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.
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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
Unlocking Hospital Operations: Insights with Ted Rogalski on Strategic Leadership and Local Integration
We dive into the challenges and successes of critical access hospitals with Ted Rogalski, shedding light on their vital role in rural healthcare and the complexities of the supply chain in the industry. Ted shares insights into the operations, financial strategies, and the future of these hospitals within larger health systems while touching on the importance of community connections.
• Exploring Ted Rogalski's journey in healthcare supply chain management
• The critical role of supply chain in healthcare operations
• Differences between critical access hospitals and traditional healthcare systems
• The financial mechanisms that support these hospitals
• Importance of collaboration among critical access hospitals
• Integration challenges within larger health networks
• Future growth strategies for rural healthcare services
• Personal insights on family and community impact on professional life
Hi everyone, this is Megan Matos with St Onge Company, welcoming you to this week's episode of Taking the Supply Chain Pulse, where we chat with leaders from all areas of healthcare to discuss the issues of today's threats, challenges, emerging trends and advancing technologies. We're joined today by Ted Rogowski, the administrator of MercyOne, Genesis, Aledo Medical Center and Dewitt Hospital. His vast experience in the healthcare industry has landed him a spot for today's episode. So let's kick back, relax and get started with your host, the one and only Fred Kranz.
Speaker 3:I've known Ted for 25 years. I think Ted may have been my boss for a day and a half when I came to Genesis Medical Center. I think Ted was the acting supply chain leader. So, at least on paper, he was my boss for a while and I learned everything I don't know from him. So that's good. Fortunately for Ted, he learned nothing from me and because of that he's gone on to have a great career.
Speaker 3:Ted, thanks for joining us. Happy to have you here. Yeah, glad to be with you today, fred. Well, the reason I wanted to talk with Ted Ted has got an interesting history in the sense that he has been in a private community hospital, has been in a private community hospital, a small to medium IDN, has run a couple of critical access hospitals and, along the way, that medium-sized IDN was involved in a merger and acquisition from Trinity Health in Livonia, michigan, one of the nation's largest IDNs. So Ted has a unique experiential background. Let's go back to that time when you succeeded Afshin Fatholahi at Genesis as a supply chain leader. You were a young guy. How much did you know about supply chain before you took over the role, and what was it like to be in charge of that when you got jumped into multi-hospital campus and the whole deal.
Speaker 1:Yeah, great question, fred. You know very interesting story on that. From an operational standpoint I knew materials because that's how I started in health care. When I was finishing my undergrad and just looking for a job to get me through, I joined a predecessor organization to Genesis at the time it was called St Luke's Hospital and working in supplies, processing and distribution SPD is what it was called back then. So you know that was kind of you know the whole central supply storeroom as well as all of the instruments for the OR. So sterile supply and really had the opportunity to understand the operational piece of material services. And then after I moved on from St Luke's I went to the Twin Cities and worked in a large hospital there called Abbott Northwestern Hospital and it was a promotion up into multiple areas that you know materials covered but it wasn't a department, it was actually a department of the OR in that organization but it was all the components, it was SPD and sterile processing all of those. So you know, long answer to your question.
Speaker 1:I did have some aspect of it. Probably where I did not have good knowledge is just on the whole purchasing side. You know how do we negotiate and bring in all of the supplies that our organization uses and Afshin had built a great team and that was early, you know, in, I guess, the history of materials that really started getting sophisticated and working with physicians and really doing what we call value analysis and assessing, you know, not only the quality of what we're bringing in but the price, and that was just getting started at that time. So you know, the one thing that I loved about the job was the negotiation piece. I really liked that because I was a business major by background before I got into health care, so you know that really drew me into that role.
Speaker 3:Yeah, that's interesting. And one thing that Ashin did and I had done it places I had been before was Ashin brought in clinicians into the supply chain. It wasn't even called supply chain, it was still materials management. He brought in clinicians into materials management to work with the clinicians at the point of use, to understand what they did and how to best contract to meet their needs. Is that something that you learned, that you've taken with you along the way?
Speaker 1:Yes, absolutely and in fact I think, fred, that was a great learning opportunity for me, and especially when you look back at the start of that. Our relationships were completely separate. You know, if you will, all the positions were independent, none of them were employed. So you really had to build a strong, tight relationship and kind of, you know, get them at the table to say, hey, here's why it's best to advocate for you know, the hospital and the system as it relates to getting supplies in the organization. We can reinvest in, you know high technology to help support you in providing the best care.
