Tuesday, May 28, 2019

As Price Transparency Grows Inevitable, Healthcare Providers Need Better Tools to Close the Gap on Patient Trust


Transcript of a discussion on how healthcare providers can become more proactive in financial and cost transparency from the patient perspective.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HealthPay24.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Our next healthcare finance insights discussion explores ways that healthcare providers can become more proactive in financial and cost transparency from the patient perspective.

By anticipating rather than reacting to mandates on healthcare economics and process efficiencies, providers are becoming more competitive and building more trust and satisfaction with their patients -- and caregivers.

To learn more about the benefits of a more proactive and data-driven approach to healthcare cost estimation, we are joined by expert Kate Pepoon, Manager of Revenue Cycle Operations at Baystate Health in Springfield, Mass. Welcome, Kate.

Pepoon: Thank you for having me.

Gardner: We are also here with Julie Gerdeman, President of HealthPay24 in Mechanicsburg, Penn. Good to have you back, Julie.

Gerdeman: Thanks, Dana.

Gardner: We are at the point with healthcare and medical cost transparency that the finger, so to speak, has been pulled out of the dike. We have had mandates and regulations, but it's still a new endeavor. People are feeling their way through providing cost transparency and the need for more accurate estimations about what things will actually cost when you have a medical procedure.

Kate, why does it remain difficult and complex to provide accurate medical cost estimates?

Education is healthy 

Pepoon: It has to do with educating our patients. Patients don’t understand what a chargemaster is, which, of course, is the technical term for the data we are now required to post on our websites. For them to see a spreadsheet that lists 21,000 different codes and costs can be overwhelming.

What Baystate Health does, as I’m sure most other hospitals in Massachusetts do, is give patients an option to call us if they have any questions. You’re right, this is in its infancy. We are just getting our feet wet. Patients may not even know what questions to ask. So we have to try and educate as much as possible.

Gardner: Julie, it seems like the intention is good, the idea of getting more information in peoples' hands so they can make rational decisions, particularly about something as important as healthcare. The intent sounds great, but the implementation and the details are not quite there yet.

Given that providers need to become more proactive, look at the different parts of transparency, and make it user-friendly, where are we in terms of this capability?

Gerdeman: We are still in the infancy. We had a race to the deadline, to the Centers for Medicare and Medicaid Services (CMS) [part of the U.S. Department of Health and Human Services] deadline of Jan. 1, 2019. That’s when all the providers rushed to at least meet the bare minimum of compliance. A lot of what we have seen is just the publishing of the chargemaster with some context available.

But where there is competition, we have seen it taken a bit further. Where I live in Pennsylvania, for example, I could drive to a number of different healthcare providers. Because of that competition, we are seeing providers that don't just provide context, they are leveraging the chargemaster and price transparency as competitive differentiation.

Gardner: Perhaps we should make clear that there are many areas where you don’t really have a choice and there isn’t much competition. There is one major facility that handles most medical procedures, and that’s where you go.

But that's changing. There are places where it’s more of a marketplace, but that's not necessarily the case at Baystate Health. Tell us why for your patients, they don't necessarily do a lot of shopping around yet.

Clearing up charge confusion 

Pepoon: They don't. That question you just asked Julie, it's kind of the opposite for us because we have multiple hospitals. When we posted our chargemaster, we also posted it for our other three hospitals, not just for the main one, which is Baystate Medical Center (BMC). And that can create confusion for our patients as well.

We are not yet at the drive to be competitive with other area hospitals because BMC is the only level-1 trauma center in its geographical area. But when we had patients ask why costs are so different at our other hospitals, which are just 40 miles away, we had to step up and educate our staff. And that was largely guiding patients as to the difference between a chargemaster price and what they are actually going to pay. And that is more an estimate of charges from their particular insurance.
We have not yet had a lot of questions from patients, but we anticipate it will definitely increase. We are ready to answer the questions and guide our patients.

We have not yet had a lot of questions from patients, but we anticipate it will definitely increase. We are ready to answer the questions and guide our patients.

Gardner: The chargemaster is just a starting point, and not necessarily an accurate one from the perspective of an outsider looking in.

But it began the process to more accurate price transparency. And even while there is initially a regulatory impetus, one of the biggest drivers is gaining trust, loyalty, and a better customer experience, a sense of confidence about the healthcare payments process.

Julie, what does it take to get past this point of eroding trust due to complexity? How do we reverse that erosion and build a better process so people to feel comfortable about how they pay for their healthcare?

