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Matthew Smith

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There's Still Room for Improvement: Strategically Optimize Your 340B Program and Ensure Compliance

Posted by Matthew Smith on May 30, 2019 7:24:03 PM

DruganS_SqScott Drugan, Pharm D., Senior Director with GE Healthcare Partners, sat down for a Q & A session about the 340B Program and shares his insights regarding the opportunities that are still available for hospitals to improve and optimize their respective programs.

Drugan’s expertise enables hospitals and health systems to improve pharmacy operations, develop and enforce utilization guidelines, implement complex 340B programs in a compliant manner, optimize employee pharmacy benefits, and establish retail and specialty pharmacies.  

Question: The 340B Program was introduced to Disproportionate Share Hospitals as part of the Omnibus Reconciliation Act of 1992, with Critical Access Hospitals, Free Standing Children’s Hospitals, Free Standing Cancer Hospitals, Rural Referral Centers, and Sole Community Hospitals being added as part of the Patient Protection and Affordable Care Act of 2010. So, with the 27 years and 9 years respectively, since these hospitals qualified for the 340B Program, what can possibly be left to optimize?

Drugan: Admittedly it has been a bit surprising that nearly every health system we have encountered has significant room for improvement/optimization as it pertains to their respective 340B Program. However, when you think about all the possibilities within the 340B Program, it may be easier to understand why hospitals implement to a certain degree and leave additional areas untouched. A few examples would be:

  • A large academic disproportion share hospital may have implemented and optimized the program with all their hospital outpatient administered drugs, but not developed the appropriate 340B contract pharmacy network to pull in all the prescriptions generated from hospital-based outpatient clinics, emergency room visits, and discharge prescriptions.
  • Another scenario may be that a health system or hospital that is self-insured with considerable 340B qualified hospital-based outpatient services has not yet encouraged the care of employees and dependents at these locations to reduce the plan’s pharmaceutical cost as the prescriptions generated from these visits qualify for 340B pricing.
  • A final example pertains to the evaluation of physician practices versus hospital-based practices. Specific specialties (e.g., oncology, neurology, and rheumatology) are hospital-based within a 340B qualified hospital, and the service locations are enrolled in the program. The prescriptions generated from these services will qualify for 340B Program pricing.

There are many other optimization opportunities that should be customized or tailored to a specific hospital or health system and, very importantly, these can all be accomplished in a regulatory compliant manner.

Question: Since these potential un-tapped 340B drug pricing savings that you describe seem to be very substantial, why don’t all qualified hospitals take advantage of this program to the greatest extent possible?

Drugan: We encounter many reasons for hospitals and health systems to not fully optimize the 340B Program. A few of the reasons we have seen in the past are:

  • A hospital may have implemented with the understanding that it will provide savings in a specific area, such as infusion services. They work through the implementation process, which can be complicated, develop policies and practices to maintain compliance, monitor the results, hit their targets, and feel very proud of this success. The thought of continued expansion of the program may at this point seem rather daunting.
  • The 340B Program has received a lot of scrutiny over time, and periodic proposals to reduce its scope or impact or limit the growth of the program coupled with the efforts to compliantly implement has many organizations questioning the value of program optimization.
  • Lastly, a hospital with a more robust 340B program may face an increased risk of an HRSA audit. Since no one relishes a governmental agency audit, hospitals are a bit hesitant to pursue all 340B optimization opportunities.

Question: Hearing some of the regulatory challenges that you described and the added burden of the increased probability of a HRSA Audit, you can understand the hesitancy to move forward with some of the 340B Program optimization opportunities you previously described. How can you overcome or provide necessary safeguards to ensure--or at least minimize--the probability of non-compliance with the program and/or negative audit findings and sanctions?

Drugan: Simply stated, it takes a commitment to understanding program requirements and the dedicated time and effort to implement and maintain this compliance throughout all areas that a hospital may pursue the 340B Program. A careful return on investment evaluation should be conducted to determine if the value of the program’s expansion or optimization will be greater than the time and effort necessary to manage the program. It should be noted that with the high cost of outpatient pharmaceutical care and the substantial discounts available with the 340B Program, it is becoming increasingly rare to find situations where the savings is not worth the investment. To assist in the process, there are external experts who are available to help

  • Identify opportunities;
  • Develop implementation plans;
  • Provide implementation support (inclusive of developing policies and procedures for compliance, education, and training of internal staff); and
  • Ultimately engage with the enrollment of the hospital or its additional program expansion areas with HRSA.

