Taking The Supply Chain Pulse
St. Onge’s Healthcare Hall of Famer and industry icon, Fred Crans, chats with leaders from all areas of healthcare to discuss the issues of today's- threats, challenges and emerging trends and technologies in a lighthearted and engaging manner.
ENGINEERING A BETTER HEALTHCARE SYSTEM
We provide comprehensive planning and design services to develop world-class facilities and highly effective support services operations. Our capabilities in hospital supply chain consulting include applied industrial engineering, lean methodologies, systems thinking, and operations research to enable improved patient care and staff satisfaction. We are proud to have worked with over 100 hospitals, including 18 of the top 22 in the US, utilizing diverse design strategies, post-construction implementation, and change management.
Taking The Supply Chain Pulse
Rand Ballard's Odyssey from Cattle Ranch to Supply Chain Summit
From his roots on a cattle ranch to the pinnacle of healthcare supply chain innovation, Rand Ballard's story is a tribute to the tenacity and vision required to scale professional heights. As your host, Fred Crans, I had the privilege of exploring Rand's extraordinary journey, revealing how a West Point education in nuclear physics and nuclear engineering steered him towards a pivotal role in orchestrating the healthcare supply chain. Our dialogue meanders through the foundational days of MedAssets, where Rand, alongside John Bartis, faced the stark reality of entrepreneurship and the grit needed to transform a startup into a success story. His personal anecdotes, laden with the wisdom of experience, are sure to resonate with anyone who's stared down the barrel of professional adversity and dared to dream big.
In the second chapter of our conversation, we peel back the curtain on the Chief Customer Officer's role, a position that's morphed from mere logistics to a strategic cornerstone within today's C-suite. Rand shares his acumen on navigating the treacherous waters of non-labor spend, inflation, and fluctuating insurance rates. More than just a discourse on strategy, this episode is a masterclass in the art of mastering interpersonal skills, a testament to the enduring power of relationships and responsive communication in the healthcare sector. We wrap up this illuminating discussion with an acknowledgment of the unsung heroes in our industry, extending an open invitation to share their stories on this platform, fostering a community where every voice can be heard and celebrated. Join us for an episode that's not just an interview, but a heartfelt journey with one of the industry's most influential figures.
Hello again everybody. This is Fred Kranz from St Onge here today with another episode of Taking the Supply Chain Pulse. Today, we are really fortunate to have one of my personal heroes in this industry, someone that I've respected for years and years, and I'm so happy to have him here. In fact, I'm going to do something right now that I've never done on one of these podcasts before, and that is read the information put out by his company, and the reason I have to do that is because, as far as I know, this person is not on LinkedIn, so you can't find it out yourself. I have to tell you about this. Here's the way it goes.
Speaker 1:Rand Ballard leads the member value and performance team for Vizient. This team champions member engagement activities across four geographic zones, as well as onboarding and implementation services. Previously, ballard served as MedAsset's Senior Executive Vice President and in the Office of the Chief Executive since 2008 and as Chief Customer Officer since 2006. He also served in the roles of Chief Operating Officer, president of MedAsset's Supply Chain Systems and Leader of the Company's Sales Team the company's sales team. Prior to joining MedAssets, ballard was Vice President Health Systems, supplier, economics and Distribution for Cardinal Health.
Speaker 1:He earned a master's degree from Pacific Lutheran University with a triple major in finance, operations and marketing. He was a Dean's List undergraduate at the US Military Academy at West Point and earned a bachelor's degree with concentration in nuclear physics, nuclear engineering and business law. An avid community partner, ballard has served as chairman of the board of the Meals on Wheels Association of America Foundation, vice president of Hire Heroes USA and vice President of the Health Careers Foundation, a nonprofit organization that provides scholarship and low-interest loans to non-traditional students pursuing a degree in the healthcare field. So, rand, welcome to our broadcast. It's really great to have you here.
Speaker 2:Well, I can only mess this up now, Fred, after an introduction like that.
Speaker 1:Oh my gosh, you know but I appreciate it very much. Yes, I owe you one. You gave me a great introduction when I got inducted into the Bellwether.
Speaker 2:League. You know, I remember that I was honored. I was honored.
Speaker 1:So one thing I would point out to everybody when I was a young guy, one of my early heroes was Charles Housley. And Housley and Housley once told me Fred, you don't have to be a rocket scientist to be a materials management leader. All you have to do is know when to rotate the coats at Sears. But that means that you're tremendously overqualified for where you're working, man, because you are a rocket scientist. You got your degree in nuclear physics and nuclear engineering, so that puts you way too qualified to be working where you are. Tell got your degree in nuclear physics and nuclear engineering, so that puts you way too qualified to be working where you are. Tell us your story, tell us about your journey to where you are today.
