Healthcare Value Analysis & Utilization Management Magazine - Volume 6 Issue 1

Healthcare

Volume 6/Issue 1

Leading Cost and Quality Strategies for the Healthcare Supply Chain

Magazine

Featured Article:

Nursing & Supply Chain Partnership to Reduce Variation in Urology Catheter Management

www.ValueAnalysisMagazine.com

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

1

The

RIGHT TOOLS make all the

DIFFERENCE

Advanced Value Analysis & Supply Utilization Tools to Improve Quality While Reducing Costs An advanced reporting system specifically designed to do a particular task, a job that would be a lot tougher to do without it.

Now the right tools for advanced value analysis & supply utilization management are here: The customizable UtilizerÂŽ reporting engine is designed to help you quickly and effortlessly uncover and resolve savings while meeting the quality challenges in your supply chain .

This unique system is built on a powerful reporting engine that has shown countless successes in the real world of supply utilization and value analysis management.

Volume 6/Issue 1

www.SVAHSolutions.com

Healthcare Value Analysis & Utilization Management Magazine

2

Contents

Healthcare Value Analysis & Utilization Management Magazine

4 FROM THE PUBLISHER’S

Healthcare Value Analysis & Utilization Management Magazine is published Bi-monthly by SVAH Solutions®

DESK

By Robert T. Yokl

Gaining Recognition for Value Analysis

P.O. Box 939, Skippack, Pa 19474 Phone: 800-220-4274 FAX: 610-489-1073

6 FROM THE MANAGING EDITOR’S DESK

bobpres@ValueAnalysisMagazine.com

By Robert W. Yokl

www.ValueAnalysisMagazine.com

Valuing the Vendor Side of Value Analysis 8 FEATURED ARTICLE Nursing and Supply Chain Partnership to Reduce Variation in Urology Catheter Management at Sanford Health

————————————

Editorial Staff Publisher Robert T. Yokl bobpres@ValueAnalysisMagazine.com

————————————

16 CLINICAL VALUE ANALYSIS

Managing Editor

By James Russell

The Progression of Value Analysis

24 UTILIZATION MANAGEMENT

By Robert W. Yokl

Robert W. Yokl ryokl@ValueAnalysisMagazine.com

————————————

Senior Editor Patricia A. Yokl

Successful Green Value Analysis

————————————

29 EVIDENCED BASED VALUE ANALYSIS

By Gina Thomas

Danielle K. Miller

If Value Analysis Needs an Overhaul, What Should Clinical Decisions Look Like?

38 THE LAST WORD

By Arnold Chazal and Lana MaKhanik

How Leading Hospitals Gain the Best Value From Optimized Inventory Management and Supply Spend

Volume 6/Issue 1

Editor and Graphic Design

Copyright 2018 SVAH Solutions. 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 e-mail 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.

Healthcare Value Analysis & Utilization Management Magazine

3

From the Publisher's Desk

Robert T. Yokl

Gaining Recognition for Value Analysis Robert T. Yokl

One challenge value analysis practitioners face in 2018 is the nonuniformity of their value analysis programs.

As James Russell puts it in his Clinical Value Analysis article this month, “If you’ve seen one VA program, you’ve seen one VA program.”

“If You’ve Seen One VA Program, You’ve Seen One VA Program.”

James Russell, RN-BC, MBA, CVAHP

This isn’t a good thing!

If value analysis is to be considered a profession worthy of recognition by our peers in other disciplines (e.g., accounting, legal, and medicine) it needs to have a shared philosophy, principles, and uniform practices that can be documented, trained, and then replicated vs. winging it.

Can anyone tell me what these shared values are now?

More importantly, if we as an industry follow the classic philosophy, principles, and practices developed by Larry Miles, the father of value analysis, we will have an excellent starting point for becoming the profession that we are all shooting for now and in the future. To save you some time and research, here are some of Larry Miles’s beliefs on these topics: • •

•

Philosophy of Value Analysis: Value analysis is the study of function. However, most people only look at a product, service, or technology’s aesthetics, not its reason for being (function).

Principles of Value Analysis: The more one understands the function of a product, service, or technology, the more opportunities arise from dramatically reducing the cost by substituting and/or in some cases eliminating an element of a product, service, or technology with an equal or better product, service, or technology.

The Practice of Value Analysis: By performing a functional analysis on all new and existing products, services, and technologies that you are currently buying, the approach will shed light on new savings and performance improvement opportunities.

The good news is that each issue of the Healthcare Value Analysis and Utilization Management Magazine replicates the classic tenets of value analysis. If you closely follow our contributors’ articles you are well on your way to the uniformity and professionalism I just talked about.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

4

Saves Big Dollars and Makes Sense

23% to 46% of All Contract and VA Savings Fall Through the Cracks and Most Organizations Don’t Know It Is Happening Let Alone Why SupplyValidator™ is a major breakthrough in how we validate the savings that are put on your savings reports. With most CFOs now scrutinizing and reducing budgets accordingly with these manual line item spreadsheet savings, it is imperative that all dollars documented now be audited for certainty. Yet, supply chain does not have the time nor the staff to continuously audit savings once a year let alone on a continuing basis. However, it is necessary for these audits to happen in order to capture variances to the line item savings reports, otherwise the savings just disappear without any action taken. Enter, SupplyValidator™! This utilizes a unique volume centric system to capture the actual results and goals associated with any and all savings. Plus, you can view more than high level results to find out what is actually happening when a savings does or does not meet your goals and objectives.

