Ascension GPO leader talks top supply chain issues, how to solve them

Scott Caldwell is president and CEO of The Resource Group, the group purchasing organization created by St. Louis-based Ascension. 

He recently spoke with Becker’s about the top issues hospital supply chain leaders are facing and how his team handles them at Ascension.

Here’s what he had to say: 

Editor’s Note: Responses were lightly edited for length and clarity. 

Question: What are the most pressing issues for hospital supply chain leaders right now?  

Scott Caldwell: Rising pharmaceutical costs present one of the most urgent and unsustainable. We continue to see aggressive and unwarranted price increases for drugs that are critical to care for patients and where substitutes are not available. For hospital supply chain leaders, this paradigm is not only pressing, it is unsustainable.

Q: How are you addressing those issues at your health system? 

SC: We have adopted new cost mitigation strategies in a number of pharmaceutical areas, including the use of eAuctions to increase competition and transparency; a pharmaceutical inventory management system and processes; clinically appropriate auto-substitution programs; and antimicrobial stewardship programs. 

Q: How is the industry of hospital supply chain changing? 

SC: In 2009, Ascension created The Resource Group to address increases in nonpayroll costs. We quickly recognized that the primary focus should be on the end user, not the adoption of the newest trends in warehousing or inventory management. Our model is built on the concepts of high quality customer service, hospitality and listening. Everything we do is with these concepts in mind, and this is where the industry needs to go.

Q: What advice do you have for other supply chain leaders at large health systems?  

SC: Supply chain leaders are often faced with what are considered two conflicting priorities: lowering costs and satisfying clinicians. For Ascension, we successfully manage this conflict through customer engagement. We have been able to reverse supplier practices of increasing prices. These price increases have been at the detriment of those we serve.