunocompromised patients. While all health systems clamored for personal protective equipment (PPE) during the early months of the pandemic, MD Anderson felt the need acutely. They were already contracting for masks with a historically underutilized business in Texas, a company that received a lot of attention during the crisis. At the time, the company was only selling to a few hospitals, Wright says. Though the mask crunch ended, "we've stuck with them because we felt it was the right thing to do. Some other suppliers were cheaper because they were manufacturing offshore." MD Anderson did not invest in the manufacturing company as some other large health systems did, but the cancer center continued showing its support through purchase orders. "I think we will start to invest in suppliers where we think it's appropriate. We do with efforts in pharmacy," he says.

Technology challenges at a large health system

Prior to joining MD Anderson in 2018, Wright worked at a health system with 23 hospitals and 26,000 employees. But these hospitals were small or medium-sized. In comparison, MD Anderson has one hospital with 743 beds and 23,000 employees. Its five outlying clinics are also large. "We're full most of the time," Wright says, and the system's annual gross patient revenue is $10 billion. "You don't find many hospital organizations like that."

During COVID, Wright's team put together dashboards to show inventory of days-on-hand for vital PPE. They also held daily briefings across the organization. Now that the crisis is over, the supply chain department is focusing on its operating model and technology. "People, process, and technology. We have to align all those components if we're going to be effective," he says. They hired a consultant to help them start this modernization process, which includes information systems upgrades.

Wright says they are also looking at different skillsets when hiring staff members, to ensure they are aligned with this operating model. They will hire more analysts trained in data and visualization tools and predictive analytics, which came in handy during the pandemic. "They will have to be more analytical, use more technology," he says, as the executives prefer charts and other visual aids. As more technology is integrated into the operating model, its supply chain will increasingly be technology-driven.

The department will also focus on the process, demand planning, and how supplies are delivered. That includes changing how academic faculty and physicians send demand signals to the supply chain. The data will be used to determine the best time to replenish supplies, when they have enough on hand for surgery, procedures, and patient care. Technology will also help them continue to improve predictability in operations, concerning supplies and services.

"We have to work smarter," he says, as supply unpredictability is difficult to manage. "We're keeping up, but it takes an hour meeting with a multidisciplinary group every time we have a supply issue." They use manual efforts such as phone calls to discuss how many patients are scheduled and match this up with days-on-hand for inventory and expected delivery dates. "We feel we can do that more seamlessly."

The MD Anderson supply chain department is also evaluating the feasibility of building a consolidated service center (CSC). It would be the center of supply chain operations to modernize its supply chain and would include services such as medical/surgical distribution, distribution, regular/specialty pharmacy, some food distribution, and blood donor operations.

Wright would also like to implement a CSC warehouse management system to connect inpatient and research operations to send demand signals to the supply chain. This would use predictive analytics to anticipate supply needs for the upcoming weeks. It would also help with scenario planning, ensuring smooth operations if there is a delay in delivering needed items. "We will build that technology and process into our new operating model and make sure we have the people able to do that."

Partnering with clinical operations

The supply chain team is increasingly partnering with the clinical operations teams to support high reliability care, with an emphasis on providing safe care in all areas. "We partner with our clinical operations team to mitigate as much risk around supplies as possible," Wright says. That includes paying particular attention to expired and recalled supplies. His understanding is that MD Anderson gives more chemotherapy than any other health system in the country. The supply chain team works with the clinical team to eliminate or decrease the number of chemotherapy spills and has developed unique products with manufacturers to help prevent spills.

While the MD Anderson supply chain used to be transactional, they have made it more strategic in its partnership, using metrics to measure success. The organization has a daily readiness briefing that covers staffing issues to supplies to serious safety events, with each major segment of the organization reporting.

Departments such as diagnostic imaging, radiation oncology, pharmacy, procedures, and therapeutics report on a high level if they have what they need, then dive deeper into issues such as contrast media, where there has been a global shortage. They may discuss solutions, such as clinicians developing practice changes to reduce utilization. The department will also share when contrast shipments are arriving and discuss how many patients are scheduled who need contrast. "It helps give the supply chain department breathing room, so if we miss a delivery, we're not in terrible shape." Dashboards also help monitor the situation. "In my 30 years of experience, I have never seen a supply chain as integrated into operations as at MD Anderson," Wright says.

A broader look at DEI

Wright's biggest passion, he says, is using his responsibility and role to improve the economic well-being of the communities MD Anderson serves through diversity, equity and inclusion (DEI). "It goes beyond supplier diversity to economic inclusion, especially for underserved communities," he says. He began doing this in a previous role at Mercy Health in Ohio. When relocating the Mercy Health corporate offices, Wright's CEO challenged him not just to look at suburban neighborhoods, but to consider placing the office in an underserved community. The office with 1,000 employees ultimately moved to an economically depressed area that was 90% African-American, with a median family income below $30,000. Mercy Health spent 25% of the construction dollars with local minority and woman-owned businesses. "We didn't create many new jobs; however, 1,000 people had to find homes to live in and places to eat lunch every day."

He follows the mission of the Healthcare Anchor Network, in building more inclusive and sustainable local economies. "The premise is that healthcare organizations are normally the anchor of a lot of the communities they're in, but they're not optimizing their spend in a way to help the neighborhoods," he says. Directing spend toward local vendors creates opportunities that lead to jobs, health security, and caring for families. Allowing a local vendor to process laundry sounds simple, he says. But the laundry service employs 15 to 20 people who now have a salary, health insurance, and don't show up to the hospital needing their care written off. This can improve the hospital revenue stream as a result.

As a state-owned institution, MD Anderson must report on its goals for historically underutilized business programs to the state comptroller's office. The cancer center will spend $4 billion in construction over the next few years, and it is trying to direct a lot of that money to historically underutilized businesses. It also allocates $1.7 billion in nonlabor spend each year.

"I believe that if you really improve the economic well-being of the community, it improves everything, including the social determinants of health," he said.

Deborah Abrams Kaplan is a contributing writer for HealthLeaders.


Contracting with local vendors provides local jobs with health insurance, which can decrease uncompensated hospital care.

Understanding a manufacturer's location can help with resiliency planning.

Supply chain departments should consider hiring more staff with data analytics and predictive analytics skills.

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