The SupplyValidator™: 

Holds Your Vendors Accountable for their Promises and Guarantees



Eliminates Countless Hours, Days, and Weeks Trying to Manually Audit Savings Over and Over Again



Recovers Major Savings That Have Failed to Materialize from the Original Contract/Initiative



Uncovers Major Positive Gains on Initiatives that You Never Knew Were Happening



Automatically Validates Any and All ROI through the Life Cycle of your Contracts

Learn More About SupplyValidator™ Today www.SupplyValidator.com

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

5

From the Managing Editor’s Desk

Robert W. Yokl

Valuing the Vendor Side of Value Analysis Robert W. Yokl

Having worked in the healthcare supply chain for over 25 years, I have seen how sales representatives could be viewed as the evil empire but also how they can be thought of as valued partners in the success of the organization, even thought of as friends (I have seen the hugs at conferences). Most look at the representatives as somewhere in-between, but for some value analysis and supply chain professionals those 1% of bad sales people who were too pushy, arrogant, and just outright unprofessional are all too fresh in their minds. This is a difficult hurdle to jump over when most sales representatives are truly professional and care about their customers, but the bad reps have caused a litany of distrust that will take years (maybe never) to dissipate.

For years, vendor sales representatives have been looked upon as a necessary component in the healthcare supply chain, though not always trusted or thought of as a true partner in the success of value analysis or supply chain. Though, without sales representatives we would find it impossible to do business, as they are the conduits for their company’s communications to their customers. So, what is the answer for turning the tides on the stigma of distrust?

We must look for a new level of partnership with our sales representatives that starts with our value analysis teams. Yes, we need to involve sales representatives in our value analysis teams more as valued advisors and of course experts at their product lines to assist in finding lower cost alternatives that meet the cost, quality, and outcome goals of our value analysis teams. How do we do this?

First, you don’t want to offer any sales representative a permanent seat on your value analysis team but there will be times that you want them to be part of the value analysis process to provide an expert view on their products. This will be especially needed when there is a lack of evidence on new products and you must further rely on the sales representative. They will also be needed if you are having problems or reviewing utilization while you are in a contract period, so they can help you find winning cost, quality, and outcome related product alternatives. So, why not use them as an advisor?

This may be new thinking for many of you, or maybe not, but in the new realm of value analysis in the healthcare supply chain we must think and do differently than we have in the past. We must start to build a new level of trust with our sales representatives to further our cost, quality, and outcome goals.

On the other side of the coin, sales people will need to up their game and try to be valued advisors to value analysis professionals and the teams they facilitate. The time of give and take of VA and sales representatives must end and a new win/win era must begin.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

6

What is Value Analysis?....It’s All About Perspective

Learn How to Get More Value Out of VA at the Value Analysis Academy Now Open! at www.ValueAnalysisAcademy.com Volume 6/Issue 1 Healthcare Value Analysis & Utilization Management Magazine 7

Featured Article

Sanford Health

Nursing and Supply Chain Partnership to Reduce Variation in Urology Catheter Management at Sanford Health Diana Berkland, PhD, RN—Vice President, Nursing & Clinical Services, Sanford Health; Erica DeBoer, MA, RN, CCRN-K, CNL- Clinical Nurse Leader, Sanford Health; Tom Harvieux MSc— Senior Executive Director, Corporate Supply Chain Management, Sanford Health; Andrew Hogan BSc - Associate Project Manager, Cornerstone Research Group, Burlington, ON

The Importance of Optimizing Urology Catheter Management Optimal insertion and management of urology catheters is an important component of patient care.

Implementation of quality improvement measures have been shown to help reduce variation in healthcare processes and help enhance patient care.1,2 Strategies to promote changes in clinical culture and practice through appropriate urology catheter use, proper catheter insertion and maintenance, and appropriate catheter removal have been recommended by the Centers for Disease Control and Prevention and Agency for Healthcare Research and Quality to improve clinical outcomes such as reducing the incidence of catheter-associated urinary tract infections (CAUTIs).2,3 Standardized processes may also help increase efficiencies in supply chain management by reducing stock keeping units (SKUs) and product waste.4,5 Having recognized the value of a standardized urology catheter practice program, Sanford Health recently implemented an initiative aimed at streamlining urinary catheter use-associated processes and reduction of care variation, while focusing on patient care. Interviews with Sanford staff, representing infection prevention, supply chain management and nursing departments, were conducted to characterize Sanford’s experience with this ongoing initiative.6 Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

8

Featured Article

Sanford Health

Historic Catheter Management at Sanford Health Sanford Health is an integrated health enterprise that includes 4 major medical centers, 2 large community hospitals, 41 critical access hospitals, and more than 250 clinics spanning 9 states, with its corporate location in Sioux Falls, South Dakota. Across the enterprise, management of urology catheters was historically handled on a site-by-site basis. Within and across centers, various clinical practice guidelines and protocols were originally in place to manage catheter insertion/maintenance and to prevent CAUTI.2,7,8 These guidelines did not call for standardized urology products, and so the availability of products within and across the enterprise differed. Supply chain representatives at Sanford indicated that in many cases, when supplier contracts ended, products were replaced on the basis of the local value analysis process.6 Standardization of products was not present across the enterprise, which led to different practices at different sites; product choices and availability often guided clinical practice.6 In the past, efforts in urology catheter practices and management of urology products at Sanford Health were handled on a center-by-center basis. These attempts often focused on managing SKUs or revising local urology catheter policies.

