Supply Chain Management

In this section:

Strategy

As a shareholder of Premier, Inc., a national group purchasing organization, Texas Health has access to high-quality healthcare products and services at a lower price. We also:

  • Source from local and U.S. suppliers to minimize delays caused by global supply chain issues.
  • Maintain a strong financial position to keep essential materials in stock to deliver safe, quality care while keeping employees and consumers safe.
  • Aim to provide fair and equitable business opportunities to minority and women-owned business enterprises (MWBEs).
  • Purchase environmentally friendly materials when feasible to keep our workplace and healing environments healthy and reduce landfill waste.
  • Continuously monitor supply availability to refill items before they are needed.
2021 Highlights
  • Reduced supply expenses by $27.2 million despite inflation and global supply disruption, nearly achieving our $30 million goal. We saved $8 million more than in 2020.
  • Maintained procuring essential personal protective equipment, medication and other supplies to deliver safe and effective care while the global supply chain continued to be impacted by the pandemic.
  • Joined other U.S. health systems to acquire a minority stake in a specialty pharmaceutical company to secure a vital supply of pharmaceutical products and support domestic production.
Snapshot: Expanding Access to Critical Medications

U.S. health systems have experienced medication backorders and shortages for years, but global supply chain challenges compounded by the pandemic have made it more difficult to maintain an inventory of critical pharmaceuticals.

To help relieve this burden, Texas Health participates in the Premier® ProvideGx® program, which brings an increased supply of generic drugs to the group purchasing organization’s members. In 2021, we joined 10 other national health systems to purchase a minority stake in U.S.-based Exela Pharma Sciences. This investment will allow our system to receive an uninterrupted supply of specialized medicines at a lower cost while supporting domestic drug manufacturing. We also sit on Exela’s advisory board to help identify future medication needs.

Standards and Expectations

Our suppliers must comply with laws and regulations, abide by our business practices and meet our cost, quality, safety and satisfaction standards. We evaluate their performance annually on approximately 30 criteria, including cost, quality, responsiveness and assurance of supply, and steps to reduce environmental and social impacts. If improvements are needed, we help create action plans. If we see little change in resolving issues, we may terminate a contract.

Sharing Best Practices

Our for-profit subsidiary, OnHand, powered by Texas Health Supply Chain Services, helps non-acute care providers and smaller organizations make their supply chains more efficient, affordable and reliable. Participants receive access to Texas Health’s discounted purchasing contracts, robust materials management information system and operational expertise.

Supplier Diversity

To award business contracts with qualified MWBEs, Texas Health engages the Dallas-Fort Worth Minority Supplier Development Council, U.S. Pan Asian Chamber of Commerce, Hispanic Chambers of Commerce, National Minority Supplier Development Council and Premier’s Diverse Supplier Committee.

We also encouraged MWBEs to let us know about their capabilities and services to consider these organizations when issuing requests for products and services. In the last five years, Texas Health has spent over $85 million with MWBEs.

We will soon unveil tools and resources to enable MWBEs to identify potential business opportunities with Texas Health faster and complete the MWBE certification process.

2021 Highlights
  • Spent $30.6 million with MWBEs, up from $15 million in 2020. Several large contracts were for personal protective equipment. We also added tools to monitor spending with diverse suppliers more accurately.
  • Enhanced our supplier portal to enable companies to register their business and diversity certifications, resulting in 57 new MWBEs submitting information for contract consideration.
  • Updated our Request for Proposal policy with language that encourages MWBEs to bid on categories and to consider suppliers’ diversity status when assessing potential business contracts.

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