Healthcare Value Analysis & Utilization Management Magazine - Volume 4 Issue 1

Volume 4/Issue 1

Healthcare

Leading Cost and Quality Strategies for the Healthcare Supply Chain

Magazine

Physician Preference Item Value Analysis and Standardization Success Through Vendor Partnering

www.ValueAnalysisMagazine.com

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contents

Healthcare Value Analysis & Utilization Management Magazine Healthcare Value Analysis & Utilization Management Magazine is published quarterly

by Strategic Value Analysis® in Healthcare P.O. Box 939, Skippack, Pa 19474 Phone: 800-220-4274

8 FEATURED ARTICLE

bobpres@ValueAnalysisMagazine.com

By Susan G. Miller MN, RN, CMRP and Megan Bourque, PhD

www.ValueAnalysisMagazine.com

PPI Value Analysis and Standardization Success Through Vendor Partnering

Editorial Staff

14 UTILIZATION ARTICLE

By Robert W. Yokl

Incorporating Supply Utilization Management into Your Value Analysis Program 17 CLINICAL VA Article

By James Russell, RN-BC

PPI: How About Patient Preference Items?

23 THE LAST WORD

By Tim Ingram, MBA/HCM,CMRP

Gaining the Next Level

Volume 4/Issue 1

FAX: 610-489-1073

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Publisher Robert T. Yokl bobpres@ValueAnalysisMagazine.com

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Managing Editor Robert W. Yokl ryokl@ValueAnalysisMagazine.com

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Senior Editor Patricia A. Yokl ————————————

Editor and Graphic Design Danielle Miller Copyright 2016 Strategic Value Analysis® in Healthcare. All rights reserved. Reproduction, translation or usage of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without permission of the copyright owner is unlawful. For permission call, fax, or email Robert W. Yokl, Managing Editor, Phone: 800-220-4271, FAX: 610-489-1073, E-Mail: ryokl@valueanalysismagazine.com for approval to reprint, excerpt or translate articles.

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From the Publisher's Desk

Robert T. Yokl

Value Analysis Checklists Can Make Your VA Job Easier Robert T. Yokl

Checklists have long been used by pilots, astronauts, and architects to avoid costly and life threating mistakes. Now, even surgeons worldwide are using checklists to eliminate their mistakes and errors.

The conclusion: Checklists are the secret to avoiding mistakes, providing consistency in your work, and avoiding missed critical steps in complex processes.

You might not think of it as such, but value analysis is a critical and complex process representing millions of dollars of new expenditures in any given year. Also, value analysis is or should be the guardian against waste and inefficiencies in your healthcare organization’s supply streams.

In order to provide consistency, thoroughness, and reliability in all of your value analysis processes, value analysis leaders should devise checklists for all value analysis functions (e.g., new product requests, new or renewal group purchasing contracts, product failures, utilization management, etc.).

A good way to make checklists is with an Excel spreadsheet (Google Excel checklist for tutorials), since they are printable and easy to update. Experts tell us there are two types of checklists: DOCONFIRM and READ-DO. Here’s how you use them: An individual or team will do their work or procedures from memory and experience and then confirm with the DO-CONFIRM checklist that they did everything right and didn’t miss anything. With the READ-DO checklist the individual or team carries out the tasks as they check them off the list. You will need to decide what works best for your VA teams.

Most importantly, a checklist cannot be lengthy and it should fit on one page. Keep the tasks down to five to nine short items that everyone understands (e.g., confirm insurance). The secret is to decide which steps are most critical and how frequently people miss them. Lastly, you must “test” the checklist in the real world until it works consistently. Now, you have a system to do things right the first time.

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Our presenters, Robert T. Yokl, President, SVAH Solutions, and Robert W. Yokl, Vice President and COO, SVAH Solutions, are acknowledged experts in value analysis and utilization management having worked with over 500 clients over their long careers in healthcare value analysis and supply utilization management. They are looking forward to sharing the lessons they have learned being in the healthcare supply chain utilization & VA business for nearly three decades.

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Volume 4/Issue 1 Healthcare Value Analysis & Utilization Management Magazine 6 LEARN MORE WITH A FREE TEST DRIVE WWW.UTILIZER-DASHBOARD.COM

From the Managing Editor’s Desk

Robert W. Yokl

Re-Energizing Your Value Analysis Program Robert W. Yokl

As we begin this New Year of 2016, I thought I would offer my view on how to get unstuck from the endless loop of our supply/value chain worlds. The goal would be to freshen up, enthuse, and motivate yourself and your teams to get even more results than you ever thought possible in less time with less effort. 