Sanford recognized the importance of developing consistent urology catheter management policies across the enterprise, and was committed to developing internal practice standards designed with the objective of long-term success and sustainability.

Sanford’s Solution to Urology Catheter Management In 2016, Sanford began working to establish an enterprise-wide standardized framework for urology catheter management that was intended to address the historic challenges identified above. The goal of the project was to reduce variation in patient care by standardizing both policies and clinical practice within and across centers. If done correctly, this would naturally standardize products across the enterprise. This goal aligned with the strategic direction for Sanford, as it focused on: • • •

Maximizing patient safety Reducing care variation Improving work flow and efficiency Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

9

Featured Article

Sanford Health

To achieve an evidence-based, reliable catheter insertion and maintenance standardization strategy Sanford sought ways to share knowledge and collaborate with industry partners. Sanford chose to partner with a market leader in urology supplies, Bard Medical (a division of C. R. Bard, Inc.), and implemented the ZERO-IN™ Comprehensive Clinical Solutions Program.9 This program is aligned with the goals Sanford had set for itself, being a data-driven, clinically led initiative which, through product training and education, aims to address key gaps in clinical practice and variations associated with the use of urology catheters. Overall, the ZERO-IN™ Program helped Sanford evolve its culture around policy and product selection at an enterprise-level. It helped promote a change in philosophy, shifting from a situation where products were selected based on local SKU availability, to a situation in which standardized practice patterns help enable a consistent selection of products across centers. This supported the alignment of product availability with institutional clinical standards. Use of Bard products is easily teachable and may help support sustainable practices.

Their products, delivery systems, trays, and procedures are designed to aid healthcare professionals through the catheter insertion process while supporting best clinical practice.9 Collectively, these attributes are designed to help minimize practice variation associated with catheter insertion. 9

Implementing an Enterprise-wide Policy The development and implementation of a standardized urology catheter practice policy required internal collaboration across Sanford Health. This could only be achieved through a cooperative partnership between supply chain, infection prevention, quality control and nursing personnel. Erica DeBoer, a Clinical Nurse Leader at Sanford Health, was dedicated to involving staff across departments, some of whom are acknowledged in Box 1. Ms. DeBoer brought a rich clinical background and trustful relationships with the entire interdisciplinary team. Together, this cross-functional team developed strategies to achieve urology practice standardization, reduce variation in care, and improve clinical practice.

Box 1. Individuals Vital to Program Success Joan Cook, RN Kelli Haessig Sue Hohenthaner, RN Juliana Kollars, RN Lori Meier, RN Melissa Mostad, RN Sharon Rockman, RN Rick Rutherford Kelly Siems, RN Cheryl Simpson, RN Eric Wellnitz Jennifer Wiik, RN

In the early stages of the initiative, and as part of the ZERO-IN™ Program, Sanford and Bard Medical identified gaps in urology catheter practices involving Bard Medical products. This enabled Bard Medical to provide customized product training to Sanford staff. Using this information, Sanford developed a new internal urology catheter management policy to include the entire lifecycle of the catheter, from insertion to removal. This policy was reviewed in detail by Sanford leaders and clinical staff to ensure evidence-based practices were appropriate for facilities across the enterprise. Adherence to the standardized policy developed by Sanford was supported by the ZERO-IN™ Program, which helped Sanford to standardize Bard Medical’s urology products by supporting consistent product selection.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

10

Featured Article

Sanford Health

With the finalization of the policy, Sanford communicated the program across the enterprise to ensure that all staff were involved and informed. Communication played a vital role in the successful adoption of this program, as staff embraced the new patient-centered rationale for adopting the new policies and culture. To ensure effective communication, Sanford used a wide range of media including live education sessions, training materials, in-person meetings, teleconferences, team meetings, email communications, and flyer distribution. Nursing teams were critical in coordinating the introduction of the initiative across Sanford.

The successful development and implementation of the standardized urology catheter practice at Sanford was supported by Bard Medical. The product training and education tools provided by Bard Medical helped Sanford identify practice variation gaps and challenges, which was instrumental for Sanford to develop optimal evidence-based policies.

During the implementation stage, Bard Medical provided product training as well as on-site staff education for clinical and supply chain personnel, and offered suggestions for product rationalization to support the standardized clinical processes that Sanford was seeking.

Achieving Standardized Care It is well accepted that variation reduction is important for the financial well-being of healthcare facilities.10 Further, a single vendor can help improve efficiencies and reduce costs associated with contracting, product ordering, and inventory management.4,5,11 Infection prevention, supply chain, and nursing personnel at Sanford reported that they were able to successfully achieve their goal of creating an enterprise-wide standardized policy for urology catheter practices ranging from insertion, maintenance, removal, and specimen collection.6 Although the policy has only recently been implemented, important benefits are already being observed. These include substantial reductions in the following: • • • •

The number of SKUs, with nearly 74% fewer urology products on the formulary12 Ninety four percent compliance to the urology product formulary in the initial adoption sites12 The number of acute care urology supply vendors has lowered from five to one12 Early evidence of reduction in catheter utilization12

