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In the latest broadcast in the OpenMarkets Broadcast Series, Sean Poellnitz, Director of Contracting & Resource Utilization at CHRISTUS Health, outlined reasons he manages his capital program from a position of transparency, and shared benefits that accrue to both CHRISTUS and their supplier partners as a result of his pioneering approach. A recording of the broadcast, titled “Why CHRISTUS Preaches Transparence in their Capital Program,” is now available for viewing here.
Poellnitz manages a $1.8B supply chain, including all contracting related to Radiology, Laboratory, Cath Lab, and Clinical Equipment service lines. His responsibilities involve contracting strategy, GPO utilization and value analysis management, and working with senior executives to drive change and compliance across the CHRISTUS organization. He was joined for the discussion by OpenMarkets Senior Vice President Tom Derrick, who moderated the session with a series of questions for Poellnitz, offered additional insights throughout, and added key points about how automation complements transparency to further streamline the process.
The session began with a review of factors that contribute to inefficiency in the $30 billion capital equipment market. According to Derrick, Sales, General & Administrative (SG&A) costs in the healthcare equipment market are 51%, compared to just 7.5% in auto industry. “The reality is, there are pain points for both providers and suppliers that drive SG&A up,” he said. “No one is at fault, but it’s an endemic marketplace problem. With their approach to transparency, CHRISTUS is addressing the problem and actually improving it.”
Poellnitz described a focus on supplier relationships, that goes as far as publishing the CHRISTUS capital process and budget for suppliers to review. A hallmark of the capital program at CHRISTUS is an annual Capital Town Hall Meeting, followed by quarterly updates for suppliers.
The Town Hall meetings take a deep dive into the current state of the capital program, new policies that influence capital, and opportunities to enhance planning. As part of the Town Hall, Poellnitz shares “State of the Union” details as well as key information about CHRISTUS processes. Key capital spend data is shared with suppliers, along with rules of engagement that standardize the information CHRISTUS requires from suppliers to make decisions.
Since implementing the Town Hall process, Poellnitz has noted significant progress towards alleviating key pain points: As a provider, CHRISTUS has cut down on internal inefficiencies, and is maxing out on the insights they need to gain clear understanding of where the capital program is going. They’ve also seen improved tracking and reporting.
Poellnitz says conversations with suppliers suggest reduced pain on their end as well: The Town Hall process has solved a chronic need for greater access to CHRISTUS decision makers, and wiped out the problems associated with an opaque process via open sharing of budgets and process.
According to Derrick, one key takeaway from the CHRISTUS approach is that providers need to continue striving to organize their own processes. “Removing complexity may not require a reorganization,” he said, “it may be accomplished by simply putting systems and software in place to create internal and external transparency and then promoting the approach to all stakeholders in the capital process.”
Poellnitz agreed with that approach. “Using automation and tools to become smarter about capital programs from Day 1 has helped us move faster and create more value,” he said. “What’s key is driving relationships that are characterized by trust, transparency and timely action. That’s what lets us move forward with great speed and care.”
The OpenMarkets Healthcare Supply Chain Broadcast Series is aimed at educating healthcare providers and equipment suppliers on how new processes and intelligence can be utilized to save valuable time, better collaborate with customers, and maximize efficiency. Click here to sign up future broadcasts.