Cornerstone Healthcare Group was founded in Dallas, Texas in 1990, with a mission to provide the highest quality, patient-focused healthcare and customer service to every patient, family member and physician it serves. Cornerstone is comprised of three business segments including long term acute care, behavioral health, and senior living.
To drive supply chain improvements across the growing organization, the Cornerstone executive team brought Luis Martinez on board as Vice President of Supply Chain. Martinez formulated a broad-ranging initiative that combined technology and services to consolidate and improve supply chain business processes.
THE CORNERSTONE STORY
Consolidation of Systems for an Enterprise Approach
“A few years ago, we had multiple systems and 18 item masters, one for each acute care location,” said Martinez. “We were using a system for purchasing that had a lot of steps and was not at all intuitive for users. It was difficult to train new team members, and creating and submitting purchase orders was a big task. We weren’t doing a great job of managing inventory at the local level – it was hard to get visibility into individual facilities and good inventory practices weren’t consistently applied. Finally, we didn’t have the reporting tools we needed and getting to data at both corporate and local levels was difficult.”
Combining Technology and Services to Solve Supply Chain Problems
To solve supply chain challenges, the team at Cornerstone considered a number of options. “We ultimately selected a combination of technology and services and implemented the Envi supply chain solution,” said Martinez. “We started with a phased roll-out at a single location, then expanded locations and Envi capabilities. At the same time, we moved to Provista for purchasing, so as we went live, two things happened simultaneously – we implemented a new purchasing platform and a new purchasing process.”
Martinez added Cameron Gummer as Corporate Purchasing Director. “Our materials managers went from creating and submitting purchase orders to creating order entries in Envi, which Provista issues as POs to our vendors,” said Gummer. “They use Envi to receive and track incoming items, manage inventory and reorder supplies, and they’ve eliminated the time spent issuing POs, getting confirmations, solving back-order situations and following up with vendors. Overall, it’s been a significant shift and we see multiple benefits. Our materials managers get time in their day that allows them to be more strategic. They have reporting tools they can use for better management at the local level.”
Envi Best Practice Drives Results
Over the past year, the team at Cornerstone has implemented process improvements and measured savings. Key initiatives focus on contract utilization, formulary development and inventory reduction.
“Success has been based on our joint efforts,” said Martinez. “Working together with the Provista and Envi teams, and training our end users on Envi technology, has helped us standardize our formulary, identify price discrepancies, implement better inventory receiving and tracking processes, and improve contract utilization. We’ve increased recognized contracts by 208%, standardized to a single distributor that covers 18 unique sites, and driven measurable savings. For example, last year we received a number of large credits due to previously inaccurate pricing. We can consistently identify correct contract prices now.”
Since beginning this process, the Cornerstone team has taken a phased approach for the roll-out. “In phase one, we gauged the behavioral reaction to see how our end users were doing,” said Martinez. “Then we expanded, and began addressing specific categories of spend. We deactivated some products outside the formulary. Next, we rolled out new steps to manage price discrepancies and off-contract purchasing. This phased approach and combination of technology and services has worked well for us.”
Improvements are made on an ongoing basis. “We used Envi to identify comparable products, then reduced SKUs and manufacturers, and moved toward more standardization,” added Gummer. “We’re benefitting from Envi’s reporting capabilities, which have changed the world we live in. We share information at both local and corporate levels, providing detailed information on supplies and costs. Local materials managers can pull data for their facility, helping them have constructive conversations with their CEOs about how dollars are spent. We use PO History and PO Receipt reports constantly.”
Best Practice Highlights
• Create enterprise-wide standardized formulary
• Streamline purchasing processes, increased contract compliance
• Execute phased roll-out of new processes and technologies
• Implement reporting tools for trusted reporting at corporate and local levels
• Achieve inventory reductions for cost savings
• Leverage scanning capabilities to reduce reordering time by 40%
• Reduce overpayments by managing price discrepancies, comparing purchase price to contract prices
The team at Cornerstone Healthcare understands that leveraging technology and services has paved the way for greater capabilities and improved results. They use data to ensure they are building a strong foundation. “Today our reports are based on data that’s accurate and trusted,” concluded Martinez. “If Envi didn’t work the way it did and Provista didn’t perform the way they have, our efforts would not have achieved such successful results. But both sides of the equation have really excelled and as a result, so have our efforts at Cornerstone.”