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

11

Featured Article

Sanford Health

According to the Sanford staff, reducing the number of SKUs has led to benefits from both supply chain and nursing perspectives: (i) Supply chain staff have observed an increase in the efficiency and ease of managing product inventory; (ii) Nursing staff have reported improved clinical knowledge on available products.6 A randomized trial by Keleekai et al, has demonstrated that training and education of nursing staff on appropriate catheter use resulted in improved knowledge, confidence, and skills, which may lead to improvements in clinical practices and patient care. 13 A standardized policy and protocol helps nurses make decisions regarding appropriate product use, as fewer products are available. Nursing staff at Sanford have cited the observed benefits of a standardized process in terms of reinforcing the principles and importance of proper aseptic techniques, which may transfer to other areas of care.6 To promote sustainability Sanford will continue to monitor its practices, including: • • • • •

•

Reduced waste resulting from product expiration Decreases in available SKUs Increased formulary adherence Reduction in the number of indwelling catheter days Reduction in overall catheter use Economic benefits associated with standardization

Although the initiative is still in its early stages and data are not yet finalized, Sanford is hopeful that long-term success and the sustainability of early gains will occur through adherence to the standardized policy and product selections. To ensure this, Sanford is focused on continued communication with regularly scheduled follow-up meetings and calls to keep staff motivated. New staff will consistently receive Bard Medical product training and education through the ZERO-IN™ Program, to help address the challenges of nursing turnover. Patient outcomes will continually be monitored to allow issues that require attention to be addressed. If a nurse requests a unique product, clinical nurses and leadership will evaluate the evidence supporting the requested product to determine whether it should be adopted across the entire enterprise.

Any one-off exceptions would require careful consideration to ensure the sustainability of the policies with a focus on enterprise-wide standardization into the future.

Overcoming Hurdles The adoption of a standardized policy across a large hospital enterprise was not without its challenges. The largest hurdle was ensuring that staff across all facilities received appropriate product training and education. To overcome this challenge, various means of effective communication were used to reach staff across the hospital system. This was supported by the leadership team.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

12

Featured Article

Sanford Health

With the large-scale conversion of available products, some staff were initially hesitant about the newly standardized products. Sanford actively addressed these concerns through staff education and transparent conversations about the rationale behind changes in product selections and patient care implications. Product training and education sessions allowed staff to handle the new products and observe their features and benefits. The personnel from Bard Medical played a key role in answering questions and handling these concerns, working to train and support staff with the new products.

Future Perspectives Working in close partnership with Bard Medical as one of their pilot accounts, Sanford’s executive team successfully made use of the ZERO-IN™ Program. Since Sanford’s development of a standardized, enterprise-wide, urology catheter practice policy, there has been a reduction in both product and practice variation at Sanford Health.6 Although there are limitations associated with this report, for instance the success seen by Sanford reflects only the experience of one part of a large integrated delivery network (IDN) as reported by staff, and the benefits of standardized policy and products are not being evaluated in a formal study design, the initial benefits observed are encouraging. Sanford would recommend the ZERO‑IN™ Program to other healthcare systems that are looking to improve product training and education related to Bard Medical urology products, with the objective of reducing variation in clinical practice.6 From the perspective of Sanford employees, the standardized enterprise-wide urology policy, in conjunction with the product training and staff education associated with the ZERO-IN™ Program, helped enable Sanford to improve the consistency of care provided to patients while maximizing hospital efficiencies. 6 In combination, these sustainable improvements will continue to benefit both patients and the healthcare system.

The value of standardization and product training has been widely acknowledged across the enterprise. As a result, the executive team will continue to evaluate other clinical initiatives that may benefit from similar initiatives.

Disclosure: This hospital experience report was sponsored by Bard Medical, a division of C. R. Bard, Inc. DB, ED, and TH are employees of Sanford Health. AH is an Associate Project Manager for Cornerstone Research Group, contracted by Bard Medical Division to conduct the interviews and write the report.

Correspondence: Erica DeBoer, Sanford Health, 1410 W 25th Street, Sioux Falls, SD, 57105-1552, erica.deboer@sanfordhealth.org

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

13

Featured Article

Sanford Health

References for Nursing and Supply Chain Partnership to Reduce Variation in Urology Catheter Management at Sanford Health 1

American College of Emergency Physicians. Quality of Care and Outcomes Management Movement. Accessed at: https://www.acep.org/Clinical---Practice-Management/Quality-of-Care -and-the-Outcomes-Management-Movement/ 2 Gould CV et al. (2010) Centers for Disease Control and Prevention: Guideline for prevention of catheter-associated urinary tract infections 2009. Infect Control Hosp Epidemiol 31(4):319326.

3 Agency for Healthcare Research and Quality (2015) AHRQ Safety Program for Reducing CAUTI in Hospitals . AHRQ Pub No. 15-0073-2-EF 4 Cardinal Health (2012) The business of healthcare: optimizing your supply chain Essential Insights 5

Park KW and Dickerson C (2009) Can efficient supply management in the operating room save millions? Current Opinions in Anaesthesiology 22 242-248.

6 C. R. Bard Inc., Data on file. (2017) Sanford Hospital Experience Interviews of 14 Staff from Infection Prevention, Supply Chain Management, and Nursing conducted Dec. 19, 2016 and Jan. 9, 10, and 16, 2017 by Cornerstone Research Group.