Gerdeman: There is an opportunity for providers to create a trusted, unique, and personalized experience, even with this transparency regulation. In any experience when you are procuring goods and services, there is a need for information. People want to get information and do research. This has become an expectation now with consumerization -- a superior consumer experience.

And what Kate described for her staff, that's one way of providing a great experience. You train the staff. You have them readily available to answer questions to the highest level of detail. That's necessary and expected by patients.

There is also a larger opportunity for providers, even just from a marketing perspective. We are starting to see healthcare providers define their brand uniquely and differently.  And patients will start to look for that brand experience. Healthcare is so personal, and it should be part of a personalized experience.

Gardner: Kate, I think it's fair to say that things are going to get even more challenging.  Increasingly, insurance companies are implementing more co-pays, more and different deductibles, and offering healthcare plans that are more complex overall.

What would you like to see happen in terms of the technologies and solutions that come to the market to help make this process better for you and your patients?

Accounting for transparency 

Pepoon: Dana, transparency is going to be the future. It's only going to get more … transparent.

This infancy stage of the government attempting to help educate consumers -- I think it was a great idea. The problem is that that did not come with a disclaimer. Now, each hospital is required to provide that disclaimer to help guide patients. The intent was fantastic, but there are so many different ways to look at the information provided. If you look at it face-value, it can be quite shocking.

I heard a great anecdote recently, that a patient can go online and look at the chargemaster and see that aspirin is going to cost them $100 at a hospital. Obviously, you are taken aback. But that’s not the actual cost to a patient.
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There needs to be much more robust education regarding what patients are looking at. Technology companies can help bring hospitals to the next level and assist with the education piece. Patients have to understand that there is a whole other layer, which is their actual insurance.

In Massachusetts we are pretty lucky because 12 years ago, then-Governor Mitt Romney [led a drive to bring health insurance to almost everyone]. Because of that, it’s reduced the amount of self-pay patients to the lowest level in the entire United States. Only around two to three percent of our patients don’t have insurance.

Some of the benefits that other states see from the published chargemaster list is better engaging with patients and to have conversations. Patients can say, “Well, I don’t have insurance and I would like to shop around. Thank you to Hospital A, because Hospital A is $2,000 for the procedure and Hospital B is only $1,500.”

But Massachusetts, as part of its healthcare laws, further dedicates itself to educating patients about their benefits. MassHealth, the Medicaid program of Massachusetts, requires hospitals to have certified financial counselors.

Those counselors are there to help with patient benefits and answer questions like, “Is this going to cost me $20,000?” No, because if you sign up for benefits or based on the benefits you have, it's not going to cost you that much. That chargemaster is more of a definition of what is charged to insurance companies.

The fear is that this is not so easily explained to patients. Patients don’t always even get to the point where they ask questions. If they think that something is going to cost $20,000, they may just move on.

Gardner: The sticker shock is something you have to work with them on and bring them back to reality by looking at the particulars of their insurance as well as their location, treatment requirements, and the specific medical issues. That's a lot of data, a lot of information to process.

Not only are the patients shopping for healthcare services, they will also be shopping for their next insurance policy. The more information, transparency, and understanding they have about their health payments, the better shopper they become the next time they pick an insurance company and plan. These are all choices. This is all data-driven. This is all information-dependent.

So Julie, why is it so hard in the medical setting for that data to become actionable? We know in other businesses that it's there. We know that we can even use machine learning (ML) and artificial intelligence (AI) to predict the weather, for example. And the way we predict the weather is we look at what happened the last 500 times a storm came up the East Coast as an example that sets a pattern.

Where do we go next? How can the same technologies we use to predict the weather be brought to the medical data processing problem?

Gerdeman: Kate said it well that transparency is here, and transparency is the future. But, honestly, transparency is table stakes at this point.

CMS has already indicated that they expect to expand the pricing transparency ruling to require even more. This was just the first step. They know that more has to be done to address complexity for patients as consumers.

Technology is going to play a critical role in all of this, because when you reference things like predicting the weather and other aspects of our lives, they all leverage technology. They look back in order to look forward. The same is true for and will be used in healthcare. It’s already starting to.

So [patient support] teams like Kate’s use estimation tools to provide the most accurate as possible costs to patients in advance of services and procedures. HealthPay24 has been involved as part of our mission, from pre-service to post-service, in that patient financial engagement.

But it is in arming providers and their staffs with that [predictive] technology that is most important for making a difference in the future. There will always be complexities in healthcare. There will always be things happening during procedures that physicians and surgeons can’t anticipate, and that’s where there will be modifications made later.

