By putting the patient at the center and centralizing management, Gary Rakes is transforming the supply chain at Aspirus and changing lives.
Gary Rakes discovered the healthcare supply chain because he wanted to serve his country. His father and three of his uncles served in the navy, and when one suggested the Navy Medical Service Corps, Rakes realized it was the perfect opportunity to balance his patriotism with his desire to serve people. Thirty-four years of healthcare experience later, Rakes says he has enjoyed every minute and has never considered doing anything else.
That service mind-set is still clearly at the center of Rakes’ vision for Aspirus, and every supply chain decision is made with patients’ best outcomes in mind. Located in North and Central Wisconsin and Michigan’s Upper Peninsula, Aspirus is a regional healthcare leader that comprises eight hospitals and more than fifty clinics. When Rakes joined the company a year and half ago, his first goal was to centralize the supply chain system and leverage its advantages to drive down costs.
“When I walked in the door, we were operating as a loose confederation of hospital supply chains, each performing as a separate entity with little collaboration and system-wide integration,” Rakes says. “What I tried to do was develop a system-wide supply chain structure and strategy, with system leaders managing specialized supply chain functions for the entire health system.”
Instead of the old model, where every supply chain employee was a jack-of-all-trades, Rakes wanted his team members to focus on their passions and strengths. He appointed three system supply chain leaders to manage specific system-wide areas of focus: strategic sourcing, procurement, and value analysis; inventory management, operations, and logistics; and informatics and business intelligence.
Rakes says that when he’s building that team he’s looking for people who see healthcare as a calling and not just a profession. As a leader, it is his job to nurture that passion. “Take the time to invest in their lives, their education, their training, and genuinely care about them, and they will in turn be extremely high-performing team members who also care about their job and those they serve,” he says.
In addition to the changes made to personnel, Aspirus has also found significant cost savings through its active participation in a regional purchasing aggregation group that comprises sixty-five other like-minded health systems. Using its robust contract portfolio and aggregating its collective spending, the group has been able to drive national best pricing in not only commodity and clinical preference products, but medical devices as well. Rakes says that typical contract savings under this aggregation group were more than 23 percent in 2016.
“Everything else is secondary to providing great patient care to those we serve.”
The effects of these changes, combined with some newly acquired automated pricing tools, are starting to emerge. Aspirus is ranked fifth nationally in overall pricing index within their peer group, moving from an index high of forty-three in January 2016 to thirty-six in October of 2016. They also ended 2016 ranked fifty-seventh nationally among more than seven hundred health systems in regard to key performance metrics related to: price, unit of measure, inventory discrepancies, number of automated purchase order trading partners, and gross transaction volume per licensed bed. For its focus on contract compliancy and system standardization strategies, Aspirus was one of 152 companies recognized with the Supply Chain Executive Savings award and one of 111 to receive the Participation Leader award in 2016 out of 5,300 competing members.
Although he is focusing on cost reduction, Rakes is careful to never lose sight of his top priority: the patients. “Everything else is secondary to providing great patient care to those we serve,” Rakes says. “Our supply chain must serve as an enabler to that vision as we focus on bringing products that not only lower our operating costs and improve our financial margins, but also enhance clinical quality and patient outcomes.” He explains that his role is all about achieving balance. “In the end, supply chain professionals have to be able to balance cost improvement, clinical quality, and patient outcomes and work at the intersection to bring balance to the patients we serve,” Rakes says.
Finding that balance includes looking beyond immediate cost-saving measures to strategies that could reap benefits long-term. “I am a big advocate of the belief that if we improve clinical quality and patient outcomes, it will have a significant impact on reducing our overall costs,” Rakes says. “It might not come in the form of reduced medical product cost, but if we can be a positive contributor to reducing hospital-acquired infections, improving length of stay, or reducing cut-to-close time in surgery, it will have a positive impact on our financials.“