Speaker 3:After supply chain, you went into imaging, and so it's interesting to me because I started out myself. My first director position was director of sterile processing and distribution we call it central processing and distribution of Baptist Same thing and I had like seven years, counting the military, of being a caregiver before I had one day's experience as a manager. And by the time I got to be a manager I learned how things worked, and it sounds to me like you know the fact that you went back into imaging by the time you got to be an administrator. You went back into imaging by the time you got to be an administrator. You had a similar experience of understanding how things worked within a medical center. What was that like when you graduated to become an interim hospital leader?
Speaker 1:No, I would totally agree with you on that, fred. I think it's something that set me apart early in my career in that I had that practical operational experience. Now I'm, I think, helped me, propel me to success, because I understood, you know, the challenges of our day-to-day staff and I never wanted to lose that as a leader and, you know, have that tight connection with them and say, hey, I walked in your shoes at one you know for a number of years in my life and so I understand what your day-to-day challenges are.
Speaker 3:Yeah, and the one thing I remember about you is both when I got there and you were the interim supply chain leader and afterwards, is you're always down to earth, face-to-face, always asking questions, wanting to learn more in a genuine way, and I think that probably has, you know, really helped support the growth of your career. What I want to get into, though and I wonder I don't know if you've listened to any of these podcasts, but I've had a lot of big-time supply chain leaders on from big-time systems, but I don't think too many people understand the difference between a critical access hospital and a traditional not-for-profit IDN or an academic medical center or whatever. And and we live in a time when many of these places are not only being merged and acquired but are sort of disappearing. And I live in Northeast Ohio now, and we've had places like Massillon Community Hospital and other places where places that were once the bulwark of a community where from the folks that live in that community have disappeared and become some name with Cleveland Clinic or university hospitals on it that is completely foreign to what the folks in that community thought.
Speaker 3:Tell us about critical access hospitals why they are operationally different and, as the president and board of trustees of the Illinois Critical Access Hospital Network. Of Trustees of the Illinois Critical Access Hospital Network. You're serving 14 million rural residents in your service area that otherwise might not have had healthcare access. Tell us about the importance of critical access hospital and how it operates financially, differently from a regular not-for-profit hospital or system.
Speaker 1:Yeah, a lot of aspects there. Let's start off with critical access. And what does it mean to be a critical access hospital? So Medicare and Medicaid view critical access hospital as safety net institutions for our rural communities and so, as a result, we're reimbursed differently. We're reimbursed on cost. So it's kind of like submitting your tax return. At the end of year we submit a cost report to Medicare and Medicaid. Now, some states are good on Medicaid, others are not, but Medicare will pay you your cost. So essentially what that means is you're going to break even right on those two services and that's 60 percent of our business.
Speaker 1:So really, where it's important for critical access hospitals to be successful is to make sure that they do have commercial business coming in to their facilities. You know and that's a big focus for me when we took over the Aledo operations that's a small community, it's 16,000 in population and we're right in the center of the county and we see bleed off around the county because they alluded to it earlier with Genesis mission and focus was we want to make that local institution as successful as we can provide enough services there. So when we took over Aledo, we grew services, we added a lot of stuff to what they were delivering to the community so people could get that care locally because they would have to travel 45 minutes. And a lot of you know my colleagues, some of them, their patients, have to travel twice that 90 minutes away to get care. So that's why you know it is so important for the fabric of our rural communities that you have that strong local healthcare institution. Not only can you provide that quality of care there, but also it typically is the number one or number two largest employer in the community. So the economic impact is so important and unfortunately and you brought it up there have been a lot of critical access hospitals that have closed and unfortunately those communities, those rural communities, start a downward spiral. You know when they lose a major employer like that and that ability to you know provide high quality care locally.
Speaker 1:So let's talk a little bit about you know the critical access hospital work network in Illinois. It's called ICANN for short. I've had the opportunity to work with that organization now for seven years, was the chairman last year, but you know it represents every single critical access hospital is a member of that organization and really you know it's about collaborating and learning from each other. What best practices can we deploy in our individual entities to continue to remain successful for the communities that we serve. Now a lot of Illinois critical access hospitals continue to be independent, you know.
Speaker 1:So I would say a third are tied to a larger, you know system organization. But two-thirds are still independent and unfortunately, after we got through COVID when we saw revenues increase and funding from the government helped sustain operations, we've seen a number of closures since then and I think you'll continue to see integration with larger systems. I can just speak about my own experience. For our organization it has brought a level of expertise that had we not affiliated and brought in that larger facility, I know our Aledo operation would be closed today. You know so we brought, you know, having the system resources of legal HR, you know finance to bring a level of sophistication or critical access hospitals, as long as they can understand the difference and that's a learning curve as well To me that's key to success.
