Partners Healthcare (Partners) is a non-profit, integrated health system in New England founded by two famous flagship tertiary academic medical centers, Massachusetts General Hospital and Brigham and Women\u2019s Hospital and consisting also of community and specialty hospitals, a managed care organization, community health centers, a physician network, home health and long-term care services. It is internationally renown as a leader in biomedical research and clinical care and has in recent years aggressively undergone mergers and acquisitions in line with a trend characterizing the entire US healthcare industry [1]. Digitalization has already disrupted almost all facets of healthcare operations and that electronic medical record uptake has jumped from 10% to 90% of all US hospitals in the last 10 years in response to both patient and provider demand and healthcare policy incentives created exemplifies the nature in which digitalization will disrupt healthcare in the years to come. Aside from changing the nature of the doctor’s visit to encompass a doctor-patient-EMR and patient portal triad, digitalization in healthcare has sparked an increasing focus on collecting and harnessing big data to improve all aspects of patient care. Radical changes in health care policy such as the 2010 Affordable Care Act that incentivize clinical services payment reform and the 2009 HITECH Act which promotes the adoption and meaningful use of health information technology coupled with increasing healthcare costs and decreasing reimbursement rates from public and private health insurance payors have shaped Partners\u2019 response to the trend of digitalization of healthcare, an industry where the bulk of spending is driven largely by physicians who are famously resistant to change and the adoption of technology. Partners bore an enormous financial cost of $1.2 billion in 2015 to implement the Epic electronic medical record across its vast network [2] and faced significant challenges in reduced labor productivity and employee morale from which it has not yet fully recovered [3].<\/p>\n
Notably, Partners recently announced a record $108 million net operating loss at the end of 2016 [4]. In May 2017, Partners announced \u201cPartners 2.0,\u201d a $600 million operating cost-cutting initiative \u2013 the largest in its history \u2013 to streamline revenue collection, supply chain, care delivery and research [5]. In the second quarter of 2017, Partners announced that \u201csupplies and other expenses increased $67 million (11%) to $678 million, reflecting the new Medicaid assessment ($23 million) and increased costs for pharmaceuticals ($17 million, 14%) [6]. Partners Supply Chain Management is a centrally managed contracting, procurement, and disbursement unit that has sole control over contracting and pricing for all member entities of its network [7] and in 2015 was recognized as a leader in standardization of its supply chain management [8]. Partners also continues its 2004 Supplies Diversity Program [9] which extends Partners\u2019 mission of community outreach \u201cto involve an increasingly more diverse group of suppliers to participate in the procurement operation\u201d and currently consists of 3000 certified vendors categorized Historically Underserved Businesses.<\/p>\n
In the short-term, Partners should continue its efforts in standardization, for example of their surgical implants and medical instruments, a selection process that to now has been left to the individual preferences and selection of the individual surgeon in the OR [10]. Partners should also consider adopting RFID technology, relatively unused in the healthcare industry, to its inventory management system [11]. In the medium term, Partners should invest in linking its Epic electronic medical record into which real-time clinical activity is entered by front-line healthcare providers \u2013 for example, by scrub nurses and surgeons in the operating room \u2013 with procurement activities to minimize supply shortages that cost frontline providers 17% of their workweek [11]. With integration into their electronic medical record, Partners could continue to invest in developing capacity for predictive supply chain management to anticipate equipment and supply needs based on trends such as primary diagnoses seen in its emergency rooms over the last 6 months and seasonal diagnosis patterns.<\/p>\n
Two important questions regarding the role that digitalization will play in Partners\u2019 strategy are (1) what role will the artificial intelligence so sought after for improved diagnosis (i.e. IBM Watson) play in influencing other healthcare operations such as supply chain management and (2) in what new capacities will Partners need to train its frontline healthcare providers such as physicians, nurses, and technicians to optimize adoption of digitalization in supply chain management?<\/p>\n
[1] \u201cHospital Merger Mania Continues Throughout Country.\u201d Fierce Healthcare. <\/em>https:\/\/www.fiercehealthcare.com\/finance\/hospital-merger-mania-continues-throughout-country<\/a><\/p>\n [2] \u201cPartners Launches Billion Dollar Electronic Health Records System.\u201d The Boston Globe.<\/em> https:\/\/www.bostonglobe.com\/business\/2015\/05\/31\/partners-launches-billion-electronic-health-records-system\/oo4nJJW2rQyfWUWQlvydkK\/story.html<\/a><\/p>\n [3] \u201cOne Year Later, 8 Updates on Partners\u2019 Healthcare\u2019s Epic Go Live.\u201d The Boston Globe.<\/em> \u00a0https:\/\/www.beckershospitalreview.com\/healthcare-information-technology\/1-year-later-8-updates-on-partners-healthcare-s-epic-go-live.html<\/p>\n [4] \u201cPartners Healthcare Posts Record Operating Loss.\u201d The Boston Globe.<\/em> https:\/\/www.bostonglobe.com\/business\/2016\/12\/09\/partners-healthcare-posts-record-operating-loss\/aFEQ2Ff93HN0lEpeawgucI\/story.html<\/a><\/p>\n [5] \u201cPartners Healthcare Cuts Millions To Become More Efficient.\u201d The Boston Globe. <\/em>\u00a0https:\/\/www.bostonglobe.com\/business\/2017\/05\/12\/partners-healthcare-cut-million-become-more-efficient\/7ECOLpQpkJX80mUfFZDuoL\/story.html<\/a><\/p>\n [6] \u201cQ2 2017 Financial Results.\u201d Partners Healthcare. <\/em>\u00a0http:\/\/www.partners.org\/Newsroom\/Press-Releases\/Q2-2017-Financial-Results.aspx<\/a><\/p>\n [7] \u201cPartners Healthcare Supply Chain Management \u2013 Supplier Guide.\u201d Partners Healthcare.<\/em> http:\/\/www.partners.org\/Assets\/Documents\/About-Us\/Supplier-Guide.pdf<\/a><\/p>\n [8] \u201cNovation Recognizes 255 Hospitals and Health Systems for Achievements in Supply Chain Management.\u201d Vizient Inc. <\/em>\u00a0http:\/\/newsroom.vizientinc.com\/press-release\/novation\/novation-recognizes-255-hospitals-and-health-systems-achievements-supply-chai<\/a><\/p>\n [9] \u201cPartners Healthcare Supply Chain Management \u2013 Supplier Guide.\u201d Partners Healthcare.<\/em> http:\/\/www.partners.org\/Assets\/Documents\/About-Us\/Supplier-Guide.pdf<\/a><\/p>\n