Speaker 2:Well, you know, I was born on a cattle ranch and in the second grade I told my dad that this whole ranching activity is not for me. Like you have chores, you have stuff like that. And I explained to him that my talents were elsewhere. My brothers could dig foxholes, build barns, so he said you better get a scholarship. So I started then and I was a very motivated young man and had a few scholarships to choose from and I chose West Point. Then I was totally gung ho, even though I had a little bit of trouble getting through school. Uh, not academically, just discipline wise. And fred, knowing me, you could understand that.
Speaker 2:right, I always thought I always thought rules are not black and white, they should be a little gray, and that doesn't work necessarily in the united states army, as you know. Um, so when I graduated I was gun ho general's aide, everything else, and I ended up taking my first leave after four years. I took a 60-day PCS and a fellow graduate called me and said you owe it to yourself to build nuclear bombs, build nuclear reactors, do stuff like that for the army. And I fell in love with American hospital supply and they stole me from the army and it just changed my life. So it's like Robert Frost said I took that road, less traveled, and it just served me well.
Speaker 1:It wasn't Robert Frost, it was Yogi Berra who said when you come to the fork in the road, take it yeah.
Speaker 2:You know the thing about Yogi's colloquialisms. They're always correct. You know what I mean. You have to think about them.
Speaker 1:Yeah, yep. So we've known each other for what? Almost 30 years, I believe Over 30 years yeah. I wrote down the progression from American to Baxter to Cardinal, because we've been through all three of these, you and I have. Yes, yes, there are fewer and fewer people that can say that, but what was it like building a GPO from scratch with John Bartis at MedAssets?
Speaker 2:You know, when John called me and said, hey, I'm going to buy a GPO and I want you to, you know, come and be my partner and co-founder of this thing. And I said, well, john, why would you buy a GPO? You know, I mean, I just don't, I just don't get it. You know, I'm calling on him. I just don't see the value. He says he had this vision. He said we're going to disintermediate the GPO, we're going to change it. And he said you know, we can do things that they've never even thought of and we can really really do hard financial guarantees, do things that will make a difference for the providers. And you know, I had a pretty good Rolodex when I was at Cardinal because I was in charge of all the IDNs and stuff. When I left and we started MedAssets. It's amazing how few people return your call Right.
Speaker 2:And I remember that, fred, I remember that very, very well and you were one of the ones that did, and you know, and so it took us a while and we finally got a hospital and then we got a second one and I guess the rest is kind of history there. But I remember being with John and we had a million dollar revenue month and we bought a bottle of wine. I also remember being with John and we ran out of money and we had to take money out of our savings, put it into the company, right. So you know we were true entrepreneurs. Then we had a two million dollar month. Then we never got any more wine, you know, and and it just kind of took off.
Speaker 2:And if you could have told me that 18 years later that MetAssets would have been sold for $2.55 billion all cash I would never have believed it. I would never have believed it. You know, when we started, you know, particularly when you know there were some times we were struggling a little bit, made some wrong decisions, always trying to do the right thing for the customers. But it was just, it was a heck of a lot of fun and it was a great journey. Yeah, what?
Speaker 1:would you say, set you guys apart from the for younger folks there used to be. Let's see, the GPOs were VHA, amhs, which became part of of premier. Then there was the original old premier and then the, the um, the group purchasing arm of of um. That became uh, health trust. Uh, was there always? Always a part of hca? Uh, and the two late arrivals were Broadlane and MetAssets. What would you say, set you apart from the early startup big guys?
Speaker 2:Well, it's interesting, when MetAssets acquired Broadlane, one of the things that Broadlane told us, they were trying to figure out why we were so successful and it was truly that we had servant leadership. But we put the customer at the top of the organizational chart and John believed that and I wholeheartedly did, and it would come out and work out right if we did that. But the other thing was they thought it was the BlackBerry because we were the first ones to have BlackBerrys, and what they missed was it wasn't the BlackBerry, it was the willpower. I actually had an employee who came from one of the legacy GPOs you mentioned who said, geez, I want to resign. He said, why is that? He says, well, I don't expect me to answer calls from a customer in Saturday.
Speaker 2:This is not the culture I came from and you know, I guess we always thought, geez, if somebody's having a problem, their water line brings breaks in their ors, they need, they need a friend to call right, phone a friend, and we might not have the answer, but we got the passion, the commitment to go find it. So I really do think that was kind of the difference, uh, for us and uh, you know, and obviously john bartis was an incredible personality. I was always the guy with the shovel walking behind the elephant in the parade. Okay, so yeah.