Speaker 3:It's interesting because you were talking about Aledo being 16,000 people. Well, DeWitt's only 3,500. But DeWitt is almost like a suburb of the Quad Cities. So the DeWitt Hospital, while being important locally, so the DeWitt Hospital, while being important locally, did not have the same impact as the Aledo Hospital would have on its community as far as its relationship. Is that fair to say?
Speaker 1:Yes, you're exactly right. You know it is kind of a suburb of the Iowa Quad Cities, but the population here has grown, you know, to your point. It has kind of become a suburb. So we're up to 6,500 with the population and then our service area. It's about the same as Aledo but it's much more compact. You know we're about 10 miles around us. We have a number of smaller communities, so we care for about 14,000 people and they use their local services.
Speaker 3:The one thing I would say, though, that if I lived in DeWitt and there were no DeWitt Hospital, you know I'd just have to jump in the car and drive 17 miles to the Quad Cities and I'd be at a high level of care versus many critical access hospitals in the country where there is no care around, where they are the only care, and that's why, you know hence the word critical access. It's an appropriate name for what many of those folks in those places do. So what was it like for you to transition from, you know, a medium-sized IDN, where you were the biggest fish in the pond, to the I mean only having folks from Unity Health on the other side of the river to contend with to all of a sudden becoming one of 101. I mean 101 hospitals. I think my buddy Ed Hiscock tells me is what Trinity is comprised of. What was that transition like for you folks? You know it's very interesting.
Speaker 1:So March so just less than a month away will be two years since we've integrated into the Trinity health system. Now the way Trinity organizes their health system is by regional health ministries. So we actually came into Trinity under the regional health ministry of Mercy One, which is based in Des Moines. So Mercy One is a large operator within Iowa and now Western Illinois. With a couple of our Genesis entities, we're the number one provider of care in the state of Iowa and we're the second largest regional health ministry within Trinity. So that's good. You know it gets us some attention If we're not doing well unwanted attention. But you know, being the second largest part of that Trinity organization is important. The other thing is becoming part of MercyOne. They had 30 critical access hospitals, not all of them owned, we only have eight owned, but then we have 22 managed. Trinity had two critical access hospitals prior to the MercyOne Genesis organization joining them. So we've actually gotten some attention from Trinity and some support in that because, kudos to them, they recognize this is a different animal. You know critical access is reimbursed differently. We build differently and our rural health clinics that are tied to our hospitals are also, you know, different and so we're starting to build differently and our rural health clinics that are tied to our hospitals are also different, and so we're starting to build that.
Speaker 1:It's been a little slower than I thought it would be. I thought after a year we would be more integrated than we are today. We're just starting to reach that integration now, two years out, where now we just last 30 days we changed all of our HR systems, all of our finance systems to be part of that Trinity Mercy One umbrella. So that's been painful. You know a lot of change there and you know opportunities for new learning. But you know, I think as we move into the future we will continue that tighter integration. That was the one benefit that Genesis had. As a small regional system, we were so tightly integrated. We had one system support, you know, area for legal finance, hr, all of those areas. Materials was another one and they took care of all five hospitals. What we have found coming into MercyOne is that they're looking to what we have done within the Genesis organization to adopt those practices because they were very disparate before.
Speaker 3:Yeah, you know, that was one thing I was always amazed with too is when we introduced Lawson, for example, the way we integrated that system into our operation. It was, I mean, I thought it was just the way you're supposed to do it. And then, after I left Genesis and returned to consulting later, I found out how many systems had absolutely blown it and how well our folks had worked together through the process to make it work correctly. How has your, how has your role changed now that you're part of Trinity, if it's changed at all?
Speaker 1:You know I would say operationally it has not changed much. There's more bureaucracy, as you would expect coming into a larger organization. So you know where I had some independence to make some local decision making, whether you know it'd be spending, you know, different dollars to support causes locally that has to go up a chain of command. But from an operational standpoint and the relationships locally, I still have that ability to have that freedom and to interact with my team in that manner. So you know, I think the support eventually will get to a place where it's really good and will help us succeed in our operations. But you know it's still going to be a challenge and a path that we're going to have to go down.
Speaker 3:But you're pretty comfortable with the way things are going right. Yeah for the most part.