Additionally, there are 340B providers--such as 340B administrators and outside auditing firms--that should be considered a necessary cost of doing business as it pertains to creating a 340B compliant environment.

Question: Although you have described the extraordinary value of the 340B Program and the basic path to regulatory compliance, with all the conflicting priorities within these hospitals and their potential limited resources, how would you expect hospitals to successfully move forward?

Drugan: We do not envision this differently than any other service that a hospital contemplates pursuing as it tries to fulfill its overall mission in a financially viable manner. There must be a commitment to additional cost or resource investment to optimize or expand the program, and we would highly recommend that a hospital not pursue this optimization opportunity without understanding this need.  The growth of the 340B Program should be considered alongside other areas of investment to determine which has the greatest probability to deliver value to the organization. It is with rare exception that the 340B Program expansion does not become a top priority.    

Question: You seem to imply that a hospital may not be successful without some outside assistance or expertise or additional resources. Do you believe this to be an imperative, or can a hospital independently set up processes for compliance that will drive optimization in a very efficient, non-resource intensive manner?

Drugan: We would not recommend that a hospital move forward with the initial implementation of the 340B Program let alone the expansion or optimization that we have described without understanding that it will take more time, effort, and resources. However, the overall return on this investment should be very high. On the other hand, while it is certainly possible to successfully implement without external partners; the return on investment of a partnership to support implement and optimization in an expedited manner would also be extremely positive.

Closing Comment: This was a lot of good information. Is there any last tip that you would like to leave with the readers?

Drugan: I would like to take this opportunity to state that we do our very best to stay current with the 340B environment and proposed changes to the program. However, we cannot predict the future. While we are very certain of the opportunities that this program provides to qualified organizations today, we recommend that a careful evaluation of this opportunity be conducted within all qualified organizations and that there should not be a reluctance to expand or optimize the program, but rather a recognition that there must be an appropriate investment to provide executive oversight and daily management to drive program compliance. Like most areas of investment, there should be a business case to support this additional cost and a belief that there will be a very high probability that when objectively evaluated, the value will far outweigh the investment.

Contact GE Healthcare Partners to Help Optimize Your 340B Program

Topics: 340B

Strategic Partnerships in an Era of Value

Posted by Matthew Smith on Apr 16, 2019 12:42:15 PM

By Helen Stewart, Managing Principal, and Eric Kammer, Senior Principal, GE Healthcare Partners

Click here to download this article as a PDF file

To survive in the world of value-based care, healthcare organizations are exploring innovative partnership business models that focus on outcomes, not just activity. These partnership models can range from actual new legal entities and joint ventures to long-term, collaborative engagements rooted in driving outcomes. These models allow providers to leverage expertise, state-of-the-art analytics, and emerging technologies to transition from a narrow product strategy to a broader ecosystem approach.

Traditionally, hospital strategy has sought to deliver a slate of high-value inpatient services centered around surgery, diagnostics, and acute care. With hospital economics increasingly undermined by shifting volume and payment trends, organizations need to pivot from this traditional “product” strategy to a broader “ecosystem” approach to become the central player within a wider value chain of healthcare services.

An Innovator or an Input

Although healthcare leaders understand that standing still is not an option, they are challenged to be creative in designing new approaches to disruptive trends. Some are attempting to leverage network effects and economies of scale. These executives are focusing on mergers and acquisitions, often accompanied by cost-cutting initiatives and electronic health record (EHR) implementations.

Other leaders, however, are committing strongly to an ecosystem approach. To better understand this strategy, consider the evolution of Apple. Initially it was a niche computer company with a product focus. Over time, the company’s strategy became holistic, bringing together a broad set of diverse digital offerings—phones, tablets, watches, music streaming, and more—all united by the company’s singular design vision. Apple moved from being a product supplier to a lifestyle influencer for millions of consumers, generating tremendous value in the process. Similarly, progressive hospitals are now assembling diverse but mission-aligned capabilities to move beyond their walls and out into the healthcare ecosystem in order to increase their relevance and value across the patient journey.

A critical thread of the new healthcare ecosystem is precise care. New therapies and care models are just the start. Inputs also include more care sites (from acute care to outpatient clinics to home services) and more data (not just from the EHR, but also from health plans, wearables, and smart devices).

Several organizations outside the provider world are positioning themselves to lead the new healthcare ecosystem through ambitious partnerships and enterprises. As these disruptive partnerships solidify their control of patients, patient data, and outpatient access, they will create tremendous opportunities to capture an increasing share of the healthcare ecosystem.

