Eighteen years on the payer side and another five in Cardinal Health’s Nuclear Pharmacy Services has given John Rademacher a different perspective on ambulatory care
With a background in finance, strategy consulting, process re-engineering and risk management, John Rademacher came to his current position in August 2012 as president, ambulatory care, Cardinal Health, with a unique set of skills. More than 18 years of experience with two payers – Amerisure and CIGNA – afford him and his company an advantage in meeting the needs of today’s and tomorrow’s customers. “I think these experiences will come into high value as the model changes, with accountable care organizations and capitated payment models, and really, with the way the healthcare ecosystem seems to be evolving.”
After graduating from Hillsdale College (Mich.) with a degree in accounting and finance, Rademacher joined Amerisure, a property and casualty insurance company serving the construction, manufacturing and healthcare industries. “I started as a management trainee, recruited out of undergrad,” he recalls. For three years, he rotated through various positions and departments, including safety and loss control, claims, finance and underwriting. “It was a fantastic opportunity to learn a 360-degree view of the business,” he says.
As he moved through the organization, he had the opportunity to focus on risk management and advanced risk-management techniques. For example, he helped create what those in the business call a “rent-a-captive” facility in Bermuda. In such arrangements, companies can transfer the risk of their self-insured portfolio to a facility in Bermuda. “It involves a lot of financial engineering and actuarial work, helping companies manage risk and find reinsurance techniques in the global market,” he says.
Ultimately, Rademacher – who earned an MBA in finance from Wayne State University while at Amerisure – was recruited by Deloitte Consulting to work in the firm’s financial services industry practice. Again, the job involved strategy development and process re-engineering, he says. In 2001, one of his clients – CIGNA – recruited him to work in its life and disability group insurance division. Later, he joined the company’s healthcare business. “When I left [in 2007], I was leading their medical management organization, that is, those areas focused around case management, the 24-hour nurse line, health coaches, wellness and disease management,” he says.
Nuclear Pharmacy Services
In 2007, Rademacher was recruited by Cardinal Health to serve as president of its Nuclear Pharmacy Services business. After the CIGNA experience, he could have joined another payer or provider. “But this was – honestly – something new,” he says. “It was a unique challenge with a great company, and I like learning new things.”
The Cardinal Health Nuclear Pharmacy Services business is the world’s largest provider of nuclear medicine – radiopharmaceuticals – for use in the diagnosis and treatment of disease, says Rademacher. Its largest product line is for cardiac imaging. “It’s a unique business, clinically driven,” he says. “I cannot express enough how fantastic it was to lead [Nuclear Pharmacy Services] for the time I was there. We are the world’s largest employer of nuclear pharmacists, with about 500 of them as part of the organization, so it was extremely clinically driven.”
The position offered some unique logistical challenges as well.
“Because of the short half-life of radioactive isotopes, it truly is the ultimate just-in-time supply chain,” he says. “We manufacture, compound and deliver [product] multiple times a day to hospitals, imaging centers, cardiology clinics and other sites, where they are injected into patients.” The challenge for Cardinal Health is to match the decay rate of the isotopes with the time the product will be used. With about 1,300 vehicles and 145 nuclear pharmacies across the United States, “it was an invigorating and challenging area, given supply disruptions, weather issues, and managing a captive fleet of trucks” he says. “It was really a Rubik’s Cube of supply chains.”
Large issues are at stake for the nuclear pharmacy team, he adds. “We make a difference in people’s lives. When you understand the value of a dose we deliver, helping physicians make accurate diagnoses, whether for cardiac conditions or cancer, or deploying products for the detection of Alzheimer’s Disease … it is really inspiring.” The group’s mantra – “Every dose matters” – keeps its mission front and center.
“It was a great experience. The team does a fantastic job.” They deal with volatile, radioactive materials, and special handling is required. Regulatory requirements are steep, and vigilance is called for. “And all this happens behind the scenes. Very few people think about the supply chain behind it.”
Ambulatory care
Rademacher’s current assignment – president of ambulatory care – presents its own set of challenges and opportunities.
“Healthcare is changing quickly,” he says. “Part of the responsibility I had moving into this role was to make certain I was helping drive the organization into a position in which we deliver and capture value, as the healthcare system continues to evolve. We’re developing a strategy – and tactics to support it – to make certain that we are delivering value to our customers through cost-effective and innovative solutions, and that we are positioning ourselves appropriately for inevitable change. Finally, we need to ensure that we’re delivering value to our shareholders in the way we organize and drive solutions.
“I have always believed that if you deliver exceptional customer service at exceptional value, earnings take care of themselves. We need to make certain we are in a position to do that, as the marketplace is changing, with many physician practices and IDNs re-examining and re-evaluating their position.”
Cardinal Health is seeing a greater linkage between its hospital customers and their owned physician practices, and the company is responding accordingly, says Rademacher.
“One area we’re focusing around is data and analytics,” he says. The challenge is to drive value for growing IDNs through supply chain efficiencies, assistance with formulary development and management, and assistance monitoring patients’ care on a longitudinal basis, that is, from the point of admission through discharge to post-acute and ultimately, to the home. Cardinal Health’s ability to do these things is something Rademacher considers to be of high value. Customers agree. “From the feedback we receive, this is something they seek and something they expect we will provide them. And it starts with informatics.”
Informatics can help IDN leaders identify what they spend on equipment and supplies, as well as opportunities to avoid costs, he says. Data can help them drive a more efficient care delivery model, rationalize their product portfolio, and drive transparency and efficiency through the supply chain. “They need a partner who is focused on helping them be more successful in the marketplace, given the challenges of reimbursement cuts, increased competition, and the government programs being imposed on them. That’s what we’re focused on.
“The ability for us to bring value-brands, to help them reduce the cost of products themselves, and to drive operating efficiencies is something Cardinal Health can bring both in its scale and resources. But it goes beyond that.
“I think we’re missing the boat if we’re not focusing on taking waste out of the ordering process and [implementing] systems that help practices be financially successful.” Examples include assistance with ordering efficiency, product replenishment, formulary development and execution, helping with physician preference items, and delivering the right products at the right price. “These are all areas we continue to push and develop programs around. Helping practices be successful and viable is critical to our success.”
Value begins with the sales reps who call on ambulatory care accounts.
“We need people who are curious, who continue to challenge the way business is done, who are thinking differently about the needs of the customer, who probe and understand the business our customers are in,” says Rademacher. “I don’t think that coming in as just a ‘wholesaler’ or ‘distributor’ is the model of the future. We have to act as partners who can help customers run their businesses better.
“The men and women we’re recruiting and developing for the future are students of the business. They understand all the aspects that are impacting our customers. They’re helping them not only in the tactics of supply chain, but in understanding the strategy of their business – and that is a different model. We need individuals who are focused around being strategic partners with our customers, really helping them deliver value to their patients. We feel that any area in which we can reduce administrative burdens and help them focus on delivering patient care is a benefit to our customers.”
With his wealth of experience, Rademacher feels confident he can help Cardinal Health’s team be that essential partner for its customers.
“I’ve seen a lot on the both sides of the equation. My role with CIGNA was to focus around patient care, making sure the patient was getting the right care at the right time. We focused on health and well-being, deploying resources to help patients through case management or a chronic condition, to optimize the healthcare system, and to do it at an affordable cost. The pressure from the payer standpoint is to achieve the right balance of cost and value, and make sure you deliver exceptional care to your members.
“I hope that experience brings me a different perspective in helping understand the market motivation from the payer side and now on the supplier side. Understanding all this will help us meet our customers’ needs and still deliver value so they can focus on what matters most – their patients.”
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