Refresh Your Strategic Value Analysis Plan: The beginning of a calendar year is a good time to refresh your strategic plan for your value analysis team. It is too easy to get caught up in the endless motion of the value analysis process but as they say, “A professional must go back to basics at least once a year.” Going back to basics for a VA leader is to go back and revisit your strategic plan to see if you have accomplished your goals to date and are on track to meet your goals for the rest of your upcoming year as well. More importantly, try to look to the future (6 months, 1 year, 3 years, etc.). This is key to your short and long term success! As the healthcare supply chain makes the switch to utilization versus price savings, make sure you incorporate your next actionable steps in your VA Strategic Plan now and in the future.

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Don’t Ignore Education: There is nothing better to improve your focus, your teams’ focus, and to enhance your quality improvement and savings programs than to offer quality training for you and your teams. One of the reasons we get caught in the loop is that we only have the knowledge that we have. We must always push ourselves forward to gain the next level or we will get caught up in the muck. Always be on the lookout for new and better training techniques, webinars, certifications, and the like. This will keep your perspectives moving forward.

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Advance Your Technology Tools: If I had to spend all of my 24 years as a value analysis professional using only Word and Excel documents they would have had to lock me up and throw away the key because that would have just created insanity for me. I imagine that many of you feel the same and are eager to find the “better mouse trap.” There are so many great tools, software, and knowledge bases out there to choose from that, in many cases, are customized to your value analysis program, but you have to look and be open to new and better tools. Changing to new tools may have some challenges but the results will be worth it.

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Eliminate Your Bottlenecks: I remember a number of years back we had our own National Best Price Database comparisons (we still have those). Our team used to spend hours and hours on making comparisons and benchmark savings recommendations. It was great that we had a database to look up these items but it was such a drain on time and resources to accomplish this. I decided to show the database to my programmer and told him about the bottleneck issue. He came up with a fix in less than three hours ($375 programming time charge) that turned a job that was 15-20 hours into less than 10 minutes. Plus, it was more accurate and showed more savings for our customers! Seek out the tools that will eliminate your bottlenecks.

Whether you take note of the suggestions above or not, to be successful in the value analysis and supply utilization world today you must push yourself and your programs to new levels. Keep it fresh, keep it fun if you can, and remember to enjoy the process!

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Featured Article

Susan Miller and Megan Bourque

PPI Value Analysis and Standardization Success Through Vendor Partnering:

A Case Study of Hernia Mesh Savings and Quality Improvement at Thomas Jefferson University Hospital Miller, Susan G.1 MN, RN, CMRP and Bourque, Megan2 PhD 1Thomas

Jefferson University Hospital, Philadelphia, PA Research Group, Burlington, ON

2Cornerstone

Why Standardization was Important At Thomas Jefferson University Hospital (TJU), reducing supply costs is an organizational imperative. Standardizing product lines to one vendor is just one way in which TJU is tackling increasing supply costs, and limiting excessive spending. TJU is a 950 bed facility in Philadelphia, with 57 operating rooms spread across 4 distinct buildings. With 30 different departments, and various surgical specialties, there are requests for over 500 new products and medical devices each year, generating a surgical wish list that is simply not economically feasible. A multidisciplinary team of individuals undertook the process of standardizing hernia mesh products, in an effort to address the growing number of SKUs associated with this product class. These products represented a good opportunity for standardization as a result of escalating costs, variability in product choice, and a lack of evidence to support the use of one product over another.

At TJU, the cost of hernia mesh products was on the rise; with the annual spend nearly doubling over the course of just under two years. The main supplier of biologic grafts drove the majority of the hernia mesh spend, and was steadily increasing their cost and promoting the use of larger, more expenVolume 4/Issue 1

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sive, biologic grafts. Here at TJU, we had the metrics to demonstrate the rising cost of mesh and the budget implications of this cost, which got the attention of both physicians and administrators. Before standardization, there were 8 suppliers of hernia mesh products at TJU, a large variability in product selection, and an annual mesh spend of over 1.8 million dollars.

Becoming “EnMESHed�

The goal of the standardization initiative was to achieve the best possible clinical outcome while spending no more than necessary. To achieve this goal took our multidisciplinary team 13 months to complete. The final success could be attributed to the approach, which was different from our three prior attempts to reduce variation in this category. The use of tools to support the need for standardization, and monitor its success, was crucial. TJU tracked and analyzed which mesh products were used for 1 year, and the clinical outcomes associated with mesh use. Additionally, the representation of surgeons and OR personnel on the standardization team helped to ensure that all interests were represented. The successful initiative was the collaborative effort of this team, which included myself, Susan Miller (Director of Value Analysis), as well as Mike Profeta (Perioperative Nurse Manager), Monica Young (VP of Perioperative Services), Kelli McRory Thomas (Senior Contract Manager), and Dr. Ernest Rosato (surgeon champion). It was essential to have a reputable and committed surgeon champion on this team, to promote the standardization initiative and lend credibility with other surgeons. Our team met weekly to achieve the common goal of ensuring optimal product value.