7 Lo E, Nicolle LE, Coffin SE, Gould C, Maragakis LL et al. (2014) Strategies to Prevent CatheterAssociated Urinary Tract Infections in Acute Care Hospitals: 2014 Update. Infect Control Hosp Epidemiol 35(5):464-479 8 Zubkoff L, Neily J, King BJ, Dellefield ME, Krein S et al. (2016) Virtual Breakthrough Series, Part 1: Preventing Catheter-Associated Urinary Tract Infection and Hospital-Acquired Pressure Ulcers in the Veterans Health Administration. Jt Comm J Qual Patient Saf 42(11):485-AP2 9 Bard Medical Division, Data on file. (2015) ZERO-IN Comprehensive Clinical Solutions Brochure.

BMD/TRAY/0815/0002 10 Smith F (2012) Bone products in surgery: a blueprint for standardization. AORN Journal 95 (2).

11 McKesson (2001) Achieving operating room efficiency through process integration. Healthcare Financial Management 12 Sanford Health (2017) Internal data on file. Data obtained through INFOR item master.

13 Keleekai NL, Schuster CA, Murray CL, King MA, Stahl BR et al. (2016) Improving nurses’ peripheral intravenous catheter insertion knowledge, confidence, and skills using a simulationbased blended learning program: a randomized trial. Simul Healthc 11(6): 376-384

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

14

Join an Elite Group of Value Analysis Professionals Networking — Best Practices — Data Sharing Member Forums — Education — Mentoring

What Are Members Saying About AHVAP? “Great networking forum!”

“I found the AHVAP Foundation and conference very helpful for me to become successful and more resourceful as a Value Analysis professional.”

“Value Analysis in Healthcare has become the ‘go to’ resource for identifying and realizing savings as evidenced by the sheer number of new conference attendees at AHVAP 2013.”

“AHVAP just keeps getting better and better every year!”

Join or Learn More Today

Volume 6/Issue 1

“So glad that there is education in Value Analysis through AHVAP!” “AHVAP has provided a vehicle to share our daily successes and frustrations.

The networking opportunities at the annual conference are invaluable. I am proud to be a member of our growing organization!”

WWW.AHVAP.ORG15

Healthcare Value Analysis & Utilization Management Magazine

Clinical Value Analysis The Progression of Value Analysis James Russell, RN-BC, MBA, CVAHP, Value Analysis Program Director, UW Health, WI

I have been thinking a lot lately about not only what value analysis is (definition) and how value analysis is done (process), but where value analysis is going (future state). Ours is a strange profession in that there aren’t decades upon decades of lessons learned to draw upon. Being relatively young, at least in the healthcare field, provides us with great opportunities, but also allows an incredible amount of variation in what we all think value analysis really is (our scope). The running joke among GPO consultants is, “If you’ve seen one VA program, you’ve seen one VA program.” There’s certainly truth in that. A strength in our scarcity is that we rely on an immense amount of networking with each other. There are more than 15,000 employees in my health system. I could fit all of the value analysis folks in one car! This “lack of peers” forces us to collaborate with other health systems and that’s a very good thing.

When I encounter people interested in what I do, I often refer them to a couple of sources, one of which you’re reading now. How wonderful is it that an internet search for “healthcare value analysis”

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

16

Clinical Value Analysis

James Russell

turns up, on its first page, a reference to this very magazine? Where else can you find not only the latest issues and topics important to our field, but back issues with great articles…for free? Another source is our professional association, Association of Value Analysis Professionals (AHVAP). This is also a treasure trove of information for those who are not quite sure what VA means. I’ve often told an audience, “You all know what the words value and analysis mean…that does not mean you understand what the profession of value analysis is. That’s like thinking you understand what an industrial engineer does because you’ve seen a factory (industry) and ridden on a train (driven by an engineer). ” I spent the first few years of this career learning about health system supply chain logistics, procurement, materials management, and GPOs. After a few years, I “graduated” to the all-important understanding of the power of utilization. I say “graduated” as homage to one of my early mentors, Todd Bowers from LA County/USC. I was bragging to an audience about a utilization project that exceeded expectations and he said, “Great…you’ve passed value analysis 101!” It irked me. Can you tell I’m a sensitive little snowflake? Okay, that might be a stretch, but you get the point. He was absolutely right. I was beginning to see the value beyond the price tag. Some things, only experience can teach. Try to explain the utilization of products, equipment, and technologies to someone outside of healthcare and their eyes glaze over. Which one of you has the perfect answer to the, “What do you do for a living?” question at a party? Share it with me…please! My answer takes 5 minutes to say and still confuses people.

So here we are, at my 10th year in healthcare value analysis; my 30th year as a Registered Nurse.

Where do I want to see value analysis go? How can we maximize our expertise and translate what we do to people who don’t have time to get into the weeds? Of course, I have some thoughts about this.

Definition First, when defining what VA is, the AHVAP website has a great one that I won’t quote, but here’s a link to it: http://www.ahvap.org/?page=about_ahvap. It’s been updated in the last few years and serves as an excellent source for folks who’ve never heard of this line of work. I use it (and cite it, of course) in presentations all the time. I, however, have also made my own version. This is not to compete with AHVAP (who am I, after all?) but to personalize the definition and perhaps speak to a different audience…healthcare professionals (who I’m usually asking to change their practice).

