How Tennessee Oncology uses data-driven GPO and distribution services to succeed with value-based care
When Tennessee Oncology made the switch, “one of the largest conversions in the history of community oncology went without a hitch,” said Jeff Patton, M.D., Chief Executive Officer. Thirty-two community locations and 59 automated dispensing machines were converted in just 10 days, over the holiday season.
Now, more than a year after the conversion, “I continue to be impressed by the collegiality and respect of the relationship,” Dr. Patton said. “It’s a one-stop shop: a fully integrated GPO and distribution platform driven by data analytics—for both oral and IV medications—all from a single source.”
Just as important, the platform continues to evolve, adding new capabilities to address one of the greatest business challenges facing community practices today: how to manage the overwhelming amount of data available to help make more informed decisions.
“Typically, the data needed for effective decision making is spread across multiple systems,” said Ron Horowitz, Chief Financial Officer of Tennessee Oncology. “Via our collaboration with Cardinal Health Specialty Solutions, we have a single source for new insights and opportunities across the practice’s clinical, operational and financial performance—improving our day-to-day operations and supporting our goals to enhance patient care.”
The integration of oral and IV drugs into a single data management dashboard not only gives Tennessee Oncology full visibility into its spend, but also addresses a fundamental change in the treatment options available to patients. In the past, community oncology practices purchased primarily IV drugs, so their systems were naturally focused on managing this expense.
Over the past five years, oral medications have played a greater role in treatment. “Now, they’re an important part of our business model, at approximately 20 percent of overall drug spend,” Horowitz said.
This new and growing business line creates additional complexities and challenges for the practice’s business operations. For example, the billing procedures for oral medications are different than those used for IV drugs. The integrated dashboard helps Tennessee Oncology manage the change.
“Now more than ever, we don’t want to needlessly tie up our capital with inventory,” Horowitz said. “The collaboration with Cardinal Health Specialty Solutions gives us the intelligence to accurately forecast how much inventory to buy and hold—determine where to store it and how it’s used—and then ensure we correctly bill every time.”
By incorporating Inventory Management Solutions into its existing processes, Tennessee Oncology can see the current and total cost of drugs by overall system and individual site of care. The greater visibility is the foundation for making better decisions to help reduce waste, lower costs and improve staff productivity.
For example, Tennessee Oncology can set more accurate minimum and maximum product levels and determine the inventory status of different locations—including where there are shortages and items at risk of expiration—and then move them where they can be used more efficiently.
“This level of inventory and expiration tracking helps us avoid waste,” Horowitz said. “Also, from a purely accounting standpoint, we can focus on the full value of our inventory—including the total number of drugs in inventory and price paid for each—to help us better manage the expense.”
Tennessee Oncology also uses Inventory Management Solutions to free clinicians from the responsibility of inventory management. By doing so, they have more time to focus on taking care of patients.
“Nurses, pharmacists and other clinicians are naturally more concerned with patient care than managing inventory,” Horowitz said. For example, nurses want to make sure that physicians and their patients always have the right medications available when and where needed. Pharmacists want to make sure they can fill every prescription, so that patients can begin taking their medications as prescribed right away.
“Both scenarios can lead to oversupply and waste,” Horowitz said. By setting the appropriate min/max levels and aligning available inventory with actual utilization, the practice can reduce waste and cost—freeing up valuable resources to reallocate elsewhere for meeting practice goals.
The collaboration will continue to build new value, as Tennessee Oncology positions itself for success in the years ahead. “The next step is to conduct cost-of-care analytics using data pulled from clinical, financial and operational sources,” Dr. Patton said.
“This is one more way we’re working toward achieving our Triple Aim goals: using data analytics to help improve patient outcomes and satisfaction. A year after the biggest implementation in our industry, we continue to be optimistic about the future.”