But given what we know of the costs around the 5,000 knee replacements some healthcare provider might already have done, I think we can begin to provide forward-looking data to patients so that they can make informed decisions like they never have before by comparing all of that.
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Gardner: We know from other industries that bringing knowledge and usability works to combat complexity. And one of the places that can be most powerful is for a helpdesk. Those people are on the other end of a telephone or a chatbot from consumers -- whether you are in consumer electronics or information technology.

It seems to me that those people at Baystate Health, mandated by the Commonwealth of Massachusetts, who help patients are your helpdesk. So what tools would you like to see optimally in the hands of those people who are explaining away this complexity for your patients?

How to ask before you pay 

Pepoon: That’s a great question. Step one, I would love to see some type of education, perhaps a video from some hospitals if they partnered together, that helps patients understand what it is they are about to look at when they look at a chargemaster and the dollar amounts associated with certain procedures.

That’s going to set the stage for questions to come back through to the staff that you mentioned, the helpdesk people, who are there ready and willing to respond to patients.

But there is another problem with that. The problem is that these are moving targets. People like black-and-white. People like, “This is definitely what I’m going to pay,” before they get a procedure done.

We have heard of the comparison to buying a car. This is very similar to educating yourself in advance, of looking for a specific model you may like for a car, of going to different dealers, looking it up online, seeing what you’re going to pay and then negotiating that before you buy the car.

That’s the piece that’s missing from this healthcare process. You can’t yet negotiate on it. But in the future – with the whole transparency thing, you never know. But it’s that moving target that’s going to make this hard to swallow for a lot of patients because, obviously, this is not like buying a car. It’s your life, it’s your health.

The future is going to have more price transparency. And the future is also going to bring higher costs to patients regardless of who they are and what plan they have. Plans 10 years ago didn’t have deductibles. The plans we had 10 years ago that had a $5 co-pay, and now those plans have a $60 co-pay and a $5,000 deductible.

That’s the direction our healthcare climate is moving to. We are only going to see more cost burdens on patients. As people realize they are going to need to pay out more money for their own healthcare services, it’s going to bring a greater sense of concern.

So, when they do call and talk to that helpdesk, it’s really important for all of us in all of our hospitals to make sure that we are answering patients properly. It was an amazing idea to have this new transparency, but we need to explain what it means. We need to be able to reach out personally to patients and explain what it is they are about to look at. That’s our future.

Gerdeman: I would just like to add that at HealthPay24 we work with healthcare providers all across the country. There are areas that have already had to do this. They have had to be proactive and jump into a competitive landscape with personalized marketing materials.

We are starting to see educational videos in places like Pennsylvania using the human touch, and the approach of, “Yes, we recognize that you’re a consumer, and we recognize that you have a choice.” They have even gone to the extent of creating online price-checkers and charge-checkers to give people flexibility from their homes of conveniently clicking a box from a chargemaster to determine what procedure or service they are to be receiving. They can furthermore check those charges across multiple hospitals that are competing and that are making those calculators available to consumers proactively.
We are starting to see educational videos using the human touch. The providers recognize that you're a consumer and that you have a choice. They have created online price-checkers to allow people from their homes to determine the procedures and pricing.

Gardner: I’m sensing a building urgency around this need for transparency from large organizations like Baystate Health. And they are large, with service providers in both Western Massachusetts as well as the “Knowledge Corridor” of Massachusetts and Connecticut. They have four hospitals, 80 medical practices, 25 reference laboratories, 12,000 employees, and 1,600 physicians.

They have a sense of urgency but aren’t yet fully aware of what is available and how to solve this problem. It’s a big opportunity. I think we can all agree it’s time now to be proactive and recognize what’s required to make transparency happen and be accurate.

What do you recommend, Kate, for organizations to be more proactive, to get out in front of this issue? How can vendors in the marketplace such as Julie and HealthPay24 help?

Use IT to explain healthcare costs

Pepoon: There needs to be a better level of education at the place where patients go to look at what medical charge prices are. That forms a disclaimer, in a way, of, “Listen, this is what you are about to look at. It’s a little bit like jargon, and that’s okay. You are going to feel that way because this is raw data coming from a hospital, and a lot of people have to go to school for very long time to read and understand what it is that they are looking at.”

And I think if there has to be a way that we can have patients focused and able to call and ask questions. That’s going to help.