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

17

Clinical Value Analysis

James Russell

Here’s what I tell them: Healthcare Value Analysis (HVA) is the practice of creating a measurable and sustainable impact upon a health system’s fiscal and quality outcomes. This is accomplished by using data-based decision making techniques to influence unwanted variation. This undesirable variation is identified by suboptimal financial performance, unfavorable clinical outcomes, or both. This variation is recognized by thorough: • • •

Examination of evidenced-based clinical data Analysis of product, equipment, and technology utilization data Scrutiny of objective financial data

A robust value analysis process combines specifics from all three entities to deliver a total package of value. This results in deliverables that encourage objective decision making that is transparent and actionable, and return on investment (ROI) calculating that is impartial and reproducible.

Okay, so it’s a mouthful! One of the things I’m trying to get across is that we’re not all about new products! Sure, we have involvement in them, but that’s not why you pay us to do what we do. You also may notice that I’ve modified the tried and true “Cost, Quality, and Outcomes” (CQO) movement from the Association for Healthcare Resource & Materials Management (AHRMM) 1. This is because I believe Quality and Outcomes can be combined, and I do so in the “clinical data” bucket.

Again, this is not to quibble with the experts, just to put my own spin on it.

1

http://www.ahrmm.org/cqo-movement/ Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

18

Clinical Value Analysis

James Russell

Process Hidden within my definition above is a nod toward the process. I talk about using data-based decision making techniques. Which of us would argue with that? Don’t we all preach about evidencebased practice? Well, in value analysis, data is our evidence. Where I go a little out on a limb is the next phrase: “…to influence unwanted variation.” This is where I want to spend my time, and the rest of my career. It’s the fun stuff.

Value analysis professionals sit in a unique position to be able to understand the three facets of my pie chart: clinical, financial, and utilization data. Clinicians understand their world, finance professionals get theirs, but very few understand the power of utilization. That’s where value analysis folks shine. The variation in who uses what, where they use it, why they use it, how they use it, how many they use, how they compare to what other people use, how they compare to what other health systems use, which suppliers are involved, etc., is why I get excited when telling people what I do for a living. Really, I do!

I have a great example of one of my health systems having the best price in the nation on a particular item…so Procurement has done a great job on the vendor contract. However, we also had the highest utilization of any hospital in the nation…we ought to have the lowest price! Diving deeper, we found that there were health systems many times bigger than ours that used fewer “eaches” of this item annually. What made us so special? Were our patients unique? Not so much. It turns out that through the best of intentions we had protocols in place that encouraged inappropriate use of the widget. By changing our practice (there’s that word again), we were able to shave a cool million dollars off of our annual supply costs without having a negative impact on what the item was used for!

This is why I show utilization as the submerged portion of the iceberg in presentations. It takes a combination of clinical and business knowledge to ferret it out.

More about my process: It takes several dynamics into account…not just looking at costs. As in the example above, if we started to experience negative clinical outcomes, due to our change in practice, that would necessitate a quick re-evaluation of what we were doing. Things can’t happen in isolation.

We can’t save money at the expense of clinical outcomes. We also can’t save the world clinically and not look at our expenses. Hospitals go bankrupt that way. The dance between these variables occurs in the realm of utilization. Again, that’s the fun stuff.

Of late, I have been adding more and more variables to this process, “…to deliver a total package of value,” that I find fascinating. I hope you do, too. I recently began looking at supply cost variation, by surgeon, for a specific operating room procedure. As per usual, I am looking for variation in the data, and then asking, “What are we getting for this variation?” The data fell into different categories: Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

19

Clinical Value Analysis

James Russell



Supply Cost per case: Some surgeons used higher-cost items (staplers) and others did not (sutures).



OR Procedure time: Some surgeons took much longer to perform their procedure than their peers. (This can be a bit skewed by our being a teaching hospital and whether or not there are residents in the room…it takes time to teach!).



Length of Stay: Some surgeons had longer average inpatient lengths of stay (LOS) than their colleagues.



Infection rates: Do faster surgeons have fewer complications? In this case, not so much.



Readmission rates: Do patients who stay longer in the hospital (longer LOS), get readmitted less often? In this case, not so much. This one gets the finance people excited, due to Value Based Purchasing and lack of reimbursement!

There are more (like reimbursement, etc.), but this is a good starting point. Upon examining the clinical, financial, and utilization data, we found some variation. One of our surgeons spent a lot more money on high-cost items (like staplers and reloads) than her colleagues. When asking our question, “What are we getting for this variation?” the answer was…nothing. Her LOS wasn’t shorter.

Her OR Procedure time wasn’t shorter. Her infections, readmissions, and/or return visits to the ED for pain control weren’t less than her colleagues’. She just spent more money. Upon showing her the data, she went, “Oh…I had no idea. I can use fewer staplers and tie knots…I’m good at it. I didn’t realize there was such a difference in cost.”

This interaction reinforced my common reference to the 80/20 rule. If we show practitioners accurate, concise, and meaningful data, 80% will look at extreme variation and change their practice without being asked to. Who wants to be the most costly practitioner with nothing to show for it (no better outcomes)? The other 20% take a little more time to influence. I could go on and on (as many of you know), but I’ll stop here.