Hospitals risk losing ownership of the patient journey and becoming a single “input” in the care delivery system. If this happens, the hospital business will be reduced to low-margin inpatient care characterized by declining volumes, declining payment, and high fixed costs.

3 Partnership Solution Ideas

One way for hospitals to avoid this fate is to form disruptive business models with non-provider organizations. Forward-thinking healthcare leaders see these partnerships as their chance to build a health-system-controlled ecosystem by harnessing data, leveraging technology, rethinking existing infrastructure, and creating new care models. Below are three ideas to consider.

Partner to cross the finish line, not just complete the punch list. Cross-capability partnerships have a higher chance of success when they are founded on “co-resourcing.” Consider how Amazon, Berkshire Hathaway, and JPMorgan are working together. This is not a vendor relationship but a true partnership in which each organization brings its capabilities to the table to accelerate change and innovation.

For healthcare organizations, the non-provider partner similarly must offer complementary resources that enable leaders to push the ecosystem strategy forward with greater velocity.

Partner to create new value, not just fill gaps. The co-resourcing approach also has implications for managing the evolving healthcare ecosystem, and it requires alignment on a shared vision and clear set of incentives. Healthcare organizations cannot simply turn to vendors to fill capability gaps as they have for decades. Instead of the traditional transactional client/service-provider model in which value is exchanged, healthcare organizations should seek outcomes-based business models that link partnering organizations side by side to create breakthrough value.

To deliver value creation solutions within a broader ecosystem strategy, healthcare organizations require partners with expertise in areas that may not even seem fundamental to the problems at hand. This includes leadership capabilities in digital health, emerging technologies, artificial intelligence, simulation modeling change management, and other domains.

Partner to achieve lasting change, not a limited fix. Partnerships are a long-term endeavor, and health care is a dynamic industry. For partnerships to deliver on their value potential in this ever-changing environment, strong governance mechanisms are essential. A “relational governance” model offers a stable structure to enable true risk sharing.

In a conventional transactional relationship, the consulting firm or vendor reports to an individual member of the healthcare organization’s executive team. This executive is the ultimate decider regarding the entire relationship. In a partnership, however, decisions are made by a shared governance body that includes representatives from both partnering organizations. Because the partners share long-term financial, operational, and clinical goals, it only makes sense that they share equally in setting priorities and making ultimate decisions. A key is to implement a governance model focused on insights versus oversight.

Finally, historical experience and current economic constraints make many provider organizations highly constrained to drive change. Engaging a nontraditional partner can help drive innovative thinking and quicken the pace of adoption. Just as important, an outcomes-based partnership can help a hospital organization maintain strong operations and revenue in the current payment environment of today while it builds and implements the organization’s ecosystem strategy for the future.

Helen Stewart is managing principal, GE Healthcare Partners (
Eric Kammer is a senior principal, GE Healthcare Partners (

What's Different About GE Clinical Command Centers?

Posted by Matthew Smith on Apr 2, 2019 1:18:20 PM

How do GE Clinical Command Centers complement existing technology and investments? By putting data to work in new ways, command center staff can help caregivers help patients with pathways, risk of harm, staffing, and many other topics. Right now.

This short (0:55) explainer video highlights the differences between workflow software and GE's optimization software. 

Topics: Clinical Command Center

Adventist Health & GE Healthcare Announce a First-of-a-Kind Performance Collaboration in the Western U.S.

Posted by Matthew Smith on Mar 5, 2019 7:16:24 AM

Designed to Create Capacity for Growth, Increase the Lifecycle Management of Clinical Assets, Improve Patient Care, and Target $100 Million in Benefit over Five Years

Adventist Health and GE Healthcare announced today a collaboration that will help transform healthcare delivery and patient experience across the 21-hospital system in California, Oregon and Hawaii. During the next five years, the organizations will partner to maximize the capacity of the system’s clinical assets and leverage them to improve patient care delivery. The collaboration will provide health system leaders with better information through advanced analytics and reduce process variation to improve the quality and reliability of care. In addition, the collaboration is expected to enable growth and yield cost-saving efficiencies which create a financial improvement of more than $100 million over five years.

“GE Healthcare understands that at the center of our mission of living God's love by inspiring health, wholeness and hope is a transformation of the way our communities experience health care,” said Bill Wing, president of Adventist Health. “We believe this relationship will help us deliver innovative, patient-centric care, with the goal of improving the community’s health experience and making care more accessible and affordable."

“We are looking forward to continuing our relationship with GE Healthcare, a company that brings access to market-leading resources, expertise, advanced analytics, and proprietary tools,” said John Beaman, chief business officer, Adventist Health. “This is an opportunity for us to improve service operations, provide more alignment across our service program, and increase utilization of clinical assets to provide higher quality care.”