For the technology side going forward, I am very interested to see what it’s going to look like in about a year. I want to see the feedback from other hospitals and providers in Massachusetts as to how this has gone. Today, quite frankly, when I was doing research for us at Baystate I reached out to find out what are the questions patients are asking. Patients are not really calling that much to talk about this subject yet. I don’t know if that’s a good thing or a bad thing. I think that that’s a sentiment most hospitals in Massachusetts are feeling right now.

I don’t think there is one hospital system that’s ahead of the curve or running toward the goal of plastering all of this data out there. I don’t think everybody knows what to do with it yet. IT companies and partners that we have -- our technical partners like HealthPay24 – can help take jargon and put it into some version that is easily digestible.

That is going to be future. It ties back to the question of: Is transparency going to be the wave of the future? And that’s absolutely, “Yes.” But it’s all about who can read the language? If me and Julie are the only two people in a room who can read the language, we are letting our patients down.

Gardner: Well, engineering complexity out is one of the things the technology does very well. Software has been instrumental in that for the past 15 or 20 years.
There is a huge opportunity to look at technology and emerging technology today to provide new levels of clarity, reduce complexity, and to become more proactive.

Julie, as we end our discussion, for organizations like Baystate Health that want to be more proactive, to be able to answer those patient phone calls in the best way, what do you recommend? What can healthcare provider organizations start doing to be in front of this issue when it comes to accurate and transparent healthcare cost information? 
Gerdeman: There is a huge opportunity to look at technology available today, as well as emerging technology and where it’s headed. If history proves anything, Dana, to your point, it’s that technology can provide new levels of clarity and reduce complexity. You can digitize processes that were completely manual and where everything needed to be done on the phone, via fax, and on paper.

In healthcare, there’s a big opportunity to embrace technology to become more proactive. We talk about being proactive, and it really means to stop reacting and take a strategic approach, just like in IT architectures of the past. When you take that strategic approach you can look at processes and workflows and see what can be completely digitized and automated in new ways. I think that’s a huge opportunity.

I also don’t want to lose sight of the humane aspect because this is healthcare and we are all human, and so it’s personal. But again, technology can help personalize experiences. People may not be calling because they want access online via their phone, or they want everything to be mobile, simple, beautiful, and digital because that’s what we increasingly experience in all of our lives.
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Providers have a great opportunity to leverage technology to make things even more personal and humane and to differentiate themselves as brands, in Massachusetts and all across the country as they become leading brands in healthcare.

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect healthcare finance insights discussion on how healthcare providers can become more proactive in modernizing financial and costs transparency -- from the patient perspective. And we’ve learned how anticipating rather than reacting to mandates on healthcare economics and process efficiencies builds more trust and satisfaction from patients as well as their caregivers.

So please join me in thanking our guests, Kate Pepoon, Manager of Revenue Cycle Operations at Baystate Health. Thank you so much, Kate.

Pepoon: Thank you, it was great.

Gardner: And we have been here with Julie Gerdeman, President of HealthPay24. Thank you so much, Julie.

Gerdeman: Thanks for the opportunity, Dana.

Gardner: And a big thank you as well to our audience for joining this HealthPay24-sponsored healthcare thought leadership discussion.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator. Thanks again for listening, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HealthPay24.

Transcript of a discussion on how healthcare providers can become more proactive in financial and cost transparency from the patient perspective. Copyright Interarbor Solutions, LLC, 2005-2019. All rights reserved.

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Friday, May 10, 2019

How Texmark Chemicals Pursues Analysis-Rich, IoT-Pervasive Path to the ‘Refinery of the Future’


Transcript of a discussion on how a Texas chemical company combines the best of operational technology with IT and now Internet of Things to deliver data-driven insights that promote safety, efficiency, and unparalleled sustained operations.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on the latest insights into hybrid IT and Internet of Things (IoT) solutions.

Our next operational technology (OT) optimization journey discussion revisits the drive to define the “refinery of the future” at Texmark Chemicals. Texmark has been combining the best of OT with IT and now IoT to deliver data-driven insights that promote safety, efficiency, and unparalleled sustained operations.

Stay with us now as we hear how a team approach -- including the plant operators, consulting experts and latest in hybrid IT systems -- joins forces for rapid optimization results.

With that, please join me now in welcoming Linda Salinas, Vice President of Operations at Texmark Chemicals, Inc. in Galena Park, Texas. Welcome, Linda.

Salinas: Thank you, Dana. Thank you for having me.

Gardner: We are also here with Stan Galanski, Senior Vice President of Customer Success at CB Technologies (CBT) in Houston. Welcome, Stan.

Galanski: Hi, it’s my pleasure to be here.