Speaker 1:You know, like I said, I hate bureaucracy. You know, because I like the one benefit of being in a critical access hospital is you can move pretty quick. You know you have a small team. It's myself and our CNO, that is the leadership team. You know the two individuals and then our management team under us and we can make decisions and move quick. Can't move as quick as we used to, you know, so it's just getting used to that and you know, having a good plan to take it forward and the rationale. And hey, here's why we what we need to do and where we need to grow.
Speaker 3:Well, how do you work with Trinity supply chain? Is there pretty much unchanged from what it used to be like at Genesis, or do you see any differences?
Speaker 1:You know there's a lot of change in that has moved to national, you know. So that is one thing that Trinity has done very well. Their supply chain is very and I think you mentioned Ed Hiscock earlier. Ed did a great job of integrating all of the entities across Trinity into that one service across the nation and you know I give him a lot of kudos in doing that. He was very transparent, he was very open. So you know, as Genesis was a new entity coming into this, our folks that ran our materials management departments- knew exactly what the plan was and they were much more integrated quicker, within a year of Genesis entering that.
Speaker 1:So they've been able to take we've been able to take advantage of that the national buying power that they deliver. And you know that was one of the reasons, one of the you know a couple reasons why we, as Genesis, wanted to join a larger institution. You know we wanted to take our cost of care down. We want to purchase things cheaper. The other thing was to lower our corporate overhead. Trinity does a great job of limiting their corporate overhead and just to kind of give you some rough numbers, when we were genesis, that tight five hospital system, our corporate overhead was about 28. Last year trinity ran at 16 yeah, multiple millions of dollars. And as we see, our margins shrink and things get tighter. That was why Genesis joined the larger system.
Speaker 3:Well, I tell you, if you have ever been, you probably haven't, but in Livonia, trinity used to have these two huge-ass buildings for supply chain and they only have one now and they have shrunk the operation to where it's leaner and far more productive than ever before. And you know, ed aside from also being my former boss one time we worked together for three years is one of the best supply chain leaders in the country, bar none. He is a great thinker, and you know those folks have to survive there. And you know, let's face it, they're from Michigan and there's a lot of disruption and dissonance there that they've had to survive just to still be there. So that's good. So what does the future look like for Ted Rogowski and Mercy One?
Speaker 1:Well, the greatest thing and the thing that keeps me, you know, thriving is the focus on growth and access. That's our key strategic items. And to me I love it when I got here to DeWitt you know it's just been a couple years we've been able to grow three of our services our PTOT, cardiac pulmonary rehab and our infusion services by over 30%. So that was just, it's just fun to be in that mode of growth and focused on, you know, not shrinking but growing the organization and really, you know, increasing our access. So that's really our focus on our clinic operations. And the other thing that I did when I came to DeWitt something that we did in Aledo a long time ago is we had two individual physician practices that we brought in under the hospital umbrella as departments of the hospital and running them as rural health clinics, and that gets us access to 340B.
Speaker 3:So those are kind of the keys to our success and we'll just continue to focus on that growth and, you know, kind of fine-tuning that operation ted, it's been great talking with you and, uh, before we go, two things number one uh, what did I forget to ask about that you'd like to talk about? And number two I understand you passed the golf clubs I've given you on to your wife. Is that true that?
Speaker 1:is true. Yeah, she loved that driver.
Speaker 3:Anything I missed that you'd like to?
Speaker 1:add. The only thing I would add is hey, what do you do outside of work? And we've been blessed. We have five children. They've all married great spouses. So with the ten of them, they've now blessed us with grandchildren. Our seventh one will be born here within the next couple weeks. It'll be our second granddaughter out of the seven and they range in age from three and a half down to like six months. So we love bopping around and seeing all the grandkids and really enjoying that part.
Speaker 3:And really enjoying that partnership. Well, you know I've accused you on our last telephone conversation of taking your high school graduation picture and using it on the website for MercyOne. But you know you have done. You're still to me, you're that young guy that I met back in 2000,. Okay, and you're still looking great. You're doing a great job and I am certain that your future is going to be great with the Trinity organization. You're what they need. You've got a unique skill set about a type of organization that they really didn't have much experience in, and I think that will stand you in good standing as you go along. So I think things are going to look good for you. Ted, thanks so much for being on Happy to have had you here.
Speaker 1:It was good to see you, Fred, and happy to be with you to this point.
Speaker 2:And that concludes this episode of Taking the Supply Chain Pulse. Subscribe and connect with us online to access other episodes you may have missed. If you'd like to be a guest on the show or have a topic you want us to explore, please reach out to Fred directly at fcrans at stongecom, f-c-r-a-n-s at S-T-O-N-G-E dot com. This is Megan, thanking you for listening and we'll see you next time.