In the initial stages of the standardization process, the products which represented an opportunity for cost-savings were identified. After hernia mesh products were selected, baseline data for 1 year was collected on when these products were used, which products were selected, who was using them, and what clinical outcomes were obtained (recurrences, surgical site occurrences, and readmissions).

This information was essential for the monitoring and comparison of outcomes before and after standardization. Additionally, familiarity with the decision making process of surgeons was important in ensuring that any evidence-based selection criteria were considered in the process. It became clear that there was inconsistency in the rationale behind the mesh selection process, and that there was no clear evidence supporting the use of one vender over another.

Separate proposals for synthetic and biologic mesh products were requested from the main suppliers of hernia mesh, with the expectation that each vendor would offer their best price, and provide evi-

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dence to support their product line. These submissions were processed, and the surgeon champion collaborated with the committee to review each proposal. The evidence was sifted through objectively. Unfortunately there were little head-to-head clinical data available to compare hernia mesh products offered by different vendors, so the best available evidence supporting each product was assessed. The best and final offers were analyzed to determine the value of each supplier, which was a function of quality and cost.

Selecting a Partner Vendor The best evidence available was provided by the vendors, and was used to select products that would result in favorable clinical outcomes and provide value to the organization. The mesh options were broken down into categories; synthetic, porcine, or human.

Based on the literature review conducted in the initial stages of the standardization initiative, and on the data provided by vendors, when there was little evidence to suggest any significant advantage of one product over another within any given category and when there is no clear evidence to support one product versus another, the decision becomes more heavily weighted on cost. In considering the cost of standardizing with each vendor, not only were the absolute product costs considered, but also any additional value elements offered. BARD (C. R. Bard-Davol Inc, Warwick, RI) offered products in each mesh category evaluated, providing the option of full standardization. The goal at the onset of the initiative was to standardize 100% of biologics to one vendor, and 85% of synthetics to one vendor. Partnering with BARD allowed both biologics and synthetics to be standardized with one vendor. As added value, BARD has been a market leader in surgical mesh for years, and this partnership comes with an intrinsic degree of confidence, because they are being used widely with success and trusted across the country. A standardization agreement was struck between BARD and TJU as a result of this added value and reasonable product costs.

TJU began standardization on October 16, 2013; a drop dead date. On that date, products from vendors other than BARD were removed from the shelves, and no requests for other hernia mesh products were accepted. This facilitated a clean switch, and ensured that all surgeons and OR personnel were following the new guidelines for consistent product use. At the onset of standardization, the partner vendor provided information binders, product cross-reference charts, training sessions, and monitoring charts, to ensure that all surgeons were familiar with the new product line and comfortable utilizing BARDÂŽ hernia mesh products. These efforts played a role in facilitating a smooth transition.

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Featured Article

Susan Miller and Megan Bourque

The End Result The hernia mesh standardization initiative began at TJU in October, 2013. The facility is currently on track to save over 1.5 million dollars in three years, in supply costs alone. In the first year, TJU saved over $600,000. Savings associated with efficiencies were not tracked, but standardization may have saved money as a result of improved inventory management, reduced product wastage, less training and education time on multiple product lines, and ease of contract management and product ordering. With respect to variability, standardization reduced the number of hernia mesh vendors at TJU from 8 to 3, with BARD being the predominant supplier. The other two suppliers offer niche products that are not provided by the partner vendor, and are utilized at a low volume. These carve outs to the standardization agreement represent a small proportion of the hernia mesh usage at TJU. In addition to reducing the number of hernia mesh suppliers, the process of standardization helped to provide more clear guidelines as to when to appropriately use each type of mesh. Prior to standardization, surgeons at TJU used biologic grafts 37% of the time. After standardization, and with the advent of newer synthetic mesh products, such as Phasix速, this was reduced to 20%. This suggests that having criteria for the appropriate use of mesh products helped encourage consistency in mesh selection, and avoid excessive use of costly biologic grafts.

For a medical device to be considered valuable, it has to be effective as well as economical. Clinical outcomes were monitored throughout the standardization process, for one year after surgery. Clinical outcomes were maintained at a high level after the switch, with no significant changes detected. Any outcomes that were raised by surgeons as possible objections were tracked, as were outcomes that could have reimbursement implications. This was an important part of the effort, to help to ease any fears, and sustain the change over time by preventing surgeons from reverting back to their original mesh preferences based on a false sense of clinically superior outcomes.

Standardization led to an enhanced and collaborative relationship between TJU and the partner vendor, as both parties share a clear final objective. Communication about new BARD products that may be useful is more fluid, and as a result TJU is already in the process of reviewing a newer BARD product, XenMatrix速 AB, which is the only antibiotic-coated biologic graft available on the market.

