John Pritchard, President of ANAE, sat down with supply chain leader Michael Gray in September 2019 for a webinar on his role at SSM Health in the past year and a half. He shared what makes SSM unique, what his top priorities are for SSM, a success story at SSM and his guidance for suppliers.
Visit the ANAE Supply Chain Leader Series Page to hear the recording!
Michael Gray
System Vice President and Chief Supply Chain Officer
SSM Health (St. Louis, MO)
What Makes SSM Health Unique?
- Louis-based SSM Health is a Catholic, non-profit U.S. health system with 11,000 providers and nearly 40,000 employees with care delivery sites in four states, including Wisconsin, Oklahoma, Illinois and Missouri. It operates 23 hospitals, more than 290 physician offices and other outpatient and virtual care services, 10 post-acute facilities, comprehensive home care and hospice services, a pharmacy benefit company, a health insurance company and an accountable care organization (ACO).
- More than 90% of SSM’s revenue was hospital based 10 years ago, while today, that’s down to less than 60% through diversification. Insurance, home health and other physician and ambulatory environments have broadened SSM’s revenue base as the industry transitions to a more fee-for-value, population health environment. Also, there’s only one incidence of SSM’s EHR, according to Gray, as only nine health systems of Epic’s top customers have hospitals across multiple states, five with an academic center and one – SSM Health – with its own system and affiliates. That allows SSM to look across its markets and compare products, processes, training and care.
Top Priorities
- Reduction of unnecessary variations with different suppliers and multiple line items. According to Gray, SSM has $40 million in products purchased this year that were not purchased last year, and a key component is to start limiting that through reduction of, what Gray calls, technology creep. Technology must be understood from both the financial side and the training side.
- Improving data quality with SSM’s master data management team. It’s structured to be more effective working with physicians, who can see the cost of the cases they work and their work versus other physicians’ work like patient length of stay, readmission and other quality metrics. SSM’s supply chain was not responsible in the past for high dollar variables but is more focused managed inventory, making sure the right products are there and are cost effective.
- When Gray arrived at SSM, it had three purchasing organizations. Today, it has one purchasing organization, which reduced the number of contracts managed by 59%, the embedded contract lines by 73%, the vendors extended in the system by 74%. It was a huge lift for SSM.
Success Story
- Spending time with surgeons and specialists across the organization. They didn’t have great interaction with supply chain in the past, and after taking a beating from them in the first 10 minutes, they now say thank you for asking and what can we do to help. That type of culture allows SSM to quickly draw surgeons and physicians together, which leads to a reduction of variability on products, better pricing on specific contracts, and a better understanding of the data side and revenue cycle impacts. Gray manages all preference cards across the organization, and it helps to compare physicians on certain procedures regarding close time, readmissions and length of stays.
Guidance for Suppliers
- Fingerprint it. Gray says best-in-class suppliers focus on a health system’s mix, direct services that reduce variability and a reduction of spend for the health system. Finger-printed strategies reduce the costs negatively impacting revenue while cultivating relationships and reducing the unnecessary variation that hinders quality.
As an SSM Health system leader, Gray is accountable for the strategic integration and operations of the supply and non-labor spend of all entities of SSM Health. He works across the system with all operating units to develop and implement short and long-term strategies that optimize clinical and non-clinical costs for all supplies and services while maintaining high quality, safety and service to those served. He collaborates with physician, hospital, medical group and system leadership in fulfilling these strategic goals.
Prior to joining SSM Health, Gray was President and CEO of Inspired Strategies Group, where he leveraged the experiences of his executive career within health systems, shared services organizations, group purchasing organizations and suppliers.