Gardner: And we are joined by Peter Moser, IoT and Artificial Intelligence (AI) Strategist at Hewlett Packard Enterprise (HPE), also based in Houston. Welcome, Peter.

Moser: Thank you, Dana. Glad to be here.

Gardner: Stan, what are the trends, technologies, and operational methods that have now come together to make implementing a refinery of the future approach possible? What’s driving you to be able to do things in ways that you hadn’t been able to do before?

Increased decision-making power

Galanski: I’m going to take that in parts, starting with the technologies. We have been exposed to an availability of affordable sensing devices. These are proliferating in the market these days. In addition, the ability to collect large amounts of data cheaply -- especially in the cloud -- having ubiquitous Wi-Fi, Bluetooth, and other communications have presented themselves as an opportunity to take advantage of.

On top of this, the advancement of AI and machine learning (ML) software -- often referred to as analytics -- has accelerated this opportunity.

Gardner: Linda, has this combination of events dramatically changed your perspective as VP of operations? How has this coalescing set of trends changed your life?

Salinas: They have really come at a good time for us. Our business, and specifically with Texmark, has morphed over the years to where our operators are more broadly skilled. We ask them to do more with less. They have to have a bigger picture as far as operating the plant.

Today’s operator is not just sitting at a control board running one unit. Neither is an operator just out in a unit, keeping an eye on one tower or one reactor. Our operators are now all over the plant operating the entire utilities and wastewater systems, for example, and they are doing their own lab analysis.
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This technology has come at a time that provides information that’s plant-wide so that they can make more informed decisions on the board, in the lab, whenever they need.

Gardner: Peter, as somebody who is supplying some of these technologies, how do you see things changing? We used to have OT and IT as separate, not necessarily related. How have we been able to make those into a whole greater than the sum of their parts?

OT plus IT equals success 

Moser: That’s a great question, Dana, because one of the things that has been a challenge with automation of chemical plants is these two separate towers. You had OT very much separate from IT.

The key contributor to the success of this digitization project is the capability to reboot those two domains together successfully.

Gardner: Stan, as part of that partnership, tell us about CBT and how you fit.

Galanski: CBT is a 17-year-old, privately owned company. We cut our teeth early on by fulfilling high-tech procurement orders for the aerospace industry. During that period, we developed a strength for designing, testing, and installing compute and storage systems for those industries and vendors.

It evolved into developing an expertise in high-performance computing (HPC), software design platforms, and so forth.

About three years ago, we recognized the onset of faster computational platforms and massive amounts of data -- and the capability for software to control that dataflow -- was changing the landscape. Now, somebody needed to analyze that data faster over multiple mediums. Hence, we developed a practice around comprehensive data management and combined that with our field experience. That led us to become a systems integrator (SI), which is what we’ve been assigned to for this refinery of the future.

Gardner: Linda, before we explore more on what you’ve done and how it improves things, let’s learn about Texmark. With a large refinery operation, any downtime can be a big problem. Tell us about the company and what you are doing to improve your operations and physical infrastructure.

Salinas: Texmark is a family-owned company, founded in 1970 by David Smith. And we do have a unique set of challenges. We sit on eight acres in Galena Park, and we are surrounded by a bulk liquid terminal facility.

So, as you can imagine, a plant that was built in the 1940s has older infrastructure. The layout is probably not as efficient as it could be. In the 1940s, we didn’t have a need for wastewater treatment. Things may not have been laid out in the most efficient ways, and so we have added these things over the years. So, one, we are landlocked, and, two, things may not be sited in the most optimal way.

For example, we have several control rooms sprinkled throughout the facility. But we have learned that siting is an important issue. So we’ve had to move our control room to the outskirt of the process areas.

As a result, we’ve had to reroute our control systems. We have to work with what we have, and that presents some infrastructure challenges.

Also, like other chemical plants and refineries, the things we handle are hazardous. They are flammable, toxic, and they are not things people want to have in the air that they breath in neighborhoods just a quarter-mile downwind of us.

So we have to be mindful of safe handling of those chemicals. We also have to be mindful that we don’t disrupt our processes. Finding the time to shut down to install and deploy new technology, is a challenge. Chemical plants and refineries need to find the right time to shut down and perform maintenance with a very defined scope, and on a budget.

And so that capability to come up and down effectively is a strength for Texmark because we are a smaller facility and so are able to come up and down and deploy and test and prove out some of these technologies.

Gardner: Stan, in working with Linda, you are not just trying to gain incremental improvement. You are trying to define the next definition, if you will, of a safe, efficient, and operationally intelligent refinery.

