Healthcare adapting to rapid change - Workday customers speak about their pandemic experiences

Given the enormous challenges healthcare organizations have faced in the throes of the pandemic, those that had already started on their digital transformation have some interesting stories to tell about their technology journeys. They are now carrying forward their learnings from these times into future practice. As healthcare is one of the industries Workday has been targeting for some time now, the cloud HCM and finance vendor recently had some of its customers talking about their experiences. Bon Secours Mercy Health told me about how the hospital group has sharpened its supply chain management, while ChristianaCare spoke about its use of planning to stay in control of its finances at a time of fast-moving change.

One recurring theme has been the importance of having up-to-date information and analytics to have a measure of current challenges and to be able to map out courses of action. Bon Secours Mercy Health is a $10 billion a year not-for-profit healthcare organization which operates 50 hospitals across seven eastern US states as well as in Ireland. Dan Hurry, its Chief Supply Chain Officer, comments:

The quicker, cleaner, crisper, we can get data, the better decisions we can make.

After rolling out Workday supply chain management, HCM and finance in the past two years, there's now a much clearer overview of what's happening across the organization. Hurry says:

It starts to create a lot more opportunity for these different teams to collaborate and have access to the same data set and for the executives to see really kind of what the big picture looks like in their healthcare organization in real time.

Proactive procurement at Bon Secours Mercy Health

In supply chain specifically, the digital solution is allowing the procurement function to become more proactive in how it manages ordering and inventory. The merger of Bon Secours and Mercy Health two years ago had brought together disparate ERP systems. The roll-out of Workday across the organization — in the throes of the pandemic — was completed by November last year. Previously, the digital tools were reflecting what had already physically happened. Now they can take a leading role in shaping what happens, as Hurry explains:

The technology in Workday is now, let the digital actually pull the physical, and convert to a proactive supply chain. The technology allows us to do that — and there's some future developments in the pipeline that take it even further.

When you truly look at a best-in-class supply chain, your intelligence is actually going to draw the physical. In healthcare as an industry, [in the past] it's actually been a little bit tilted more towards a reactive supply chain.

Other key aspects of the modernization include mobility and integration. The much improved user experience is a "change maker," says Hurry, with support for mobile devices that is far ahead of what was in use before. Connectivity with suppliers provides much more upstream visibility than before, when connections were largely internal. Now procurement can connect with suppliers, such as surgical implant providers, and based on the supply position can schedule cases for treatment accordingly. The final element that's much changed is the analytics. Hurry comments:

The insights that we draw out of the technology allows us to look at things a little bit differently. The way we can ... slice and dice all the data to make management decisions and how we move, is certainly more enhanced than what we've had in the past.

Agile planning at ChristianaCare

At ChristianaCare, a not-for-profit hospital network serving the US state of Delaware and neighboring districts with annual revenue of $2.5 billion, the onset of the pandemic brought significant financial pressure. The price of masks, gloves and other PPE rocketed even as usage soared, at the same time as elective surgeries were canceled, reducing income. There was a risk of interruption to cashflow due to potential staff absences in the billings function or shutdowns at insurance companies. At the same time, the organization's leadership made the call that it would continue to pay staff in full rather than lay off or furlough them. It also undertook to pay for childcare and hotel accommodation so that frontline medical staff wouldn't face the risk of taking infection home to their families. CFO Rob McMurray needed accurate financial planning and analysis to be able to assess all of these various metrics and map the right course. Fortunately, the organization was no longer relying on spreadsheets for financial analysis, as had been the case in previous years. He comments:

Thank goodness we did what we did with Workday Financials and bringing in Adaptive Planning, because suddenly we were in the middle of something where — just to survive and make the right decisions for our people — we had to be able to think fast and scenario plan, and we had the tools at our disposal to do that.

That agility in planning allowed ChristianaCare to stick to its decision to maintain take-home pay and protect its community. McMurray continues:

We were able to do it because we had the flexibility to model out, not just a handful of scenarios, but dozens and dozens of scenarios. And we updated the scenarios every week with internal information, every week with assumptions modelling the COVID disease progression, and also information around the economy that we were getting from external sources.

Being able to bring that information right to the table, we had to make some serious decisions about how how we're going to get through this and are we going to impact people's financial health? We didn't have to make any of those difficult decisions because we had that information on our hands.

That experience now informs how the organization will develop its strategy going forward. He concludes:

We can now take that same approach with that scenario capability and really build strategically informed, long-range forecasts that we just couldn't do before.

Healthcare business recalibrates

At other institutions, the pandemic has accelerated trends that are disrupting historic norms in expenditure and income, says Indy Bains, VP of Industry Solution Marketing at Workday. For example, organizations have been seeing a greater percentage of their staff coming from short-term contracts, which changes the cost structure of labor costs. Usage of telehealth has suddenly grown rapidly, but reimbursement rates for remote consultations tend to be lower than in-person sessions, even though the practitioner's pay rate is unchanged. It's useful to be able to track all of these changing metrics in a single platform across workforce planning, financials and spend, as he explains:

What we see is that organizations are needing to recalibrate their business. Being able to recalibrate when you have a single source of truth across all of these areas makes it a lot easier.

We see organizations really doing more scenario planning and forecasting — we have one customer who increased their scenario planning and forecasting by 10x. They saw the need to look at things like PPE as a key variable in [whether] they would have enough essential staff available? What if x percentage was not available?

All of these variables, I think, really speak to the fact that healthcare organisations are managing cost pressures, they're managing workforce trends, they're managing dynamics of the supply chain, and to be able to do that on one enterprise platform that gives you the data and gives you the unified view of that business, it makes it easier.

At Bon Secours Mercy Health, the decision to settle on Workday for supply chain management was taken at a time when the vendor was, as Hurry admits, not known as a player in the healthcare supply chain. It had the core functionality for procure-to-pay and related operations, but what was important to the procurement team was the opportunity to influence development of the product offering to help meet some of their future goals. The organization is now starting to see benefits in terms of consolidating procurement and the associated logistics, streamlining invoicing, and managing throughput more efficiently. This is where the bet on Workday has paid off, as Hurry explains:

It's one thing to gain better insights on your traditional movement, how you move commodities and whatnot. There's only so much you can do with that. We're really looking at more the bigger fish of opportunities we see there.

My take

Healthcare has become a strong sector for Workday as it develops its industry-specific strategy. The supply chain management offering has been specifically developed for healthcare, targeting the opportunity to bring greater efficiency through more of an end-to-end view of supply chain processes and metrics. Platform integration across financials, HCM and planning is also starting to prove its worth in some of these large early customers, reinforced by their experiences during the pandemic in adapting to rapid and unexpected change.