Author: Katie Corcoran
An academic medical center and health system had a fragmented current state of Courier Services, with a mix of multiple external providers and internal staff. Pathstone partnered with the organization with a goal to reduce total courier spend through pricing and utilization while maintaining high quality services.
Pathstone set out with 4 primary guiding questions:
To answer these questions, Pathstone’s non-clinical purchase service consultants collected data from both the external suppliers and internal teams to develop a comprehensive picture of the current state. External data included detailed route information, on-demand call volumes, and associated costs. Internal data components included labor costs (salary and benefits/overhead) and non-labor costs (e.g. vehicles, maintenance, fuel).
Pathstone found the internal couriers did not have the infrastructure, such as GPS tracking, to be as effective as external providers and capital holds limited ability to acquire new vehicles, resulting in running through to end of life.
Ultimately, the team decided to move forward with a competitive request for proposal (RFP) process for all courier services activities. Development of the RFP required understanding the materials being transported to ensure vendors have the appropriate qualifications. For example, Department of Transportation certification is needed if couriers are used to transfer hazardous materials.
Supplier RFP responses were evaluated based on vendor qualifications, compliance with bid requirements, service level agreement (SLA) proposals, and financial proposals/route configurations.
The supplier proposals led to strategic discussions around the optimal mix of STAT/On-Demand calls versus scheduled routes to manage end user needs and appropriate expectations for the services offered by the courier program.
One incumbent external supplier presented the strongest overall proposal and end users confirmed their satisfaction with their services in the past. This supplier was selected to serve as the primary supplier, with all other external business and a portion of internal business to be transitioned under their support.
Pathstone also learned this was an area in which end users were leveraging courier services for an enhanced scope of activities, such as running to the local grocery store to pick up cakes for employee birthdays. While this may not be traditional, it was deemed important to the client team for the initial transition phase and kept within scope to maintain that supportive culture. The client opted to retain a subset of internal resources to complete these more niche on-demand activities. The remaining internal resources were able to be reassigned to other internal operational activities.
The final configuration of internal and external resources and scheduled routes versus on-demand services resulted in a 22% overall reduction in cost while maintaining high-service levels.
This article was authored by Katie Corcoran. Katie is a manager with expertise in delivering performance improvement and non-labor cost reduction services for healthcare providers, including large integrated delivery networks and academic medical centers. She has driven value by partnering with 30+ hospitals across the United States in areas such as clinical purchased services, finance and administration, transportation, and facilities.