In much the same way, TJU has evaluated and implemented the use of the fully absorbable Phasix速 mesh offered by the partner vendor. Using this product significantly reduced the number of costly biologic meshes being used, saving an additional $115,000 in 2014, above and beyond the savings associated with standardization. This significant cost avoidance stems from the fact that each patient who is treated with Phasix速 mesh would have previously been treated with a biologic graft, a product with a much higher cost.

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As a result of standardization, the BARD sales rep involved in the process, Chris Nunciato was free to focus on the communication of information, the supply of knowledge, and product support, without the perception of promotion. This change of outlook helped the physician to focus on choosing the right product for each patient, and increased the level of trust in the advice provided by BARD. In the standardization of hernia mesh products at TJU, the support offered by the partner vendor was considered crucial to the success of the initiative. Nunciato offered in-services to educate surgeons and OR personnel on BARD products, provided weekly case reports of mesh usage and outcomes, outfitted each OR with product information binders, techniques guides, and product cross-reference charts, and was consistently available to answer questions.

What Challenges May Be Faced, and How Can They Be Overcome?

The most significant challenge that the team at TJU faced throughout the standardization process was resistance from surgeons. There were a few surgeons with strong preferences for specific mesh products, without evidence-based rationale. This was addressed by encouraging discussions about the evidence available to support each product, and the cost implications of each decision, including device costs and reimbursement amounts. It was important to communicate to surgeons that reimbursement rates are fixed for each procedure code, and that costly devices are not reimbursed differentially than more affordable ones. As a learning point, TJU noted that it was important to keep surgeons apprised of the standardization process and vendor considerations.

Despite the challenges they faced, the standardization team at TJU continues to undertake these initiatives. The “standardization� time slot allotted for the initiative has been maintained each week, and other product classes are continually being considered and evaluated in much the same way as hernia mesh. The standardization process at TJU has proven to be a reproducible and successful process.

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Utilization Management

Robert W. Yokl

Incorporating Supply Utilization Management (SUM) Into Your Value Analysis Program Sum Will Help You Overcome the Three Biggest Challenges Value Analysis Teams Face As value analysis professionals we would like to think that we can stick strictly to our set disciplines, methodologies, and processes and in the end gain the big quality and savings results that are needed for our healthcare organizations. But the reality is that our methodologies and systems are limited by their own rules, processes, and data in hand, or lack thereof. If you have been in value analysis for some years, then you understand what these limitations are. As a discipline, we are always working to improvise solutions to overcome the challenges and limitations and to push our programs forward to sustain even bigger results. We therefore need to incorporate additional tools, methodologies, and systems in order to take our programs to new levels of sustainable quality and savings results while overcoming the challenges at hand. Here are three of the biggest challenges and their solutions that I see to move your value analysis program to the next level of savings performance.

Challenge #1 - VA Does Not Have Robust Utilization Reporting Value analysis was created back in the mid-1940s and is geared toward functional analysis of products, services, and technologies with the goal of reducing costs while maintaining and/or improving quality. Value analysis is a great engine to drive cost and quality issues out of the organization and gain big savings while facilitating evidence-based change for our organizations. What value analysis is lacking is systems and methodologies for developing new savings projects. If your savings engine is running at a quarter or even half speed, then your healthcare organization is not achieving the savings results it needs to sustain a healthy bottom line.

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Utilization Management

Robert W. Yokl

Solution #1 - Supply Utilization Reporting Will Give You Ongoing VA Savings Candidates What is unique about Supply Utilization Management (SUM) is the fact that it is built to capture, organize, and then report on over 300 major and minor categories of spend which encompasses 90% of all products, services, and technologies you purchase. This is not just a simple spend report but includes all of the categories mapped to their respective operating metric that will allow a true cost per metric measurement for your overall category spend. This will provide you with an unchallengeable report that will give your value analysis leaders the fuel they need for their savings and quality improvement agendas. Consequently, your VA committees and teams can then strategically plan using a descending dollar savings listing to help them determine how and when they will attack their next major savings opportunities. In the hands of VA leaders, the SUM reporting now keeps the biggest and most important savings at the top of the VA agenda while making the reporting automatic for the VA teams and leaders.

Challenge #2 - Studies Implemented but No Automatic Follow-Up Reporting Another challenge that value analysis teams face is the fact that once VA studies have been completed and implemented, there is no ongoing reporting to tell the team whether the products, services, and technologies have achieved their planned results. Yes, you have had savings reports in spreadsheets and other databases for years but none of these are tied to systems that can correlate whether your savings results are holding, getting worse, or improving. You can’t tell without tediously going back and manually auditing these studies using basic spreadsheets. There is just no time for value analysis leaders to perform this follow up task; it needs to be automatically part of the process.

