On the Move
Inova Health System partnered with MedSpeed to drive its transportation logistics to the next level.
A Northern Virginia health system has found that good environmental stewardship and an efficient operation go hand-in-hand when it comes to internal transportation, otherwise known as intracompany logistics.
Inova Health System is a complex network of hospitals, outpatient facilities, physician practices, and health and wellness initiatives that serves more than 2 million people a year. That makes for an equally complex method of getting physical materials—blood samples, lab results, medical equipment, pharmaceuticals, supplies and more—from one location to another.
Inova wanted to make its internal logistics more efficient while at the same time improving patient care and helping the environment. In 2013, Inova hired MedSpeed, a company that helps health care facilities integrate the movement of physical materials through intracompany logistics. The company works with some of the country’s largest health systems, spanning 27 states.
“We engaged MedSpeed because they were the only organization that viewed transportation as more than just a courier service,” said Lance Greene, director of supply chain operations for Inova.
“Before implementing the MedSpeed changes, the health system had four separate transportation components, each with separate management oversight and budget responsibilities,” said Kathy Benn, vice president of solutions development at MedSpeed. “Sometimes multiple vehicles could be at the same site at the same time. And although the laboratory represented the largest component of intranetwork transportation operations, its transportation network operated independently.”
“We have a team of analysts, and we meet with the client quarterly. We measure route efficiency statistics, customer satisfaction and on-time reliability. If we don’t meet the contractual service level agreements and milestones, we’re financially penalized.” —Kathy Benn, Vice President of Solutions Development, MedSpeed
“MedSpeed helped centralize drug purchases to reduce costs and implemented a mechanism for sharing pharmaceuticals within the network to prevent inventory issues,” Greene added. Meanwhile, leadership also felt Inova was overusing an expensive urgent delivery service for time-sensitive requests.
MedSpeed started by collecting movement and cost data from Inova. Benn explained, “My role at Inova was to coordinate the assessment work with our analytical team. We took a comprehensive look at the health system’s entire transportation operation systemwide and found fragmentation. The pharmacy had resources moving things; the lab had resources moving things. There was a duplication of effort and limited visibility into what scheduled service existed [that] could be leveraged by other functional departments.”
Once MedSpeed had gathered the information about individual activities and time sensitivities, the company’s analytical team worked collaboratively with the Inova team to develop a more streamlined logistical operation. Benn said the new logistical operation has routing to support time-sensitive movements that need to get to their destination quickly, and there is flexibility for emergencies.
“For lab tests, there are sample viability issues,” she said. “They can’t ride around in a vehicle all day, and temperature states must be maintained appropriately.”
The change has helped Inova take other costs out of the system as well. For instance, a pharmacy that orders a 12-pack of a medication or supply while only needing two items can easily send the remainder to another facility that might need the same item, at no—or very little—extra cost. Medications that may potentially expire can be repositioned in another facility that can use them prior to expiration.
“Transportation is typically only 1 percent of a hospital’s or health system’s budget, but it touches and has impact on the entire system,” said Bonni Kaplan Dewoskin, vice president of marketing for MedSpeed. “Done right, intracompany logistics can create ongoing value by using transportation as an asset to drive savings on the 99 percent of expenditures that are outside of transportation, but still impacted by it.”
Chip Goyette, director of sustainability for Inova, said the changes to its transportation network were part of a larger effort to become “OneInova,” a network with an expanded centralized service center.
“The supply chain team realized it needed to build the required infrastructure network to intelligently connect its network and meet its ‘systemness’ and sustainability goals by driving integration and standardization, while removing waste and inefficiencies,” he said.
According to MedSpeed, opportunities to streamline transportation operations and find value opportunities don’t end once operations begin. The MedSpeed team continuously collects and analyzes data and uses that information to make recommendations for network enhancement. For instance, MedSpeed recently worked with Inova’s lab team to closely analyze and compare site pickup times with specimen counts collected at those sites. MedSpeed recommended the deletion of numerous stops with low specimen yields to eliminate 1,400-plus extra miles driven per week and add other efficiencies. Patient care result turnaround times were maintained, and specimen flow into the lab was not negatively impacted, allowing for productive lab resource use.
“It’s a continuous process. We’re constantly mining data,” Benn said. “We have a team of analysts, and we meet with the client quarterly. We measure route efficiency statistics, customer satisfaction and on-time reliability. If we don’t meet the contractual service level agreements and milestones, we’re financially penalized.”
According to Kaplan DeWoskin, many health systems are expanding their footprint and patient reach, which is why it makes sense for them to outsource services like logistics. This allows their health care teams to focus more on providing patient care and lets subject matter experts focus on other areas. It also allows health systems to use vital capital dollars for more strategic investments.
The changes also help reduce greenhouse gases from vehicles in an area of Northern Virginia notorious for its traffic congestion. Inova prides itself on taking care of the environment.
“Inova has a long history of environmental stewardship and embedding sustainability within our operations,” Goyette said. “This project is a great example of how improving our environment, making our operations more efficient and, ultimately, improving our bottom line, all go hand-in-hand.”