Thursday, December 14, 2023

Opining on the "Top."

In the past few days there have been multiple posts in my LinkedIn time line by health care systems celebrating their inclusion in the "Gartner Healthcare Supply Chain Top 25 for 2023."

About five months previously Gartner had a post related to their changing their measurement methodology for this recognition by adding an ESG (environmental, social, and governance) component. At the time I took a quick look at their methodology, and was surprised to find that it did not seem to include any supply chain related KPIs. I commented on the entry, but it did not receive any response at that time and I forgot all about it.

Seeing all the recent entries on this topic reminded me of this, so I went back to view the methodology that was used to come up with the "Top 25" list:

The various components included:
  • Alignment to Quality of Patient Care (20%): This is listed as being based on IBM Watson Health Top 15 Health Systems Study. Further search on Merative (Watson Health had been divested by IBM in 2022 and spun-off to a private equity firm, Francisco Partners, that renamed the company Merative) indicated that the measures used here included: risk-adjusted inpatient mortality, risk-adjusted complications, healthcare associated infections, 30-day mortality, 30-day readmissions, severity-adjusted length of stay, Medicare spending per beneficiary, adjusted inpatient expense per discharge, and overall HCAHPS patient rating.
  • Financial Performance (15%): Here they used S&P bond rating as a proxy.
  • Alignment to Environmental, Social, and Governance (5%): This was measured by the organization belonging to the Healthcare Anchor Network ("a growing nation collaboration of 70+ leading healthcare systems building more inclusive and sustainable local economies"), providing supplier diversity data to the HAN, and signing the HAN Purchasing Impact Commitment. A set of laudable goals no doubt, but not really any measurable results to demonstrate leadership in any ESG areas of focus!
  • Community Opinion (60%): 30% each from a 'Gartner analyst panel' and a 'Peer panel.'

Now while supply chain will have some impact on most of the actual measures used that are listed above and account for 35% of the ranking ratings, these are rather indirect measures of supply chain effectiveness, efficiency, and impact to the organization. Using this logic these measures could as well be used to rank the healthcare systems by their revenue cycle, by clinical staffing, or by a whole host of other inputs!

Additionally, odd for a supply chain ranking, no supply chain-specific measures or KPIs are included. For example none of the twenty-nine 'Health Care Supply Chain Metrics and KPI's' listed by AHRMM are used.

What is left? 60% Opinion. Even if this opinion is all qualified as "expert" (which would seem to be a stretch), it it still opinion! And this is not the strongest foundation to build on; for example it would seem to me to have an inherent bias in favor of much larger systems!

OK, so there are numerous ratings systems in health care, for example the U.S. New and World Report annual ranking, the Leapfrog Group ranking, etc., etc. And, almost always, their methodologies usually start off on the rudimentary side before being 'beefed up' and further developed. Not the case here as this is Gartner's 15th annual listing!

So, who is hurt by this ranking? No one really, so it's not like this is the end of the world. And, truth be told, the organizations listed are all great organizations and they may well be doing amazing things in their supply chains! However, Gartner may be overlooking other (perhaps smaller) supply network exemplars that may be doing great work and should be lauded and emulated. And this ranking provides no benchmarks that others can use to improve themselves, unless of course they sign up as Gartner clients!

P.S. I hope I'm not being petty by pointing out that Gartner actually believes strongly in metrics and KPIs itself, apparently just not in this specific case.

P.P.S. Also odd given the inputs, the Composite Score runs to two decimals!

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