Solution #2 - Before, During, and After Reporting that is On Point Because SUM reporting is perpetual in nature, it is a great reporting engine to let you know where you stand before your value analysis study (on new or existing products) begins, where you are while you analyze the product, and what the results are after the study has been completed. Plus, it will continue to track and flag the category if the costs go up or down dramatically. If you are anticipating a 22% category reduction because of a value analysis implemented savings, then the SUM reporting should start to show your results on the subsequent quarterly and fiscal year-to-date reports. This same logic applies to all implemented value analysis product or category studies.

Further, because savings is a moving target and is based on volume and spend per operating metric, SUM is the perfect methodology to give you the “true results� of your value analysis studies since it Volume 4/Issue 1

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Utilization Management

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factors in all variations in your healthcare organization’s volumes. Thus, eliminating one of the biggest customer excuses for whether a study is working, not working, or should be re-reviewed because the results don’t match the recommendations. The worst thing that could happen in today’s healthcare environment is to promise savings and then not be able to deliver on your promise. SUM can avoid this embarrassment!

Challenge #3 - Value Analysis Teams Lack Evidence on Their Own Organizations Value analysis teams are desperately trying to gather evidence for their value analysis studies to gain buy-in from their clinicians, department heads, and managers for change. Even when quality evidence-based studies or materials are found, they must be validated in your healthcare organization.

Right now, evidence validation is a manual task and in many cases is fast tracked or just blindly believed to be the truth. The VA team then proceeds not knowing if the evidence or the result is working beyond simple opinions or surveys. Neither a survey nor an opinion will give any feedback beyond the clinical evaluation trial. The product could be working exactly as specified or could be dead wrong and causing cost and quality issues over the short and long term.

Solution #3 - The Best and Most Believable Evidence is Your Own Reliable Data Because of the uniqueness and disparate characteristics of any healthcare organization, it is challenging for value analysis practitioners to bring valid evidence to the table that would convince clinicians, department heads, and managers to entertain a change. With SUM, you now have your data formatted, organized, and readily available to validate any evidence that comes in your door, from a single product validation (IV catheter, airway tube, endomechanical instrument, etc.) to a whole major category (surgical mesh, urological Foley catheters, pacemakers, contrast media, etc.). The key is that you must be able to quickly ascertain whether the evidence brought to the table is going to deliver the results you expect.

It Is Time to Answer the Demands for Higher Levels of Reporting from Your Stakeholders To summarize, it is time that we start to look to Supply Utilization Management as a great partner to our value analysis teams and committees. Value analysis has long been lacking the analytic and data centric element that it clearly needs. Plus, our department heads, clinical leaders, and value analysis team members are now demanding new levels of data to match up to the new growing challenges that value analysis teams are facing. By incorporating SUM with VA, organizations can take your savings and quality improvement to a whole new level. Finally, you can actually know that you are making big sustainable savings results instead of painstakingly trying to validate savings, or worse yet, not knowing at all.

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Clinical Value Analysis

James Russell

PPI: How About Patient Preference Items?

James Russell, RN-BC, Value Analysis Facilitator, UF Health at Jacksonville

The concept of Physician Preference Items (PPI) has been a mainstay in clinical value analysis for many years. It has dominated the Perioperative and Interventional worlds as often the largest expense in the acquisition of new products and technologies. With the progression toward evidencebased clinical practice (a hallmark of any ANCC Magnet organization), the shift toward patient-specific products might be inevitable. We can only hope!

I know of an organization that spent several million dollars on new Radiology equipment because they had recruited a new Medical Director of Radiology and he liked Company A vs. Company B. A few short years later, this highly respected physician left the institution for another position and a new Medical Director was recruited. You can see where this is going. The facility spent millions replacing their perfectly fine equipment from Company A with brand new machines from Company B, because that was the new doctor’s preference. The not so funny thing is, this is not an uncommon story.

A frontier that value analysis would do well to climb into is physician recruitment. When a facility is recruiting a new Orthopedic Surgeon, the time to find out her preferences for orthopedic implants is not when she schedules her first case! Finding out her preferences on the front end can help avoid chaos on the back end. There may be things that she’s flexible with (certain types of external fixation Volume 4/Issue 1

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Clinical Value Analysis

James Russell

may be generic to her and she may not care which vendor the hospital uses). There may be things she believes strongly in. The time for her to present her preferences to the perioperative value analysis team is before she’s ready to do surgery. That team may require her to bring evidence to support her assertion that Vendor X is clinically superior to Vendor Y. She may be right! New ideas aren’t automatically wrong, just because they didn’t originate with the “Old Guard.” The facility may want to go out for bid in this category, based upon her evidence. I heard a wonderful analogy to the introduction of new ideas described as watching the immune system of the facility’s culture attack like the idea was an unwelcome pathogen. Sometimes, new ideas are beneficial.

