In this environment, hospitals and other providers are looking to cut costs wherever they can. GHX, a cloud-based supply chain management software company, aims to help both providers and their suppliers find inefficiencies and wasted costs in the supply chain. While GHX has been around since 2000, Johnson says there has never been a more opportune time for the company.
“[The shift to value] has really put a premium on the cost quality equation, meaning hospitals are looking at how do they take cost out, but do that in a way that’s going to continue to drive outcome and quality for the patients,” says Johnson, who became CEO of GHX in 2007. He adds that this trend has also evolved where care encounters take place, with more encounters increasingly being done outside the four walls of a hospital—which is where the cloud element of GHX comes into play.
“We have millions and millions of transactions that we’re helping to automate. That’s something we’re leveraging that to help provide information for the customers to help them make better business decisions.”
Johnson spoke with Chief Executive about how investments into technology aren’t something hospital CEOs should scoff at and how his leadership style has evolved over the course of his 12-year reign as CEO. Below are excerpts from that conversation.
What are some of the big challenges that GHX faces in 2019?
We are seeing the challenge of a constrained IT resources at the hospital. That’s one of the challenges where we’re looking to get our solutions implemented. The more simplified we can make those implementations, the better for our customers. We’re growing significantly, so we’re competing in a talent pool for some of the best talents in our locations in North America and Europe. That’s one we embrace. We think we’ve got a very attractive mission and purpose, as well as a great culture.
Finally, it’s looking at how do we continue to innovate. That’s something that our employees embrace. It’s one of our values. That’s about trying to create the right environments and leveraging that new cloud-based technology to allow us to get there faster.
In some of the conversations you’re having with hospital CEOs in terms of making big investments into healthcare technology…how do you get them to buy in and understand the ROI?
When I’m talking with a hospital CEO, I can point to the fact that we’ve documented over $8 billion of hard savings that we’ve been able to generate because of the automation, accuracy and efficiency [of our system]. It comes from eliminating manual processes with errors that are associated with it. The second piece when I’m talking with a CEO of a hospital, the number one cost is their personnel, but their second biggest category and the lever that is the one that we can help with, around their medical supplies.
They’re really looking at this shift in the care setting…that’s a key thing for them, as well as the shift to the new payment system. So we’re bringing them a solution that helps them address that need for the outcomes data, by [integrating] supply chain data into their electronic medical records. We’ve created a way to tie in supply chain data with clinical information, so clinical practitioners can be focused on patient care and they’re not trying to look up information on [supplies]. When they use a scanner [on medications and supplies], it’s actually in their system and it’s flowing into their health record. So those are some of the things I talk to the CEO about.
How has your leadership evolved in your 12-year career?
When I first became a CEO, my background was more on the operations side, so probably my comfort zone was really more about the operational details. I think over time I’ve seen my view evolved to where I’m empowering the employees more and focusing more of my time on strategic activities and really energizing the employees. This mentality is allowing our team to grow. It’s also allowing us to execute and deliver at a much higher level. It sounds obvious when you say it out loud, but it’s something that when you’re going through it again, each person has different strengths. And that’s been my personal journey.
What’s your advice to CEOs?
The investment that you’re putting into culture and how you develop your people is probably the most important thing you can do as CEO. Make sure you train your teams on how they can be more effective and how you can take barriers out of their way. It’s all about finding that right balance of having the metrics to ensure you’re getting the right level of accountability, but having the speed and agility to move in today’s competitive environment.