How are you able to leapfrog to that next state, rather than take baby steps, to attain an optimized refinery?

Challenges of change 

Galanski: First we sat down with the customer and asked what the key functions and challenges they had in their operations. Once they gave us that list, we then looked at the landscape of technologies and the available categories of information that we had at our disposal and said, “How can we combine this to have a significant improvement and impact on your business?”

We came up with five solutions that we targeted and started working on in parallel. They have proven to be a handful of challenges -- especially working in a plant that’s continuously operational.
The connected worker solution is garnering a lot of attention in the marketplace. With it, we are able to bring real-time data from the core repositories of the company to the hands of the workers in the field.

Based on the feedback we’ve received from their personnel; we feel we are on the right track. As part of that, we are attacking predictive maintenance and analytics by sensoring some of their assets, their pumps. We are putting video analytics in place by capturing video scenes of various portions of the plant that are very restrictive but still need to have careful monitoring. We are looking at worker safety and security by capturing biometrics and geo-referencing the location of workers so we know they are safe or if they might be in danger.

The connected worker solution is garnering a lot of attention in the marketplace. With it, we are able to bring real-time data from the core repositories of the company to the hands of the workers in the field. Oftentimes it comes to them in a hands-free condition where the worker has wearables on his body that project and display the information without them having to hold a device.

Lastly, we are tying this all together with an asset management system that tracks every asset and ties them to every unstructured data file that has been recorded or captured. In doing so, we are able to put the plant together and combine it with a 3D model to keep track of every asset and make that useful for workers at any level of responsibility.

Gardner: It’s impressive, how this touches just about every aspect of what you’re doing.

Peter, tell us about the foundational technologies that accommodate what Stan has just described and also help overcome the challenges Linda described.

Foundation of the future refinery

Moser: Before I describe what the foundation consists of, it’s important to explain what led to the foundation in the first place. At Texmark, we wanted to sit down and think big. You go through the art of the possible, because most of us don’t know what we don’t know, right?

You bring in a cross-section of people from the plant and ask, “If you could do anything what would you do? And why would you do it?” You have that conversation first and it gives you a spectrum of possibilities, and then you prioritize that. Those prioritizations help you shape what the foundation should look like to satisfy all those needs.

That’s what led to the foundational technology platform that we have at Texmark. We look at the spectrum of use cases that Stan described and say, “Okay, now what’s necessary to support that spectrum of use cases?”

But we didn’t start by looking at use cases. We started first by looking at what we wanted to achieve as an overall business outcome. That led us to say, “First thing we do is build out pervasive connectivity.” That has to come first because if things can’t give you data, and you can’t capture that data, then you’re already at a deficit.

Then, once you can capture that data using pervasive Wi-Fi with HPE Aruba, you need a data center-class compute platform that’s able to deliver satisfactory computational capabilities and support, accelerators, and other things necessary to deliver the outcomes you are looking for.

The third thing you have to ask is, “Okay, where am I going to put all of this computing storage into?” So you need a localized storage environment that’s controlled and secure. That’s where we came up with the edge data center. It was those drivers that led to the foundation from which we are building out support for all of those use cases.

Gardner: Linda, what are you seeing from this marriage of modernized OT and IT and taking advantage of edge computing? Do you have an ability yet to measure and describe the business outcome benefits?

Hands-free data at your fingertips 

Salinas: This has been the perfect project for us to embark on our IT-OT journey with HPE and CBT, and all of our ecosystem partners. Number one, we’ve been having fun.

Two, we have been learning about what is possible and what this technology can do for us. When we visited the HPE Innovation Lab, we saw very quickly the application of IT and OT across other industries. But when we saw the sensored pump, that was our “aha moment.” That’s when we learned what IoT and its impact meant to Texmark.
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As for key performance indicators (KPIs), we gather data and we learn more about how we can employ IoT across our business. What does that mean? That means moving away from the clipboard and spreadsheet toward having the data wherever we need it -- having it available at our fingertips, having the data do analytics for us, and telling us, “Okay, this is where you need to focus during your next precious turnaround time.”

The other thing is, this IoT project is helping us attract and retain talent. Right now it's a very competitive market. We just hired a couple of new operators, and I truly believe that the tipping point for them was that they had seen and heard about our IoT project and the “refinery of the future” goal. They found out about it when they Googled us prior to their interview.

We just hired a new maintenance manager who has a lot of IoT experience from other plants, and that new hire was intrigued by our “refinery of the future” project.