All too often, however, new products are brought in simply because a physician requires it. If the facility’s goal is conflict avoidance, getting the MD what he wants is an easy way to accomplish this. Most facilities don’t have an endless supply of money to provide every doctor with exactly what he or she wants. Compromises must be made on both sides. This is where evidence becomes the perfect decision-making tool.

It takes opinions (emotion) completely out of the picture and lets data, evidence, math, and logic determine the appropriate course of action. This process is best done with a physician’s peer group. How many times has a doctor expressed that Brand C is the best thing for his patients and then switched his tune to Brand D when the vendor representative changes jobs? This physician’s colleagues can call him on this in ways that are difficult, but not impossible, for the Value Analysis Facilitator to do.

Another appropriate step to take is to determine if a physician’s allegiance to a certain manufacturer is based upon the superiority of the company’s products or other less transparent factors. The Centers for Medicare and Medicaid Services (CMS) has published data related to the Open Payments portion of the Patient Protection and Affordable Care Act of 2010. This data, open to the public, allows individuals to search for payments made by manufacturers to both physicians and teaching hospitals. It is entirely appropriate to see if our new Orthopedist was paid $10,000 in speaking fees by Vendor X last year. That doesn’t mean she’s done anything wrong or that she can’t champion this vendor to be brought into the hospital’s formulary. It does, however, bear some scrutiny. Did she disclose this information or did the team have to find out on their own? Was she involved in the creation of any of the company’s products? Could there be Stark Law violation concerns if she gets royalties and champions the product? This is different than Open Payments and most doctors understand it better. The concept, however, is similar.

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Clinical Value Analysis

James Russell

I once had a physician make his case by telling me, “The reason I want this thing is that I know so much about it. I’ve spent years speaking about it and defending it to my colleagues. I’ve got reams of evidence and peer-reviewed independent studies that show its superiority.” My response? Perfect!

Then you won’t have any trouble convincing the value analysis team of that, because your opinion is based on evidence, not how much money the company gives you.

Again, evidence-based practice makes the perfect lightning rod. If the proposed product can stand up to the test of evidence, it is not really a Physician Preference Item. It is what’s best for the facility’s patients. That’s a much more appropriate, and defensible, position. Suppose your new orthopedic surgeon wins her case and the facility converts a significant portion of its marketshare to Vendor X. This could be a multi-million dollar decision. What if Vendor Y objects (perhaps even publicly), saying that the decision was made because Vendor X gives the new doctor large fees for speaking engagements? As long as evidence is on your side, you have a logical basis for the decision you made.

The days of being afraid that a physician will be offended by these ideas are over. The checks and balances of evidence and open payments are there to protect the MD as well as the facility. However, an institution must have the organizational will to take on those physicians who simply want what they want, when they want it. Somebody has to be willing to say no and risk the backlash. Suppose your committee tells the physician they haven’t made a compelling case as to why the hospital should spend more money for Vendor X when no evidence exists that it’s better for patients. What happens if he/she runs to senior leadership and threatens to leave the facility if she doesn’t get his/her way?

Orthopedic surgery is a significant portion of many facilities’ revenue. Is senior leadership willing to back the committee’s decision, or will they cave to the pressure of a temper tantrum by a powerful practitioner? If you don’t know the answer to this question…don’t say no until you do! You may find yourself out on a limb all by yourself.

Jim Russell is a Value Analysis Facilitator UF Health at Jacksonville and has more than 25 years of nursing experience, specializing in critical care and psychiatry. He has been a Staff Nurse, Charge Nurse, Clinical Coordinator, Nurse Manager, Director, and Chief Nursing Officer. He worked for many years in the for-profit community healthcare sector and also has several Academic Medical Centers on his resume. Jim sat for 5 years on the Nursing Advisory Board for a HealthTrust, performing Value Analysis for nursing related products and represented more than 70 hospitals. He is currently on several Advisory Councils and Special Interest Groups for UHC and Novation. When not at work, he can be found rolling around with his hyperactive rescue Husky. You can contact Russell with your questions or comments at James.Russell@jax.ufl.edu Volume 4/Issue 1

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Most hospitals and health systems do not have the time, systems, or resources to aggressively attack their utilization costs right now...

But that does not mean you should not protect your future all the same!

Why not partner with an expert third party that can provide you with all of the resources (analytics, fast track systems, and procedural based success modeling) that you will need to be successful in supply utilization management to protect your future.

Call Us Today at 1-800-220-4274 or Fill Out the No Obligation Contact Form to See the Latest Savings Technology at www.ProtectYourSupplyChain.com Volume 4/Issue Value Analysis &Savings Utilization Management SVAH 1Solutions, Skippack PA 19474 Healthcare — 28 Years of Non-Salary Success ExperienceMagazine You Can Count On!

