More than Medical Supplies: How Baptist Health Transformed Supply Chain Strategy to Enhance Patient Care

When Baptist Health signed a five-year prime vendor distribution agreement with Medline in 2014, Kentucky’s largest not-for-profit health system expected a significant return on its new breadth of medical products. The self-manufactured product portfolio not only delivered flexibility but rapidly sparked buzzworthy savings — nearly $8.2 million to date and growing.

“Everything we do in supply chain is for the patient,” says Cindy Gueltzow, Baptist Health’s executive director of supply chain services. “When we reduce our expenses and meet our budgetary goals, it’s easier for us to procure capital equipment such as MRI’s and upgraded cardiac cath labs.  Reducing costs by removing unnecessary clinical variation not only helps us meet our budget, it improves our delivery of care.”

Patients, System Win with New Savings Strategy

Baptist Health, headquartered in Louisville, Ky., works with patients across the state, plus parts of southern Indiana, Illinois and Tennessee. The system’s acute care hospitals offer 2,700 licensed beds and more than 300 points of care including outpatient services, urgent care, physician offices, occupational medicine, physical therapy, home care and diagnostics.

“Medline and Baptist Health teams are constantly challenging each other to find new ways to drive behind-the-scenes savings to support clinicians and patients,” says Senior Vice President of Acute Care at Medline Brian Motter. “Baptist Health has an evolving patient base and some demographic differences amongst its facilities. Our goal is to use the nimbleness of Medline to find even more ways to help the system over the next five years.”

Smart Solves for Everyday Obstacles  

Advanced supply chain logistics played a major role in the savings when the system implemented Medline Supply Chain Optimization solutions. Par optimization has been implemented at 90 percent of nursing floor storerooms at Baptist Health Louisville, the system’s largest hospital. This helps ensure clinicians have the right amount of supplies based on actual demand.

Additionally, Medline’s Put-Away-Ready™ Program for low unit of measure cart supply delivery, is being utilized at Baptist Health Lexington, Baptist Health Louisville and Baptist Health Richmond hospitals. The ability to remove touchpoints from the distribution process and streamline delivery times across far-flung facilities has saved Baptist Health millions in spending on non-clinical items, which will be reallocated toward patient care.

“The improvement in inventory management over the past few years has been remarkable,” said Steve Oglesby, Baptist Health’s chief financial officer. “A key benefit is improved customer service to our physicians and other clinicians by ensuring access to the right supplies at the right place, at the right time, at the right price. Accomplishing this requires efficient and effective daily management. The system has also benefited from lower inventory carrying costs as expired, damaged or lost items are reduced, as well as better expense-revenue matching, which improves financial statement reporting and cost accounting data.”

Co-Create for Future-State

In addition to announcing the results to date of the partnership with Medline, Baptist Health also announced the next step of its supply chain transformation will focus on physician preference items traditionally difficult and costly for systems to manage. Baptist Health will implement non-traditional distribution using Medline’s PriorityPath™ Physician Preference Item 3PL service. “We plan to inventory physician preference items at Medline’s warehouse for daily hospital distribution, which is projected to save $500K-$1M annually in shipping and acquisition costs while enabling physicians to select specific tools and products they prefer,” says Gueltzow. “We are excited to see what future, creative supply chain efficiencies Medline can help us realize. Baptist Health is well on its way to achieving a best-in-class supply chain.”

See how Medline and Baptist Health are working together to improve patient care through supply chain solutions at https://youtu.be/JmyizfmcXsg.

Learn how Medline tailors solutions across the entire continuum of care as a strategic partner at https://www.medline.com/pages/supply-chain.

About Medline

Medline is a global manufacturer and distributor serving the healthcare industry with medical supplies and clinical solutions that help customers achieve both clinical and financial success. Headquartered in Northfield, Ill., the company offers 550,000+ medical devices and support services through more than 1,600 direct sales representatives who are dedicated points of contact for customers across the continuum of care. For more information on Medline, go to www.medline.com or http://www.medline.com/social-media to connect with Medline on its social media channels.

About Baptist Health

Founded in 1924 in Louisville, Ky., Baptist Health is a full-spectrum health system dedicated to improving the health of the communities it serves. The Baptist Health family consists of nine hospitals (eight owned and one managed); employed and independent physicians; more than 300 points of care in 75 Kentucky counties, seven counties in Illinois, six counties in southern Indiana and two counties in Tennessee, including: outpatient facilities, physician practices and services, urgent care and retail-based clinics; outpatient diagnostic and surgery centers; home care; occupational medicine and physical therapy clinics; and fitness centers. Baptist Health’s eight owned hospitals include more than 2,400 licensed beds in Corbin, La Grange, Lexington, Louisville, Madisonville, Paducah, Richmond and New Albany, Ind. Baptist Health manages Hardin Memorial Health, a 300-bed hospital in Elizabethtown, which is expected to become part of the Baptist Health family in December 2018. Baptist Health employs more than 20,000 people in Kentucky and surrounding states. Baptist’s physician network, Baptist Health Medical Group, has about 1,100 employed providers, including about 600 employed physicians, plus more than 2,000 independent physicians.