Pandemic fuels pivot to sustainable process innovations for Banner Health

Ask Doug Bowen, Vice President, Supply Chain Services, at Phoenix-based Banner Health about the foundational development and success of his award-winning team and he’ll attribute it to three process changes that have since become permanent: Migrating toward reusable products from disposables, moving toward local sourcing from global sourcing and shifting to a “more balanced scorecard” from cost savings as the department’s measure of success.

Bowen punctuates the decades-long industry debate about reusables versus disposables with data.

During the first pandemic surge in the Spring of 2020, Banner used an entire shipping container of disposable isolation gowns each week, which amounted to 1.3 million gowns per month. “We were at risk of running out, and we were determined to keep our customers, the caregivers, safe,” he stated. “So we migrated from disposable to reusable isolation gowns to reduce dependence on single-use, globally sourced products. The project focused on implementing reusable isolation gowns as a permanent solution to safely protect the caregivers while also being sustainable.”

In sourcing gowns and material, Banner faced a lack of product, long lead times and product quality not meeting the clinical attributes identified by the team. As a result, they sourced medical grade fabric and partnered with local fabricators to manufacture Banner’s gowns, according to Bowen. They also purchased ready-made gowns and altered them to Banner’s gown design to maintain consistency and customer trust.

“The reusable gown project team worked closely with end users to design and manufacture a product that met their specifications,” Bowen said. “Then they stayed in close contact with the first pilot site hospital end users and leadership to get more feedback. The early feedback was very positive. The nurses felt better protected. So we were thinking at that time that if the rollout to the rest of the hospitals was also positive, we could make this a permanent solution.

“Unprecedented high demand for isolation gowns during the surge highlighted the importance of a solution in a time where inability to provide protection to our caregivers was not an option,” he continued. “We saw the national news stories about the nurses in New York wearing trash bags and we were determined to avoid that situation. Pivoting from disposable to reusable provided a sustainable and long-term option. Caregivers acceptance and appreciation for the reusable gowns was shared openly and often with Supply Chain, Nursing Leaders and Senior Leaders. Feedback for Banner’s reusable gowns showed the caregivers felt more protected than the variety of disposable gown options they experienced in the past.”

Bowen acknowledges the skeptics who may say that switching to reusables and sustainability is just a cost shift from paying for disposables and waste because you have to invest in laundry operations and labor as well as price increases/surcharges for recycling and recycled products.

“I would encourage each decision-maker to evaluate the advantages of a reusable program,” he insisted. “Even if you break even or spend more at the beginning, the reusable solution provides community benefit – more business to your local laundry provider – and environmental responsibility – less waste to your local landfill. The reusable isolation gowns are higher quality, better protection for the caregivers, better for the environment and – in our experience – a better value than disposables.”

So far Banner Health uses 80% reusable isolation gowns and 20% disposable gowns, Bowen noted. “We have some hospitals outside of Arizona that do not have a laundry provider that can accommodate the reusable isolation gowns, so they remain with disposables,” he said. “Also, we have some areas with low volumes that remain with the disposable gowns. We keep a backup supply of both reusable and disposable isolation gowns.”

Bowen acknowledges the variability in dollar value between reusable and disposable gowns but appreciates the ROI they achieve. “The cost of disposable isolation gowns has moved up and down, while the cost per use of the reusables gowns has been steady,” he added. “Banner has experienced an average cost savings of 35% with the reusable isolation gowns.” In addition, the program extended Banner’s days-on-hand inventory to more than 90 days supply from a low of 10 days.

Local versus global sourcing also carries with it considerable volatility in terms of product access, availability, price and security, but the short-term gains can be extended to long-term returns by moving away from a “cost-savings” model exclusively, Bowen emphasizes.

“If the only measure of success for the supply chain is cost savings, the supply chain will likely continue to chase pennies around the globe,” he said. “However, if local sourcing, product access and availability, community benefit, agility and resiliency can be added as measures of success – along with cost savings – then the supply chain can succeed with a more balanced scorecard.”

Of course, convincing the C-suite to move away from cost savings as the definitive barometer of supply chain success can amount to a major hurdle in and of itself, Bowen recognizes. But he emphasizes one key word – balance.

“I think the key is to promote the additional measures of success along with cost savings to create a new, more balanced scorecard for the supply chain,” he asserted. “The additional measures can be added over time at deliberate speed to maintain efficient operations and be more effective by achieving the desired outcome of a more balanced supply chain scorecard.”

The pandemic motivated everyone – from the C-suite through Supply Chain Services through the entire organization – to expand thinking beyond the convenient, obvious and typical, Bowen adds.

“During the pandemic, there was no discussion about saving cost,” he insisted. “The discussion was all about saving lives. To save lives, we worked to find alternate solutions for products that were not available, and we focused on listening to and caring for our caregivers – and excelled at it. This experience opened our eyes to the need for a more balanced scorecard for supply chain. The journey to a more balanced scorecard is still in front of us. We will continue to promote a more balanced scorecard for supply chain, and it will take time to accomplish the transition.”

Investing in Prestige Ameritech

Providers investing in a supplier may be more of a rarity than reality but sometimes it may be a necessity.

Banner Health considered the idea back in first quarter 2020 and joined with Premier and 14 other Premier members to acquire a 20% minority stake in Prestige Ameritech, a company that supports domestic manufacturing of much-needed N95 and procedure masks at the time that they could acquire at “pre-COVID-19 rates, not [at] 10-times markups,” Bowen said. He declined to share a dollar figure expended by Banner or the entire group.

“We had extreme difficulties in buying enough N95 masks to meet the growing demand, so we began searching for solutions,” he said. Until that point, approximately 80% of Banner’s PPE products came from overseas, and the pandemic triggered widespread shortages.

“Banner’s Colorado hospitals were an early warning alarm, and they started surging in February,” Bowen recalled. “When we witnessed the high demand numbers for N95 masks at the Banner Colorado hospitals, we knew we were going to have difficulty buying enough N95 masks to meet the demand, so we immediately started searching for additional solutions. Premier heard the same call for help from Banner Health and from many other members. They quickly formed a task force and executed the Prestige Ameritech deal. This deal literally came to the rescue and saved the day.”

Convincing the C-suite of such an investment “fortunately, was easy,” according to Bowen.

“The C-Suite was given daily updates on the lack of availability of the N95 masks, and they were hearing about it on the national news,” he said. “The senior leadership was very supportive of this timely solution.”