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Sourcing & Procurement

HCA Gets Close to Its Vendors to Create Better Partnerships, Solve Problems

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HCA has more than 185 hospitals in 23 of the largest markets in the United States.

When patients seek out medical care, they want to be treated by skilled professionals who carry extensive expertise. HCA Healthcare has earned a positive reputation in its market by employing such a team, Assistant Vice President of IT Procurement Chris Rhinehart says.

Today, “We have very strong leaders and business practices centered on operational excellence,” he states. “We’re very much viewed in the manner that we’re the best operators in the business.”

The Nashville, Tenn.-based healthcare provider operates more than 2,000 points of care to serve patients. It has more than 185 hospitals in 23 of the largest markets in the United States, Rhinehart says.

Positive Results

A 20-year veteran of procurement, Rhinehart joined HCA 11 years ago and today oversees a 24-person IT procurement team. While it does not oversee procurement for the entire organization, “We handle most of it, from what has been centralized from a technology or solutions standpoint,” he explains.

During his tenure at HCA, he has overseen multiple initiatives, including the start of formalized briefings with vendors. Six years ago, when Rhinehart was chosen to lead the healthcare provider’s centralized IT procurement operation, it started a series of meetings with vendors.

Now, each quarter, HCA’s selected vendors will meet with its chief information officer, his extended staff and its owners. “Typically, it’s a three-hour, very high-level, strategic executive discussion,” Rhinehart describes.

During these meetings, HCA discusses with its vendors how it can maximize the value of current and future investments, as well as form strategic relationships with contractual agreements. “[Those] bind us towards high availability and resiliency,” he describes. 

The meetings also helped HCA work with its vendors to find ways to avoid technical disruptions or network outages that could prevent it from providing patient care. “We’ve seen very positive results — in reduction in the number of those types of outages but also an increase in our ability to resolve and recover from them,” Rhinehart reports. “We’re expanding our strategic partnerships with good success.”

A Big Jump

Rhinehart is overseeing the start of a discovery phase at HCA that will move it to the next-generation procurement platform from its current one. “It’s quite old,” he says of the legacy system. “We’re pretty excited we’ll be taking a 10-year jump in technology.”

HCA has chosen to utilize technology from a proven partner. “As part of that journey, we hope to redefine some of our processes, consolidate some tools and take on new functionality,” Rhinehart says. “We’ll deliver greater value to the organization in doing so.”

For example, once the new technology is implemented, HCA will consolidate many disparate systems on the same platform, as well as ensure that legacy systems are connected and can talk to each other. Currently, “There are known functionality within legacy systems we can’t utilize,” he admits. “All this boils down to the fact that we’re on a very old system.”

But once HCA implements the new platform, Rhinehart anticipates that the company will have greater visibility of aspects such as spending and can review the responsibilities its associates have across its entire enterprise. “We’re looking forward to that,” he says.

Making a Move

HCA’s initiatives also include moving to a subscription-based model. Rhinehart explains that many of the company’s vendors are moving away from a perpetual license model to a term-base or SaaS-style solution. 

These do away with the idea of buying a perpetual license, but they also give HCA less flexibility. “In theory, it could put you in a position where you have less autonomy in how you go about managing or deploying software that you buy,” he describes.

This may be an issue for HCA, depending on the type of software solution that it looks at. For example, the company may not be comfortable with solutions hosted in the cloud, Rhinehart admits. “We may have to go with another vendor,” he states.

HCA also may need to adjust to vendors changing their licensing models during the lifecycle on a product. “It becomes a little more challenging to manage when you’ve got some licenses that have no end life and some that have some type of term,” he says. “If you’re not planning correctly, you could get surprised with an invoice from the vendor for a license fee you hadn’t planned on.”

‘Excellent Level’

Rhinehart sees growth ahead for HCA. While the healthcare provider will focus on improving its services in its current markets, it also will branch out to others. It plans to continue “to invest in the technologies and people we have here every day that provide that excellent level of patient-focused care,” he says.

“I truly believe that we are an industry leader in many ways,” Rhinehart continues. “I hope not only for my professional sake, but my personal sake, that this company continues on this path.”

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