Finally, our modernization work is bringing in new business for Texmark. It's putting us on the map with other pioneers in the industry who are dipping their toe into the water of IoT. We are getting national and international recognition from other chemical plants and refineries that are looking to also do toll processing.

They are now seeking us out because of the competitive edge we can offer them, and for the additional data and automated processes that that brings to us. They want the capability to see real-time data, and have it do analytics for them. They want to be able to experiment in the IoT arena, too, but without having to do it necessarily inside their own perimeter.

Gardner: Linda, please explain what toll processing is and why it's a key opportunity for improvement?

Collaboration creates confidence

Salinas: Texmark produces dicyclopentadiene, butyl alcohol, propyl alcohol, and some aromatic solvents. But alongside the usual products we produce and sell, we also provide “toll processing services.” The analogy I like to tell my friends is, “We have the blender, and our customers bring the lime and tequila. The we make their margaritas for them.”

So our customers will bring to us their raw materials. They bring the process conditions, such as the temperatures, pressures, flows, and throughput. Then they say, “This is my material, this is my process. Will you run it in your equipment on our behalf?”
When we are able to add the IoT component to toll processing, when we are able to provide them data that they didn't have whenever they ran their own processes, that provides us a competitive edge over other toll processors.

When we are able to add the IoT component to toll processing, when we are able to provide them data that they didn't have whenever they ran their own processes, that provides us a competitive edge over other toll processors.

Gardner: And, of course, your optimization benefits can go right to the bottom line, so a very big business benefit when you learn quickly as you go.

Stan, tell us about the cultural collaboration element, both from the ecosystem provider team support side as well as getting people inside of a customer like Texmark to perhaps think differently and behave differently than they had in the past.

Galanski: It’s all about human behavior. If you are going to make progress in anything of this nature, you are going to have to understand the guy sitting across the table from you, or the person out in the plant who is working in some fairly challenging environments. Also, the folks sitting at the control room table with a lot of responsibility for managing the processes with lots of chemicals for many hours at a time.

So we sat down with them. We got introduced to them. We explained to them our credentials. We asked them to tell us about their job. We got to know them as people; they got to know us as people.

We established trust, and then we started saying, “We are here to help.” They started telling us their problems, asking, “Can you help me do this?” And we took some time, came up with some ideas, and came back and socialized those ideas with them. Then we started attacking the problem in little chunks of accomplishments.


We would say, “Well, what if we do this in the next two weeks and show you how this can be an asset for you?” And they said, “Great.” They liked the fact that there was quick turnaround time, that they could see responsivity. We got some feedback from them. We developed a little more confidence and trust between each other, and then more things started out-pouring a little at a time. We went from one department to another and pretty soon we began understanding and learning about all aspects of this chemical plant.

It didn’t happen overnight. It meant we had to be patient, because it’s an ongoing operation. We couldn't inject ourselves unnaturally. We had to be patient and take it in increments so we could actually demonstrate success.

And over time you sometimes can't tell the difference between us and some of their workers because we all come to meetings together. We talk, we collaborate, and we are one team -- and that’s how it worked.

Gardner: On the level of digital transformation -- when you look at the bigger picture, the strategic picture -- how far along are they at Texmark? What would be some of the next steps?

All systems go digital 

Galanski: They are now very far along in digital transformation. As I outlined earlier, they are utilizing quite a few technologies that are available -- and not leaving too many on the table.

So we have edge computing. We have very strong ubiquitous communication networks. We have software analytics able to analyze the data. They are using very advanced asset integrity applications to be able to determine where every piece, part, and element of the plant is located and how it’s functioning.

I have seen other companies where they have tried to take this only one chapter at a time, and they sometimes have multiple departments working on these independently. They are not necessarily ready to integrate or to scale it across the company.

But Texmark has taken a corporate approach, looking at holistic operations. All of their departments understand what’s going on in a systematic way. I believe they are ready to scale more easily than other companies once we get past this first phase.

Gardner: Linda, any thoughts about where you are and what that has set you up to go to next in terms of that holistic approach?

Salinas: I agree with Stan. From an operational standpoint, now that we have some sensored pumps for predictive analytics, we might sensor all of the pumps associated with any process, rather than just a single pump within that process.

That would mean in our next phase that we sensor another six or seven pumps, either for toll processing or our production processes. We won’t just do analytics on the single pump and its health, lifecycle, and when it needs to be repaired. Instead we look at the entire process and think, “Okay, not only will I need to take this one pump down for repair, but instead there are two or three that might need some service or maintenance in the next nine months. But the fuller analytics can tell me that if I can wait 12 months, then I can do them all at the same time and bring down the process and have a more efficient use of our downtime.”