Speaker 1:I don't. I don't think that's quite true, but John Bardas is a remarkable guy, that's that's for sure. But so are you. Um, we're this. You. You've hit on one of the two things I wanted to talk about in this discussion, and we're going to get to that at the end. And this is a point that I think all young people, anybody who is serious about having a legitimately important and successful, fulfilling career, needs to learn, and that is how you connect with people and how you follow up with people. We're going to get back to that. But the other thing that I think a lot of people that really don't understand health care. They use terms in a cavalier fashion. The term that is overused, I think now is GPO. I don't think there are any GPOs left. I would ask you to please tell me how you would characterize Vizient, what you would call it, how you would tell me an elevator speech about what Vizient is and what it does.
Speaker 2:We do three things. We help hospitals lower cost, improve their quality. As you know, fred, cost and quality are really tied. If you have poor quality, it increased costs and we help them grow their market share. How we do that is we are a performance improvement company based upon data and analytics. So we have invested major in the data and analytics front to really analyze all parts of hospital operations labor, supply chain, the interconnectivity of it, how it ties to quality and from that really gain insights.
Speaker 2:To be able to do that, I think I'll tell one little story about Vizient. We had a really large IDN call me up and said hey, we're going to fire you. We're going to hire one of these big consulting firms. We're going to bid everything out and, luckily for me, the lead practice from the consulting firm came in and said can I have all the Vizient data? Yeah, and the CEO said yeah. He said you can, would you just mind stepping outside for a minute?
Speaker 2:And he called me back. He said you have all our data and I said I sure do. He said well, I guess I'm not going to fire you then. So I think that's our goal right, because we have the data where we want to be the first call for their solutions, to help them on what they deem is important, and each one of my team members now has the strategic plan of the provider, and then we develop a tactical operating plan based upon cost, quality and market growth that meets their needs. And we're down to five sales reps and one sales leader. So this is all about servant leadership and account management.
Speaker 1:Wow, that's an entirely different model than when I know you remember this, but many people don't realize that the GPOs got their spurt in growth because American hospital supply was going to merge with Hospital Corporation of America and they would have more data capabilities than any other organization in the country and it scared the crap out of everybody. So that's when the GPO started getting their growth. Vha, premier and all those folks so you guys back there at American Hospital Supply were part of the reason for the growth of the GPOs.
Speaker 2:Is that correct? That's correct. You know, fred, when I was at American hospital supply, they announced that April 1st you know, like you remember where you were when John F Kennedy was shot. You remember when 9-11 happened, right, I remember that because it was April 1st. Okay, I thought it was a joke. I was at Bismarck, north Dakota, staying with one of my sales reps because, you know, we didn't, you know you couldn't afford hotels and stuff back then, you know, and it was kind of our policy. And he said he turned on the news and said look at the local news here they're saying America is is being bought by Baxter and HCA. I said, oh my gosh, and the name of the company I think was CureOn, if I remember right. I actually have a hat. What a disaster that was. And you know, you're right, it certainly spurred a lot of things and you know, backstreet ended up buying American Hospital Supply and HCA got a massive check for a breakup deal.
Speaker 1:So everybody wanted that, except for American Hospital Supply, and they used our cash to do it. There you go. So what is tell me about your current role as the Chief Customer Officer? I think it's a very appropriate title for you and we'll get into more about that later, but tell me about it.
Speaker 2:You know I love it. I'm accountable for really everything that touches the customer Customer satisfaction, any financial commitments we make to the customer, all the service to the customer and having one point of contact for everything that we do. So my team really is the first call and so that team will have a member engagement team working for them. So they'll have someone that is a spend lead. We used to say supply chain right, but now we call it spend right and they're looking at all costs, everything right and they're working for that supply chain leader. And we have a pharmacy lead that works for the pharmacy leader. And we have an ops and quality data scientist geek right, we call them something nice like a manager, but they're into the data and they can get things and they can tell you how patient X came through and why their quality was off and things like that.
Speaker 2:And then we do a lot with lost revenue where you know so many patients become sicker because they don't take their meds, they don't follow up for their visits, they don't eat right. So being able to help grow and have solutions for social determinants of health and market growth. But the customer would like one throat to choke and one person to talk to. So that's what my team does. So I always say if it works, call me. If it doesn't work, then I'll tell you who to call.
Speaker 1:I just have to write that one down Every now and then something comes up that I've never heard before. But one throat to choke is about the best.