Adventist Health is the latest health system to enter a long-term, strategic risk-sharing relationship with GE Healthcare over the last two years. Other performance partnerships include Jefferson Health (Philadelphia, PA), Hartford Healthcare (Hartford, CT), Lifespan (Providence, RI), Mission Health (Asheville, NC), Navicent Health (Macon, GA), and Temple Health (Philadelphia, PA).

“Adventist Health leadership saw the long-term advantages of partnering with GE Healthcare to advance their mission and growth strategies, drive change and reshape the future of healthcare for their communities,” said Helen Stewart, managing principal, GE Healthcare Partners.


Click here to view this news release on BusinessWire.


About Adventist Health

Adventist Health is a faith-based, nonprofit integrated health system serving more than 80 communities on the West Coast and Hawaii. Founded on Seventh-day Adventist heritage and values, Adventist Health provides care in hospitals, clinics, home care agencies, hospice agencies, and joint-venture retirement centers in both rural and urban communities. Our compassionate and talented team of 37,000 includes associates, medical staff physicians, allied health professionals, and volunteers driven in pursuit of one mission: living God's love by inspiring health, wholeness, and hope. Together, we are transforming the American healthcare experience with an innovative, yet timeless, whole-person focus on physical, mental, spiritual, and social healing. For more information about Adventist Health, please visit

About GE Healthcare

Harnessing data and analytics across hardware, software, and biotech, GE Healthcare is the $19 billion healthcare business of GE (NYSE: GE). As a leading provider of medical imaging equipment, with a track record of more than 100 years in the industry and more than 50,000 employees across 100 countries, we transform healthcare by delivering better outcomes for providers and patients. Follow us on Facebook, LinkedIn, and Twitter or The Pulse for the latest news.

Jefferson Health Reports Success 2 Years Into GE Healthcare Partnership: 6 Questions with Chief Integration Officer

Posted by Matthew Smith on Mar 1, 2019 2:38:32 PM

Philadelphia-based Jefferson Health embarked on an eight-year shared-risk partnership with GE Healthcare in July 2017 to optimize its patient care strategy.

Now, almost two years later, Becker's Hospital Review caught up with Jefferson Health to learn more about the partnership's progress.

The goal is to generate between $500 million and $1 billion in savings by removing redundancies and maximizing sourcing throughout the health system's locations in Pennsylvania.

One of the project's core tenants is using technology to improve strategic growth, operations, integration and performance opportunities.

To read the full article in Becker's Hospital Review with Jefferson Health Executive Vice President and Chief Integration Officer Kathleen Kinslow, EdD, please click on the button below:

Click to Read

Topics: Command Center

GE's Unique Approach to Clinical Command Centers

Posted by Matthew Smith on Jan 31, 2019 1:31:39 PM

Reading through healthcare magazines and websites, you may notice quite a few firms are talking about Command Centers. More firms than ever before presented their versions at Arab Health, and you probably see the same on LinkedIn and Twitter. You may also know that GE Healthcare is building clinical command centers supporting dozens of hospitals in three countries with more starting each month. 

So How is GE's Approach Different?

GE Healthcare’s approach to Clinical Command Centers is agnostic and unique, and we view other firms as current or future partners rather than competitors. We believe there is virtually no overlap between our technology and theirs, and that by working together we can make a bigger impact for providers.

Command Center Landscape, January 2019

What’s different about GE Healthcare?

Our capability is unique in both technology and method. The technology is unique because our platform, Wall of Analytics, is scalable and agnostic (taking data from all sources), and delivers apps that are real-time, actionable, and create new information with AI. The method is unique because we deliver a holistic transformation. By holistic we mean physical space programming, new role creation, rules-based protocols, data integration, platform and apps, video wall, change, and activation. By transformation we mean that by engaging hundreds of staff in problem-back design and implementation, we not only ensure that staff understand and embrace their Clinical Command Center as an asset rather than a hindrance, but also that we help to achieve a more integrated culture. This approach has evolved through experience and so far has delivered breakthrough sustainable outcomes.

KLAS Report 

KLAS’s December 2018 report on “Operational Command Centers,” their first report on the topic, may be accessed here. It correctly captures some key points, but misses on a few others.

  • Key point: Page 4 correctly notes that GE Healthcare’s technology approach is unique in that we combine streaming data from multiple systems.
  • Key miss: The title of the report, Operational, is limiting. The scope of our Clinical Command Centers already extends into quality, safety, and other more clinical topics. We believe this scalability is essential for a great Clinical Command Center or "Mission Control," as some clients refer to their Command Centers.