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Ask yourself this important question: Would you rather be aware of where all your utilization savings reside today or would you rather risk your supply chain's future by not knowing and then getting blindsided somewhere down the road?

Protect Your Supply Chain’s Future—Awareness is Your Strategic Ally There is a strategic shift in our industry. Are you seeing it? It is the result of your hospital, system, or IDN needing all of the savings it can muster, just to stay in place. Saving the old ways is not enough to keep you from getting blindsided. To protect your future you will need to have multiple sources of savings (i.e., price, standardization, and utilization) to prevent the loss of control of your future.

Dramatic Case Study of 403-bed Community Hospital Until two years ago, there was a 403-bed community hospital that was 100% dependent on price and standardization savings for its survival. Unfortunately, it was running out of these savings. That’s when SVAH came along with our three-prong approach to savings; price, standardization, and utilization.

With SVAH’s help, this healthcare organization is now on track to save $235,098 (1%) on price, $4,671,428 (15%) on utilization, and $2,363,391 (18%) on their purchase services, or a total of $7,269,917 (11.3%). Is this the kind of savings that your senior management is strategically looking for?

Nothing Lasts Forever If you think your price savings will last forever, you are sadly mistaken. It’s now time for a strategic shift in your supply chain expense management if you are to protect your future. Yes, 407 healthcare users can’t be wrong! your regional GPO will give you a small bump in your price savings for a few years; however, this is a short term tactic, not a solution to your cost challenges. Only by making a strategic shift can you be assured that you won’t run out of savings.

Learn more about how partnering with an expert third-party supply chain organization can bring about major savings dividends and protection for the future for your supply chain savings programs. Just visit our website (below) to see how we can make this happen.

Call Us Today at 1-800-220-4274 or Fill Out the No Obligation Contact Form to See the Latest Savings Technology at www.ProtectYourSupplyChain.com Volume 4/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

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Value Analysis Advantage Software - Analytics - Support - Actionable Reports Advantages that Take Your Value Analysis Program to a Whole New Level of Quality and Savings Performance

Learn More today at www.ValueAnalysisAdvantage.com Volume 4/Issue 1-800-220-4271 1 Healthcare Value Analysis Management Magazine 22 or Call or email us at& Utilization sales@svahsolutions.com

The Last Word

Tim Ingram

Gaining the Next Level Tim Ingram, MBA/HCM, CMRP

Over the years, we have all experienced many of the mainstream process improvement methodologies, such as, TQM, ISO, Value Analysis, Six Sigma, and the many others that were designed to gain organizational focus.

They have all had challenges with their levels of effectiveness. I am a proponent of anything that generates a relentless pursuit of continuous improvement. Whatever method we use to achieve value, it will certainly deliver, but sustaining and making it part of our culture, that is the challenge.

I use an analogy to explain what it takes to achieve “improvement� to my staff by using the sport of throwing darts. This sport requires focus, practice, and dedication, and the more you focus on throwing at the bullseye the tighter the group will be over time. You might not ever get all the darts in the little red dot, but it will be pretty close. This, to me, is the goal of any process improvement program; get everyone in the organization to throw those darts (products and services) as close to the bullseye as possible (end-state).

Utilization Management is your bullseye and theoretically your darts could represent any of the products and services that exist within the organization. All of the value tools I mentioned before are meant to identify opportunities within the organization, but doesn’t the end-state come first? The end-state goal should define what it is the team wants to achieve. If the team is not involved in formulating the target, plan, and goal, buy-in will be hard to achieve.

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The Last Word

Tim Ingram

It takes the whole organization to make this happen. You want to rack and stack the opportunities and build a standard for identifying prospective wins and tracking progress throughout the organization. I am a fan of “cherry picking”; this achieves those quick wins and it generates that inertia and creates positive energy throughout the organization. Be careful in this selection, that first project should not be painful. One of my favorite products to start with is exam gloves. They are used throughout the system and getting participation in the product reviews is easy. Building a solid foundation within your value driven processes is critical to future successes. As the processes are built, simplicity is a key word. As managers, we can’t overanalyze. Sometimes the solution is simple and sometimes it is not, but we can’t apply a cookie cutter mentality to everything that involves Value Analysis or we can fall into the Paralysis by Analysis trap.

Utilization Management reveals everything about how a product is used in the delivery of care throughout the system. I can’t count the number of times that a new pricing agreement was awarded only to see costs dip one to two percent because we did not include a process to control the use of these products like gloves, O2 sensors, BP cuffs, SCD sleeves, IV start kits, and suture removal kits. This list is endless and they all have a common denominator. There was no system-wide process for supply usage within the standards of care. Utilization Management is achievable and is a smart and intuitive process that reveals millions in cost reductions. The part that makes it so valuable is that the need to change products isn’t always necessary.