Speaker 2:I thought that might appeal to you. Of all people Seems to me, I'd be on the other side of the desk when that happened, but never with me, though We've all.
Speaker 1:we've never had a problem. So what changes have you seen over the years in the caliber and preparation for supply chain leaders? I remember when I started, all we had to do was be smart enough to show the trucks how to get to the dock and push the boxes into the warehouse and then push the stuff upstairs to where it was going to be used. Because we used the GPOs for contracting for our commodities and we used the distributor for our transportation logistics, we didn't have to be that smart. We got a lot better prepared folks coming out. These days, what do you see?
Speaker 2:Oh, fred, you're absolutely right. You know, when I was a young operations manager with American Hospital Supply and supporting the sales reps, I could find any supply chain department, any materials management department. Just go to the dumpster, right, and that's where their office was. And you know that has elevated so much. Now there's so many senior supply chain executives that you know they're on the president's or the chief operating officer, cfos or the CEO's direct report team and they're, you know, executives, you think about it.
Speaker 2:Non-labor spend and many supply chain executives are graduating from supply chain to all non-labor spend. It's a huge deal for the hospitals, right, right, and the awareness and the pressures and you know it's clear that you know we have inflation going up, labor prices are going up. The insurance companies are not, you know, giving rate increases. You know Medicare Advantage just did a rate cut. It's just all these pressures. They got to come back to supply chain for cuts. So that position has been elevated in so many places and I could name names. I'd probably get in trouble, you know.
Speaker 2:But where that supply chain executive has to really understand total hospital operations and how to totally impact non-labor spend, I think it's fantastic for the industry, you know. And what an involvement. And if you look at mature, you know finely tuned, other industries that have that the supply chain executive is not a, you know, down by the dumpster, they're in the C-suite, you know they're making the impact and they say hey, fred, what do you think about this right? What are the implications? We're going to do this massive outreach and we're going to do a hospital and a home, but before we do it, maybe we should just see how the logistics are going to work right, so there's an equal seat at the table. So I think it's wonderful. It's one of the reasons I'm still engaged. It's such a learning environment in the supply chain and it's exciting to see how it's going to change going forward.
Speaker 1:Well, and you certainly have maintained your enthusiasm, rand, that's for sure, and I can't imagine you without it. So here's the second point. And for all of you young folks out there, or even you folks that are older, rand made a point a minute or so ago that really resonated with me. I get really ticked off when folks won't return my calls, when folks won't return an email message. Now I know I'm not any big deal, but if I want to talk to someone I think it's just common courtesy to get back to people. A while ago I think it was Mark Van Sumeren, I don't know if it was or not, but I'm going to. I will attribute it to Mark Van Sumren. He said, fred, between you and Rand Ballard, you know everybody in healthcare. And I said that's true, we do, cause I know 1% and Rand knows 99% of those people and the other part of that is a couple of weeks ago, on a Sunday night.
Speaker 1:The other part of that is a couple of weeks ago on a Sunday night, I was trying to do a favor for a friend, and it's Sunday night at nine something. I sent an email to you and said I have, I have a request and a couple of requests and introduction. One was the introduction to the person. The other was request that you see if perhaps that person may not be able to find something at Vizient. And the second thing was that I'd like you to be on my podcast. That was like at 9.15. I swear to God, by 9.20, I had a response from you, and by 9.30, you'd not only responded to me, you'd followed up with the person that I referred you to.
Speaker 1:You're an important dude. I mean, you have legitimate gravitas. In this industry. There are very few people more important than you, and on a Sunday night at nine o'clock you get back to me, and you've done that not just to me, I have no ego about this. I know that you do that to everybody. So the point that I'd like you to talk about is how do you build friendships and relationships instead of networks, because I think networks are artificial. I think friendships and relationships are real. Talk about that, rand, please.
Speaker 2:Well, first off, fred, you're absolutely right Friendships and relationships are real and networks are artificial. I totally agree that I have asked my team for a set of core values and, with that, a set of things that we all have to do, and one of them is be responsive, be respectful, return the call Heck, even if it's returning the call and saying, listen, you know you're not qualified for that position, but thank you, right, I appreciate you very much. Right, but there might be something here that's going to come up in two months. We can help you or whatever you know. And, by the way, it looks like your person's very qualified. So it's. You know, they've got interviews and hopefully that works out. But you know, I believe that that is the value where it's happened, and it's so many times. I do things for customers and they're very grateful and I think that develops a friendship. But it's vice versa. There are so many customers, so many people, that I have asked them to do something.
