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The Role of Healthcare Supply Chain During Construction: A Case Study with Beloit Health System
Beloit, Wisconsin has a strong history of heavy industrial manufacturing. The city celebrates its world-class riverfront, a revitalized downtown, internationally renowned Beloit College, historic residential neighborhoods, and one of the best farmer’s markets in the state.
It’s also home base for Beloit Health System, a multi-location healthcare organization serving a culturally diverse community of more than 150,000 residents on the state line of Wisconsin and Illinois.
The system has a long history in the community, starting in 1928 with the Beloit Municipal Hospital that was in operation for over 40 years. When a new hospital was needed in the early 60s, the city voted to lease the hospital to Beloit Hospital, a private, nonprofit corporation. Ground was broken for Beloit Memorial Hospital in October of 1967 and opened the doors in 1970.
In 2010, Beloit Hospital partnered with Beloit Clinic SC and became Beloit Health System, a new integrated health system employing close to 1,600 people including physicians.
“We are very proud of our history, facilities, and services we provide, but it’s our staff and the patients we serve that make working in healthcare so meaningful,” said Peggy Kolb, CMRP, Director of Materials Management at Beloit Health System. “The physicians, staff, and volunteers have been the real reason people continue to place their most precious gift, their health, in our hands.”
Kolb started as a Medical Records Manager with Beloit in 1989, and today has 25 years of combined leadership and operations experience in healthcare. Her responsibilities are wide ranging, and with the recent construction projects, a main focus has been coordination efforts involving the budgeting, planning, and securement of furniture, fixtures, and equipment needed to operationalize new construction.
The FF&E of Hospital ConstructionWith two major construction projects running concurrently—The Hendricks Family Heart Hospital and Packard Family Cardiology Clinic, and the NorthPointe Surgery Center—Kolb and her team had their work cut out for them.
“The heart hospital and surgery center are two very dynamic and exciting initiatives, but very different from one another in their complexity and scope. The 30,000-square-foot surgery center, all new construction and equipment, was an addition onto our existing NorthPointe Health and Wellness facility in Illinois.
“The heart hospital is a ‘hospital within the hospital’ concept; with the entire fourth floor being gutted, renovated, and equipped to support all aspects of cardiovascular services. The materials management department needed to be engaged from the start of the planning processes to the very end,” said Kolb.
There were many conversations and discovery sessions to identify what equipment was needed to support the projects. The materials management team had to become knowledgeable about every piece of capital equipment in detail, learning how they functioned, what would be needed for support, what power, space, and technical considerations needed to be considered, and determine how to successfully navigate back and forth between the two projects to stay on time, on course, and on budget.
The team also needed to determine what could be reused and what needed to be purchased new; determine budget impact on operationally expensed versus capital expensed items; and look for commonalities of equipment, in relation to “need by” dates between the two projects.
Baseline and final negotiated quotes were obtained; technical specifications and quantities verified, and guidelines checked to make regulatory guidelines would be met.
The heart hospital project was broken down into three construction phases: remodeling of the Cardiology Clinic and Vascular Services areas; addition of a state-of-the-art hybrid OR; and renovation of an existing wing for eight additional critical care (CCU) patient rooms.
Before that could start, existing personnel and services that currently lived on fourth floor who were not part of the project had to be relocated elsewhere within the system.
“Since some of my previous background included space planning and utilization, I could facilitate and coordinate many of those roadmap moves in conjunction with our Facilities Director, which made driving GPO (group purchasing organization) contract utilization and procurement easier,” she said.
“It also allowed me to stay ahead of construction to make sure purchase decisions and equipment delivery schedules would be aligned with rough-in and installation needs on the construction side.”
Managing DelaysWhile initially this process was done for each project at separate intervals, project delays due to the Condition of Need (CON) process in Illinois pushed the NorthPointe Surgery Center start date out.
“The impact of that was we now had two very large construction projects, in two different states, running concurrently with each other in every phase of the build, including design/development, ground breaking, ordering and completion schedules, occupancy, and go-live implementations,” she said.
And since the delays spanned several months, Beloit had to go through the discovery process again for each piece of capital on each list. Equipment had now become obsolete by the manufacturers, inflation was affecting initial baseline budget, project scope had changed, and the same resource people were trying to manage both builds at the same time.
For Kolb, that meant meeting with the appropriate directors and end-users, re-evaluating 151 unique pieces of capital for the Surgery Center and 209 unique pieces of capital for the Heart Hospital; arranging equipment trials; working with the Construction Coordinator to determine changes in the technical specifications; and bundling like equipment between the two projects and in conjunction with the team’s regular routine capital needs for greater negotiating power.
Currently, the Heart Hospital is in the third and final stage of the redesign and will start seeing patients in the hybrid OR in May, 2017. The NorthPointe Surgery Center build and fit out is complete but waiting for final regulatory inspections.
“Now that the major outfitting of FF&E is complete for both projects, my focus shifts from equipment selection and procurement to operationalizing the departments in regards to inventory management and distribution for patient care needs,” shared Kolb.
Staying Ahead of the CurveOne of the biggest challenges for supply chain related to construction, Kolb said, is having enough resources to dedicate to the project on a full-time basis. There are many details when purchasing capital equipment and keeping all the elements moving within budget, timeframe, and sequence, can be difficult when focus is interrupted by other job responsibilities and competing priorities.
Working the two different projects at the same time, with different but similar purchase requirements could be confusing, but it’s important to stay organized, communicate daily with the construction leads, and track progress of the items as you go, she shared.
Additionally, keeping up with changes in scope and re-evaluating the equipment that might be affected by the changes can be very time-consuming and costly to a facility if the details are not re-analyzed and communicated to the project leads in a timely manner.
“Luckily, my materials staff is very willing to learn and pick up additional tasks. We share knowledge and collectively set priorities based on information known at that time. We made sure we were aligned as to what needed to be done next and had daily updates and progress reports, and of course threw some fun in the mix.”
With as much experience as Kolb has in the field, we’d be remiss if we didn’t find out some of her tips for running an increasingly complex supply chain for a hospital:
She said it’s important to continually invest in building the skill level of the materials staff. As well as leadership, the staff needs to stay abreast of the political, environmental, and regulatory environments, and have the opportunity to use that knowledge, provide input, and network with peers from other healthcare facilities.
Many times staff are asked to do tasks way outside of their normal roles; while the answer is important, knowing how to find the answer and what barriers might affect it, is where the real value lies.
Make sure when budgeting or when getting ready to order that clinical leadership, providers, and end users of the equipment have been included in the discovery process. As you evaluate the item for pricing and service agreements, it’s imperative to look full scope at safety regulations, what departments or services the equipment might touch, where it might travel, and how it all be used.
“We are a community health system dedicated to our corporate values of Engagement, Quality, Satisfaction, and Integrity. We are progressive in vision, providing an array of diverse medical procedures in state-of-the-art facilities, like the Hendricks Family Heart Hospital and Packard Family Cardiology Clinic; the NorthPointe Surgery Center; and our UW/BHS Cancer Care Center,” she said.
“The commitment to our community for providing quality healthcare to our patients continues, and is demonstrated by these types of construction initiatives. Bringing quality healthcare and keeping it local in our community, as well as the safety and well-being or our patients and employees, will always be my first priority.
“I am very proud of the work the Materials Management Department contributes and feel privileged to have the opportunity to help build and strengthen our foundation that was set so many years ago.”
Beloit Health System is an integrated healthcare organization providing a continuum of care for the residents of southern Wisconsin and northern Illinois.
Beloit Health System HQ
1969 West Hart Road,
Beloit WI 53511