Keith Fricker is assistant director of pharmacy for Jackson Health System in Miami. Having experience in both pharmacy and supply chain, Mr. Fricker shared his insight on the top challenges in the field, disruptions to look for and more.
Note: Responses have been edited for style and clarity.
Question: What tips would you give to ASC leaders who are developing a long-term supply chain plan?
Keith Fricker: I come at this question through the pharmacy lens because my career has moved from pharmacy to supply chain, and back to pharmacy. But even for non-pharmacy products, data and communication are foundational to long-term supply planning.
First, ASC leaders should ensure they have a strong value analysis group. Whether it’s an internal team or an external resource, they should benchmark prices and outcomes for each product. It really helps to visualize the data and show whether you’re paying the best price and/or getting the best outcomes from your supplies. I love benchmarking on so many levels. But be sure you obtain benchmarks from neutral third parties outside the product channel. It’s the old adage, “Trust but verify!”
In addition to monitoring cost and outcomes benchmarks, ASC leaders need to make sure their end users are happy with the products purchased. Open the lines of communication, formally and informally, to get a ground-level understanding of how products are impacting patient care and efficiency. Look all around and ask questions during rounding. Even an inexpensive product may be a resource drain if it’s never used, or if it hurts patient or provider satisfaction rates.
Finally, have a way to document the rationale behind the product decisions you make. Leave a crumb trail you can use to evolve the supply chain plan going forward. It doesn’t need to be elaborate. At the smaller-product level, you can write your notes directly into benchmark spreadsheets. You might jot down that a more expensive outlier resulted in better clinical outcomes. Or conversely, that your nurses avoid one type of central line kit because it doesn’t include scissors. Regardless, these notes let ASC leaders look back at the data, remember their rationales, and use them to continually evolve their plan.
Q: How can ASCs best select supply chain partners?
KF: The best long-term supply chain partners, in my experience, tend to demonstrate a commitment to at least these three basic considerations:
- An equitable relationship. ASC leaders should test the market and look for deals that are fair. Beware of any that seem too good to be true — as when companies undercut the market just to get your ASC’s name on their client list. Always spin the table around and look at the benefits from both sides, because a partnership that’s not equitable is a recipe for failure. Thankfulness of you as a customer can be pretty short-lived at times. Plus, every long-term business relationship goes through an “all guns on the table” conversation at some point. When that happens, you have no leverage if you’re already acquiring products at below-market cost.
- A responsive business and ownership model. Be sure to ask early and often how your partner companies are making their money. Understand their business and ownership models. Are they a privately held company with a long commitment to industry innovation? B. Braun Medical is an example of that model. Or are they venture-backed with the goal of being swallowed by a larger organization eventually? There are lots of valid business models. What ASC leaders must understand is whether their partners’ models will fit their ASC’s short- and long-term needs.
- Right scale and size. It’s hard to truly partner with a company that’s so big that your messages are dumped into a group email with no ownership. So consider looking for supply chain partners who are large enough to have leverage but small enough to have direct conversations. From an IV fluids perspective, the direct relationship we have with B. Braun is a good example again. Seldom do we have the same depth of communication that we have with B. Braun.
Q: What supply chain headwinds or challenges do you expect to face in the coming year?
KF: I believe the regulatory environment will continue to transform supply chain dynamics, as it has for the past several years. Likewise, I expect ongoing consolidation in the manufacturing industry to continue creating challenges.
For example: For years after the 2012 New England Compounding Center fungal meningitis outbreak disaster, I stayed well away from compounders. And I wasn’t alone — regulators essentially shut down the industry for a while. Now, though, the regulations that created 503B compounding pharmacies and improved regulatory oversight have brought compounding back to life bigger and stronger. After staying far away, I’m warming up to compounding again, but the relationship is very different. It’s something that will need to be navigated closely.
Manufacturing consolidation also will make it important to develop multiple partnerships with different relationships than in the past. ASCs will need to have a high level of confidence that their manufacturing partners have their fingers not only on the regulatory pulse but also on how their products move domestically and internationally.
Q: Do you see tech companies like Amazon playing a role in ASC supply chain? Why or why not?
KF: I do think it will happen eventually, but not swiftly.
I’m one who loves to ask questions outside of convention, and companies like Amazon are certainly disrupting business as usual. Yet we still have to ask, “What’s the right tool for the job?”
The ASC supply chain has a lot of intricate moving pieces. It must be well-oiled and highly reliable. While the Amazons of the world can scale easily and know the cost of logistics better than most, I think back to a time when my organization switched from one med surg supplier to a larger one. We didn’t move everything to the larger company. Why? Because for certain products, we felt it was essential to have a direct line with a reliable group. We kept sourcing those products from the smaller company.
I also believe that the healthcare regulatory and payer perspectives may be tough sides of the venture for companies like Amazon to crack. I’m not sure they’re ready for those kinds of complexities because they’re unlike any in the consumer market. Still, if Amazon and others start to partner with payers, plan sponsors and verticals within healthcare delivery itself, I think they have the potential to one day disrupt the ASC supply chain, too.