Speaker 2:We had an issue with a supplier who wouldn't give us very good pricing. They got a 98% market share. We canceled the agreement. We just, in good faith, couldn't be part of passing on this price increase and it was a very difficult situation for us and over 30% of our large IDNs moved the business right to the 2% market share and that made a difference. Right, they didn't have to do that. Right, it was a lot of work for small savings.
Speaker 2:But it also comes a time when you have to have competition and you have to do the right thing, and I'll be. I mean, I remember every one of those discussions, you know, and I tell you I will go to bat for those customers over and over again because they did the right thing, they saved their hospital a little money and that supplier came back with fair pricing for it. You know, and that's why it's always a two-way street and I think that builds friendship. And clearly, you know, we all have stories through COVID and the supply chain disruption. And you know all the things, things, amazing things that so many people did to make sure that we didn't cancel surgeries and people were safe. In a way, it kind of brought the supply chain a lot closer together. You know, right, um and uh, you know, and also during that time, hospitals had good will and good public opinion. Interestingly, that's gone now, you know, it's gone at the hospital level, you know, and I just think it's sad, and so we. I know it's going to happen again.
Speaker 1:We got to be prepared, and I think that's what it's about is just being prepared and doing the right thing well, I don't, you don't know this, because before I tell you this, could you tell me why you're not on LinkedIn?
Speaker 2:Well, you know, I I figured that my I have like 15,000 people in the providers and my contacts, okay, and I'm afraid if I was on LinkedIn or Instagram or Facebook or something like that, I couldn't keep up. I really, I really think it would be. And then I also, you know, really can't control who reaches out to me, and maybe I'm old school or whatever. I'm pretty sure I'm the only senior executive at Vizient, that's not, but I think it would be hard for me to keep up with all that stuff and I would hate for someone that I, you know, I think that's all I would be doing, fred.
Speaker 1:Yeah, it could be. Yeah, so that's the reason I'm not. Well, just as an FYI, I wrote an article about you on LinkedIn and I've written a lot of articles. I've got a podcast or a blog called Old Dogs and Box Kickers and it gets a lot of reads and I'm very happy with it. I wrote one article a few years ago that got over 200 000 reads.
Speaker 1:But the second largest response, with almost 20 000 reads to date, is the one I wrote about you and you should have seen the, the compliments that your peers in this industry gave you. Uh, and you'll never see him because because you're not on LinkedIn, but it was amazing. It was amazing. It just went just like that. Uh, and, and it's because you put other people at the highest level of respect and you give them response immediately. So I appreciate you ran, it's it's glad, it's great to have you on the show. Final thing is a free throw. Tell us what I didn't ask about or what's on your mind that you'd like to talk about, that you'd like to put out there for the last couple of minutes here.
Speaker 2:Well, I'm an eternal optimist. I think the Cubs are going to win the World Series again. Fred, and I would say in the supply chain, I'm an eternal optimist that we will continue to evolve, learn and adapt and that the true professional supply chain leaders will become the integral C-suite component that we talked about. I think it has to be that way and I think the industry will change where that's the norm, not the exception. And, by the way, I want to keep learning, so I'm not going to retire. For those of you thinking I'm going to retire in a couple of weeks, it's not going to happen. I got a new contract. I'm not going to say for how long, but it looks like they're going to keep me around for a bit going to keep me around for a bit.
Speaker 1:Well, I I can't imagine that they wouldn't uh. Sort of a last question do you still party as hardy as you used to at all the uh, at all the events that you're representing the company with?
Speaker 2:well, since you're a good, uh, before we got on, you were quoting willie nelson. Right, yeah, and what's that song? Um, I'm not as good as I used to used to be I'm not as good as I ever was, but I was good.
Speaker 1:I'm not as good as not. I'm not as good as I ever was, but I'm as good. I'm not as good. I'm not as good as I once was, but I'm as good once as I ever was.
Speaker 2:That's what it is. That's exactly right. So that's my answer to that. That's my answer to that.
Speaker 1:Well, rand, it has been a real, real pleasure having you as a guest on Taking the Supply Chain Pulse. If you have any folks that are busy or any folks that are out there that you interact with that you think would be a good interview for me. Shoot me the names, because I don't want to limit this to just the big-time leaders. I'd like to get some regular folks that serve key roles in here. We want to give people that don't get to attend the meetings and stuff a chance to experience and meet folks like you, rand, and once again, I'm so glad that I've known you for so long. I'm so glad you're my friend. I appreciate you being on the podcast, thank you.
Speaker 2:Brad, thank you.