Frost & Sullivan Award

Read the Frost & Sullivan report commending the GE Healthcare Clinical Command Center Solution here. This was an unsolicited award and came as a surprise when the firm called to notify us of the award. They found that "unlike competing command centers that serve specific objectives, GE Healthcare’s solution is holistic and custom- fitted,” and that “the GE approach is technology- agnostic.”

Vendor Perspectives

Epic and Cerner are incredible firms that automate all sorts of workflows… workflows which are the heart of organizing healthcare delivery. Along with Meditech and AllScripts, these are the titans of health IT. (We partner with all of these firms today to stream data into the Wall of Analytics).

The architecture of workflow systems, including EMRs, makes it an unnatural act to surveil risks across workflows in real-time. Thus the “Command Center” capabilities found in EMRs tend to feature retrospective reports and KPI dashboards rather than patient-level actionable alerts.

EMR companies are, of course, technology focused and we are unaware of any “consulting” services offered by these firms to help clients design and activate the non-technology aspects of Command Centers.

Other companies create workflow systems for patient flow topics like bed management, EVS and transport, and transfer centers. (We integrate their software today to stream data into WoA).

While many of their modules are often considered better than the EMR-equivalents, many of our clients are nonetheless in the process of replacing these systems with their Epic or Cerner equivalent because the clients believe EMRs are catching up and they want to consolidate workflow systems as much as possible.

The buzz around “Clinical Command Centers” has seen many groups re-label a bed management or transfer center as a Command Center. This makes sense in context, but is different from GE’s approach. By “Command Center” they mean displaying screens from a patient flow workflow system onto large monitors; and KPI-dashboards that show things like door-to-doc time, which is important but not actionable.

Steris, MedWorx, PedalMD, etc. There are hundreds of other workflow systems in healthcare, but they have not suggested “Command Center” capabilities. (We integrate their software today to stream data into WoA).

Accenture & McKinsey. These and other consulting firms have suggested Command Center-like solutions from time-to-time. The most notable example was when Accenture won the bid from Rio de Janeiro to build a city health Command Center. But their capability was limited to retrospective BI and, in the end, the project was abandoned. 

BI, Reports, and Actionable Analytics

A key factor to consider is the difference between business intelligence dashboards, reports from workflow systems, and actionable analytics.

BI dashboards in healthcare are usually built on data warehouses which update once or twice per day. Tableau and QlikView are the market leaders while Microsoft and others have renewed their offers in this competitive space. These BI tools are useful for thousands of problems, but we find them not useful for real-time decision support. Since Clinical Command Centers, in GE’s meaning, are all about immediate action, we find that BI is not fit for this purpose.

Workflow systems also offer a form of built-in BI which most users know as reports or analytics. These too are useful for thousands of problems but not for the real-time action needed in Clinical Command Centers.

Actionable analytics are real-time because they are created from high-velocity streaming messages rather than by querying the dB. This is extraordinarily difficult to do--requiring both the right technology and intense services--but when done well can be revolutionary for real-time decision support. This is a small niche where GE’s Clinical Command Center approach is making a difference.


Case Study: Humber River Hospital's Command Centre--Year One In Review

Posted by Matthew Smith on Jan 29, 2019 10:41:35 AM

Humber River Hospital's Command Centre is the confluence of artificial and human intelligence coming together 24 hours a day, seven days a week, detecting risk, coordinating complex care activity and backstopping care teams in real-time.

Read about:

  • How the Humber River Hospital Command Centre intervenes to alleviate pressure on the system as well as stress on hospital staff;
  • The difference the Command Centre has made on caregivers who no longer have to rely on daily heroics to deliver their best care;
  • Humber River Hospital's position in the GE Healthcare ecosystem;
  • How Humber River Hospital leadership achieved buy-in for the Command Centre
  • Generation 2: High-reliability healthcare; and
  • The future of data-driven decision making.

Click the button below for an instant download:

Humber River Hospital Command Centre

Topics: Command Center

Your Hospital's Command Center: Decision Support Tile

Posted by Matthew Smith on Jan 25, 2019 3:25:18 PM

Topics: Command Center

Humber River Hospital Unveils New Command Centre [via CTV]

Posted by Matthew Smith on Jan 25, 2019 2:59:37 PM

Topics: Command Center

Humber River Hospital: Building a Digitally Advanced Command Centre

Posted by Matthew Smith on Jan 25, 2019 2:00:33 PM

Topics: Hospital Command Center

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