The Value of Direct Supply® Procurement Services

Direct Supply® Procurement Services (DSPS) has a deep knowledge of healthcare and senior living experience. We’ve helped our customers with inflation, managing supply chain issues, and training. When DSPS steps in to help relieve some of those pain points, there’s a difference. 

With our patented AI technology and dedicated procurement services team, we transform procurement services into a strategic advantage, saving our providers at least 10% every year. Time savings are also optimized with a dedicated team helping to reduce labor costs and lessening the burden of busywork.

We sat down with two of our subject matter experts who have had long careers in senior living: Eric Selvidge, Senior Spend Management Consultant and Spencer Beard, Spend Management Consultant for Direct Supply Procurement Services. Read on for our discussion on how DSPS sets itself apart.

How does Direct Supply Procurement Services set itself apart from an internal Procurement Department?

Spencer Beard: DSPS sets itself apart because of our scale and serving over 118 operators and 5,200 communities. Whereas a single operator may be limited to only their data, DSPS has access to billions of dollars worth of data, which in turn allows us to develop programs and find opportunities that a single operator may not be able to find. Additionally, DSPS has incorporated next generation tools like the patented OGM.AI™ platform. which mines terabytes of data, empowering our team to find the most cost-effective solutions for our customers.

As someone who previously handled procurement internally for a large organization, how can a new organization benefit from the types of services DSPS provides within procurement?

Eric Selvidge: When I worked with CarDon & Associates Inc. out of Indianapolis for about five years as both Director of Purchasing and Chief Procurement Officer, I knew that size and time in business impacted the procurement strategy. There wasn’t always enough hours in the day to accomplish all that we needed to accomplish. If facilities in the senior living space have a Director of Purchasing, they could be wearing numerous hats, performing scheduling duties and providing Accounts Payable services; they could be new in procurement. There is great value in understanding different needs of residents and caregivers as well as understanding how to navigate the healthcare supply chain. 

There could be a lot of things going on with a new organization, and that’s where DSPS could step in and be an extension of the procurement team to handle manual order guide management and other non-value adding tasks and allow the internal procurement team to focus on projects that directly impact the care of residents. 

Healthcare organizations that have an established purchasing department can still get value of DSPS through data. An internal purchasing department only has a narrow view of what their contracts and vendor relationships look like; they don’t have the breadth of data that DSPS has access to through the cutting-edge DSSI™ platform. We can look at procurement through a different lens compared to an internal team, so I think that’s where Direct Supply Procurement Services will stand out. We can step in and measure what they’re doing against best-in-class benchmarks or the industry averages, because we have access to all of that data. With that data, we can help them make strategic decisions. 

I experienced that myself. Doug Pickett [Vice President, Direct Supply Procurement Services] and I had a relationship for the last five years. It took me several years to become comfortable with the idea of having help. My biggest fear was the question of, “Would this service replace me?” That was so far from the truth. I needed help, and it was impossible for me to achieve everything we needed to do because of lack of time and resources. DSPS came in and allowed me to scale, which in return delivered more results and greater outcomes. I needed help to get contracts connected and other things that I didn’t have the time or horsepower for. With CarDon and Associates, that’s where I signed up for DSPS. I was losing track of price increases, discontinued items and product changes. That’s where DSPS was able to step in as a supplement to what I was doing.

What are some of the main benefits of the Direct Supply Procurement Services team?

SB: Tenure, knowledge diversity, geographical location, data sharing, and more! We have DSPS team members who have been with Direct Supply DSSI for decades. We have team members who have been in the post-acute care industry for years as nurses, CNAs, administrators, etc. We are not all located in one state or city. This allows us to understand what is going on in different parts of the country and quickly adapt when a need arises.

Additionally, with data sharing, our customers are tapped into a knowledge base that DSPS harnesses for the benefit of the operator. As someone who has significant tenure and experience in overseeing change management, this is a valuable bonus in the service that DSPS provides.

What are some of the guidance and resources we provide to customers?

SB: We provide national and localized data to measure against industry benchmarks. We link suppliers to providers in order to provide education on products, services, best-in-industry procedures, etc. We provide a new level of visibility into their spend across their organization, providing them actionable recommendations to deliver greater results.

ES: A lot of the audience we have, specifically in my role, are executives, whether it be a CFO, a COO (sometimes even a CEO), so their mindset is on one thousand different items, and they’re trying to run an organization from whatever seat they sit in. We provide official quarterly business reviews that give these individuals that glimpse of what’s going on at that moment and how the DSPS and internal procurement teams are adapting to changes in the healthcare procurement space. I think that’s why the executives appreciate it so much – they don’t have the ability or time to just track emails. It can’t just be a phone call every week or a monthly check-in. They want that presentation style (especially if they’re reporting to the board), so they can take it and show the rest of the team what’s being worked on.  

Explain how we Take Cost Out of Healthcare®.

SB: We reduce the cost by streamlining procedures using the Direct Supply DSSI platform, identify opportunities to reduce spend by optimizing their formularies to take advantage of their strategic supplier contracts and we provide visibility of purchasing behavior across their organization through our Spend Management reporting.  

ES: Driving the cost out of healthcare is really important now, especially with inflation. Food is a big part of what drives expenses up in long-term care communities and if there’s no one paying attention to that, this spend can have a huge impact on an operator’s bottom line. 

Anyone in a long-term care community can have five thousand different items on their order guide for food alone. That’s not an exaggeration – it’s likely an understatement. Think about the contracts and discontinued products that are changing daily; maybe a provider has to find another item, and maybe the item that they spend the most money on – we’ll call it bacon – maybe that SKU is not available, and they have to go find another bacon product. If they choose the wrong bacon, we’re talking $100k+ that could be impacting them. If someone’s not keeping their finger on the pulse of what’s happening, that’s where cost can get really out of control. 

That’s where we step in and help. We try to help customers prepare their yearly budgets and get them to understand what’s might happen with the healthcare supply chain. We can’t beat inflation – that’s not our job. But we can minimize the impact of inflation and better prepare our customers for the future.

How do we help providers save thousands each year?

SB: By sticking to our principles as an organization. We provide outrageous customer service by committing ourselves to quality, excellence and integrity. By doing these things, we are often seen as a team member of our customers’ organizations. When we can help our customers improve efficiencies, uncover savings opportunities, and help them scale, that all has a positive impact on their caregivers and their residents.  

ES: Again, it is our focus on fully utilizing the DSSI technology to drive efficiencies, using our proprietary artifical intelligence and next gen tools to optimize formularies and identifying change management opportunities through our Spend Management data. Additionally, we can help with that tailspend on contracted or purchased services. It’s that 20% that no one’s paying attention to: telecom, technology, waste management or insurance spend or all these other things that are outside of the procurement department and may fall within the risk or legal departments. We’re developing programs to mitigate this, because we have the team to do it. Providers and suppliers can take advantage of these programs as a DSPS customer to drive savings and overall visibility.

Interested in learning more? Read our case study about how the DSPS program puts process into procurement with artificial intelligence.

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