My last word in the area of Utilization Management is to include a Strategic Resource Management program with your vendors. This is a perfect complement to a successful value driven program, since vendors need to be part of constructing a successful and sustainable program. These partnerships should share in the responsibility of your organization’s clinical and financial end-state goals…..it’s a win-win scenario.

Tim Ingram is a senior Supply Chain Professional with over 36 years’ experience within healthcare. He served in the United States Air Force for 24 years as a Materials Management Professional and was stationed in Europe, Southwest Asia, and the United States. He has held various positions within both large and small facilities and has successfully guided teams to benchmark results throughout the many areas of supply chain. He is currently living in Colorado and is an independent contractor and consultant. You can contact Tim with your questions or comments at Timothyingram6829@comcast.net.

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Finally, A Proven System That Engages Clinical Department Leaders to Save Money in Supply Utilization Why Do Clinical Departments Need Only Clinical Departments Can More Proof Than Just Total Spend? Control Their Clinical Departmental Supply Utilization Supply and Value Analysis Managers have been challenged with providing evidence to show where clinical departments’ supply utilization is running over. Normally, when the utilization overrun is brought to the clinical department managers’ attention in the form of spend totals, their first reaction is that patient volumes or acuity was high for the period. That is where the conversation usually ends and that is where huge dollars are tied up in your hospital’s supply chain. How do we provide the proof clinical departments need when it comes to supply utilization?

Clinical Departments Are Not Cost Management Adverse Clinical departments are not cost management adverse.

On the contrary, they will help manage utilization costs but require solid evidence when it comes to their major and minor product category overspends. Supply and Value Analysis Managers have been able to keep costs low for many years with various value analysis and contracting strategies but there comes a time when the clinical departments must learn where they need to do better.

Clinical departments have traditionally managed the supplies that are used for care on their patients but they have been doing this without a solid reporting system to tell them where they can do better based on patient volumes and acuity. With a system in place, clinical departments can now visualize all of their major supply categories and make the necessary adjustments which in turn will save big dollars (11% to 23% supply utilization savings per clinical department) for the hospital.

$3.8 Million for 350-Bed Hospital Recently, a 350-bed hospital reported clinical departmental savings of over $3.8 million. Why so much savings? Because they had never taken the utilization reporting to the department level and thus the savings were low-hanging fruit when it was brought to the clinical department leaders’ attention. Clinical Department Utilization Manager software made it easy to pinpoint the exact category in the exact nursing unit and the exact product(s) that were causing the overspend. Prior to this, they did not have any idea where to look or how to prove the savings to the clinical department leaders.

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No More Guessing Where Utilization Savings Are Hiding In Your Clinical Departments

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Goes Beyond Supply Budgets to the Actual Utilization for Each Department by Major Supply Category

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Drill Down to the Exact Product that is Causing Your Utilization Cost Overrun

Sign Up for A FREE Test Drive Today of the Clinical Department Utilization System

www.ClinicalSupplyUtilization.com A Software-As-A-Service brought to you by Strategic Value Analysis in Healthcare, Skippack, Pennsylvania Volume 4/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

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29 Years as a Trusted Leader in Supply Value Analysis and Utilization Savings Strategies—Making Savings Easy for You!

“Time is Running Out” Time to Take the Should-I-Sign-Up-OrShould-I-Pass Test!

Your supply savings budget is locked in place for this fiscal year, but your supply savings haven’t appeared yet. Maybe this isn’t of concern to you...so this offer isn’t going to make a difference. However, maybe it does matter. We’ve prepared this simple test to see if you are ready to move to the next level of savings performance — Just circle YES or NO. 1. You're COMPLETELY satisfied with the savings you have been generating now.

YES

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2. Your savings yield on each and every project couldn’t be better.

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3. Every group purchasing contract is working like gangbusters to save money.

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4. Your contract compliance rate is close to 100%.

YES

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5. You know that you have the latest, cost-cutting software to save money.

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6. You face ZERO pressure to reduce budget expenses beyond 1% to 2% annually. YES

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7. Everyone in your organization accepts your cost proposals, without question.

YES

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8. Your department heads and managers don’t need evidence to change.

YES

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9. Time is on your side when it comes to making your expense budget for FY 16.

YES

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10. Your value analysis teams are generating all the savings that you need this FY 16. YES NO

RESULTS: If you see a bunch of NOs circled, it’s clear that you NEED to sign up for a no-cost, no-obligation “test drive” of Utilizer® Dashboard to ensure that you can make your expense budget each and every year!

Call or Email Strategic Value Analysis in Healthcare Today for a FREE Test Drive!

Volume 4/Issue 1

800-220-4274 orHealthcare Visit Value www.Utilizer-Dashboard.com Analysis & Utilization Management Magazine

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