Future State Where do I want to see value analysis go? Keep in mind, this is my opinion…by no means is it meant to convey a consensus, a majority, or even hint that anyone other than myself feels this way. I have Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

20

Clinical Value Analysis

James Russell

seen some of my colleagues change their phrasing to value management instead of analysis (another mentor, Barbara Strain at the University of Virginia). I like that. I like the concept of changing the title. I’m not sure it’s where we’ll end up; “analysis” is what I love to do, being a data geek, and “leadership” is usually a better word than “management,” but I like that we’re looking at different terms. I am often critical (nicely) of my customers who rely on TTWWADI as a rationale for being resistant to change. “That’s the way we’ve always done it” is only a good explanation for behavior if that behavior is perfect! Otherwise, it’s just an excuse. We value analysis professionals have to be careful not to fall into that trap ourselves. Looking at our profession with new eyes can only help us improve. Isn’t that what we’re all about anyway?

I’d love to see our profession morph into a position of strength and influence in the health systems we work in. This is not to disparage where we are now, but we could do so much more! I have seen companies with senior leaders called, “Chief Client Officer”, or “Chief Empowerment Officer”, or “Senior Vice-President of Patient Experience”, etc. I’m sure those are interesting and potentially effective roles, but how about “Chief Value Officer”? How much of a return on investment could such a leader show? I think it could be substantial. It’s not, of course, just about a title. It’s about influence. If health system departments had to explain their variation in terms of, “What are we Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

21

Clinical Value Analysis

James Russell

getting for this?” to someone who understood both the business (financial) and clinical worlds, I’m betting significant unnecessary expenses could be avoided and “tons” of waste identified (see what I did there?).

Variation isn’t always negative. Sometimes the explanation is just fine, even if it isn’t logical. If the reason your hospital has 20 different suppliers for spinal implants is that you only have three surgeons and two will leave and go to your competition if you try to narrow the field, pick a different battle to fight! It may not pass the rationality test, but it passes the reality test. Determining if the explanation for variation is credible can’t be left up to the department in question. You can’t leave it up to the orthopedic department to influence the variation in demand by matching implants by themselves. That’s not their core competency. Their job is to do surgery. Hopefully, lots of it! These decisions (giving credibility, or not, to variation explanations) are better made at the senior leadership level with an objective eye.

Last example: Senior leadership is also culpable in making poor decisions. I know of an academic medical center that replaced perfectly good imaging equipment (MRIs, CT scanners) because the newly recruited Chief of Radiology preferred a different manufacturer. That new Chief was gone in two years and they had to recruit another one. Guess what company the new guy wanted? You guessed it, the old company. We have to stop doing things like this. I think a Chief Value Officer could help.

Back to my definition: “…resulting in deliverables that encourage objective decision making that is transparent and actionable, and return on investment (ROI) calculating that is impartial and reproducible.” Another mouthful! This is what I hope the future of value analysis becomes; when we treat our decisions like a researcher treats their clinical trial…we must have objective evidence that provides the same end-results, regardless of who’s running the data. Perhaps then, value analysis (or management) will become an absolute necessity in every health system in the country, and not just a “nice to have.”

James Russell, RN-BC, MBA, CVAHP, is the Value Analysis Program Director at UW Health (the University of Wisconsin). Jim has 3 decades of nursing experience; a third in critical care, another third in psychiatry, and the last 10 years in healthcare value analysis. He’s been in both staff and leadership positions in the for-profit, community healthcare sector, as well as in several Academic Medical Centers. Jim has published dozens of articles on value analysis and nursing leadership, and speaks regularly at national conferences. You can contact Russell with your questions or comments at jrussell@uwhealth.org

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

22

Healthcare Supply Chain Best Practices Podcast

Now Over 250,000 Listens!

•

•

•

•

Generate Actionable Bottom Line Savings Open Up a Whole New World of Savings Beyond Price Lead Your Organization to the Next Level of Supply Chain Performance Give You Solutions and Tools to Save You Time, Money, and Effort

•

Purchase Cost Is Just the Tip of the Iceberg

•

Reining in Your Multimillion Dollar Purchase Services

•

•

•

Comparative Value Analysis Analytics Will Maximize Your Performance 5 Biggest Myths About Healthcare Supply Utilization Management 4 Things to Make Your Cost Management Job Easier

Listen online at http:/www.svahsolutions.com/podcasts/ Or Find Us On ITunes Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

23

Utilization Management

Robert W. Yokl

Successful Green Value Analysis Robert W. Yokl, Vice President/COO, SVAH Solutions

Not that we want to add any more complexity or responsibilities to our busy supply value analysis programs, but one category of purchasing is becoming ever more present in our new and existing contract negotiations and that is the use of green products and services. Let’s face it, hospitals consume a ton of products that are not kind to our environment and create a major amount of waste. Who better to deal with the complexities of the cost, quality, and outcome relationship than the value analysis teams when it comes to green products and services?

There are many paths that this article could take but I thought it would be best to bring in a few experts who have first-hand knowledge of performing green value analysis to give us all some insight.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

24

Utilization Management

Robert W. Yokl

Why is Green Value Analysis Important Today?

Colleen Cusick, DNP, MBA, RN, CMRP, Director of Materials Management, The John’s Hopkins Hospital - Green value analysis is important since the health care supply chain is able to make a visible sustainable impact for our patients, our staff, our hospitals, our local neighborhood, and the wider community. It is an issue of health and safety. Healthcare value analysis professionals can make a difference by promoting sustainable efforts. These efforts can be recommending a reduction in packaging, and eliminating or reducing products that potentially cause an increase in the bioburden of our patients and staff members. They can also make recommendations for sustainable changes but help to ensure that the changes result in products that are clinically acceptable. And it is not just working for more sustainable products, it is looking at the logistics of procuring products. It is looking at the total cost of ownership: does the product have batteries to be disposed of or can the item be recycled or can the item be reprocessed?