I could see something like that happening.

Galanski: We have already seen growth in this area where the workers have seen us provide real-time data to them on hands-free mobile and wearable devices. They say, “Well, could you give me historical data over the past hour, week, or month? That would help me determine whether I have an immediate problem, not just one spike piece of information?”

So they have given us immediate feedback on that and that's progressing.

Gardner: Peter, we are hearing about a more granular approach to sensors at Texmark, with the IoT edge getting richer. That means more data being created, and more historical analysis of that data.

Are you therefore setting yourself up to be able to take advantage of things such as AI, ML, and the advanced automation and analytics that go hand in hand? Where can it go next in terms of applying intelligence in new ways?

Deep learning from abundant data

Moser: That’s a great question because the data growth is exponential. As more sensors are added, videos incorporated into their workflows, and they connect more of the workers and employees at Texmark their data and data traffic needs are going to grow exponentially.

But with that comes an opportunity. One is to better manage the data so they get value from it, because the data is not all the same or it’s not all created equal. So the opportunity there is around better data management, to get value from the data at its peak, and then manage that data cost effectively.

That massive amount of data is also going to allow us to better train the current models and create new ones. The more data you have, the better you can do ML and potentially deep learning.
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Lastly, we need to think about new insights that we can’t create today. That's going to give us the greatest opportunity, when we take the data we have today and use it in new and creative ways to give us better insights, to make better decisions, and to increase health and safety. Now we can take all of the data from the sensors and videos and cross-correlate that with weather data, for example, and other types of data, such as supply chain data, and incorporate that into enabling and empowering the salespeople, to negotiate better contracts, et cetera.

So, again, the art of the possible starts to manifest itself as we get more and more data from more and more sources. I’m very excited about it.

Gardner: What advice do you have for those just beginning similar IoT projects?

Galanski: I recommend that they have somebody lead the group. You can try and flip through the catalogs and find the best vendors who have the best widgets and start talking to them and bring them on board. But that's not necessarily going to get you to an end game. You are going to have to step back, understand your customer, and come up with a holistic approach of how to assign responsibilities and specific tasks, and get that organized and scheduled.

There are a lot of parties and a lot of pieces on this chess table. Keeping them all moving in the right direction and at a cadence that people can handle is important. And I think having one contractor, or a department head in charge, is quite valuable.

Salinas: You should rent a party bus. And what I mean by that is when we first began our journey, actually our first lecture, our first step onto the learning curve about IoT, was when Texmark rented a party bus and put about 13 employees on it and we took a field trip to the HPE Innovation Lab.

When Doug Smith, our CEO, and I were invited to visit that lab we decided to bring a handful of employees to go see what this IoT thing was all about. That was the best thing we ever could have done, because the excitement was built from the beginning.
They saw, as we saw, the art of the possible at the HPE IoT lab, and the ride home on that bus was exciting. They had ideas. They didn't even know where to begin. The buy-in was there from the beginning.

They saw, as we say, the art of the possible at the HPE IoT lab, and the ride home on that bus was exciting. They had ideas. They didn’t even know where to begin, but they had ideas just from what they had seen and learned in a two-hour tour about what we could do at Texmark right away. So the engagement, the buy-in was there from the beginning, and I have to say that was probably one of the best moves we have made to ensure the success of this project.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how Texmark Chemicals and its solutions partners are defining the refinery of the future based on operational technology optimization. And we have learned how combining the best of that OT with IT and now IoT delivers data-driven insights that promote safety, efficiency, and unparalleled sustained operations.

So please join me now in thanking our guests, Linda Salinas, Vice President of Operations at Texmark Chemicals. Thank you so much, Linda.

Salinas: Thank you, Dana.

Gardner: We have also been here with Stan Galanski, Senior Vice President of Customer Success at CB Technologies. Thank you, Stan.

Galanski: I appreciate it. Thank you, Dana. I enjoyed it.

Gardner: And lastly, we have been here with Peter Moser, IoT and AI Strategist at HPE. Thank you, Peter.

Moser: Thank you, Dana. Thanks for having me.

Gardner: And a big thank you to our audience as well for joining this special BriefingsDirect Voice of the Customer IoT innovations interview. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored discussions.

Thanks again for listening. Pass this along to your IT community, if you would, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how a Texas chemical company combines the best of operational technology with IT and now internet of things to deliver data-driven insights that promote safety, efficiency, and unparalleled sustained operations. Copyright Interarbor Solutions, LLC, 2005-2019. All rights reserved.

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