Value analysis professionals are positioned to evaluate manufacturers in regard to the manufacturers’ commitments to produce sustainable products. They also give voice from staff and patients to manufacturers of what may need to be changed. The VA staff hear what their clinical colleagues want and what patients want. Some patients do let their concerns be known. So, there are many ways for the value analysis process to be green.

John Strong, President, Greenhealth Exchange - Green value analysis is extremely important for a variety of reasons. In general, I don’t believe that green and sustainable products should cost any more than brown ones, but there are notable exceptions. Take clean, organic, locally, and sustainably grown produce. It usually costs more to produce, for a wide variety of valid reasons. Health care providers should take the lead in this space by using these products versus canned or frozen goods because they can teach patients that fresh products are generally available, have far lower levels of sodium than canned goods, and taste better—all leading to a better, healthier lifestyle for their patients, especially over time. If hospitals in the U.S. are truly concerned about community health, they need to seize opportunities to lead in this area by showing patients how to live healthier lifestyles—not just treat their illnesses when the patients present themselves in the E.R.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

25

Utilization Management

Robert W. Yokl

Alan Weintraub, Chief Supply Officer & Director of Support Services, Enloe Medical Center - While we do look at green opportunities, I don’t believe in segregating or considering a green initiative any differently than any other. I think too often “green” is used as a marketing tool. I prefer looking at the total cost equation of an initiative and letting it stand on its own merits.

Tangible benefits of any type should be represented in the equation.

One of the biggest challenges that we face today is whether we can save money with green initiatives. If we can, they will enter our contract negotiations, bids, and value analysis agendas more often. But, are there other ways to be green other than just buying green products and services? The answer is of course there are and the number one area that is overlooked is just using less products or consuming less. But how do we get there?

If you take notice to Alan Weintraub’s answer above, he does not change his purchasing and value analysis process to cater to any green initiative but does consider them if they are a valued alternative.

I have worked with and observed Enloe Medical Center’s supply chain purchasing over the past 10 years now and have found that the key to their being green is that they have a strong value analysis, standardization, and utilization management program in place. The effect of this is that Enloe is using about 20% to 30% less SKUs than any other hospital in our database (over 300 hospitals & health systems) in size comparisons to volume, spend ratios, and characteristics. The end result, or should I say ongoing results, are that Enloe is creating a natural “green effect” by using fewer products with less variation.

Can You Save Money and Still be Green/Sustainable in the Healthcare Supply Chain World?

John Strong - The key reason that nine leading health systems across the United States formed the Greenhealth Exchange is because no one group has focused on aggregating the volume of truly green and sustainable products to force brown products off the shelf, and bring the price of green products down for everyone through longer production runs, greater institutional and consumer demand, and particularly innovation of better and safer products.

GX has spent the last year working with a major distributor of office products, and we have completely and carefully vetted in a “product formulary” their traditionally purchased office products.

Generally, the contract has saved them up to 10% in aggregate on their purchases, and they have all raised their green purchases in this category from less than 30% to more than 60%. This is exactly the kind of results we want to achieve each time.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

26

Utilization Management

Robert W. Yokl

A new contract GX is just launching for a major product line will universally save our owners and members money, but only IF they change their behavior and convert to the cleaner, greener alternatives that we have placed on contract.

All of the analysis and product vetting is hard work, takes a lot of time, and costs a lot of money.

That’s why healthcare needs a leader in this space—to take a meaningful focus on real value analysis to secure the best available product for the best price. That’s where the collective value analysis judgement of GX, our experts, and our owners come in. We will come back to these products and work hand-in-hand with our manufacturers to further improve the products and reduce the costs of each contract cycle. Product development is not static and harnessing collective purchasing power is the only way to make a lasting difference.

Colleen Cusick - Yes, you can save money and still be green. Sometimes green products may cost less. But, some of the savings may be realized by a reduction in logistics costs by recommending standardization. The value analysis professional can assist by analyzing utilization rates and asking, are we buying the right amount? We can help with supply waste issues.

However, sometimes saving money or being cost neutral can be difficult. Sometimes, you have to make difficult decisions to not make a sustainable change in one area due to increased costs that cannot be supported at that time.

Sometimes, the sustainable products available are not clinically acceptable and should not be considered. The value analysis team can help make these decisions.

Some sustainable product costs have decreased over time. This trend will likely continue as consumers and health care professionals demand safer and more sustainable products.

There are Many Different Ways to be Green There are many ways to be green at your healthcare organization, but what is most important is that you start to consider how you should include green products and services in your value analysis programs and what end results you want to have happen. Remember, there are many ways to be successful, from engaging your group purchasing organization in having green products, creating green value analysis teams, or utilization/consumptions programs for your hospital and/or health system. Sustainability is not going away any time in the future, so it is up to us as value analysis and supply chain leaders how we want to be successful for our organizations.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

27

Sign Up for Your FREE Subscription to Healthcare Value Analysis & Utilization Magazine Today www.ValueAnalysisMagazine.com

•

Best Practices

•

Value Analysis Resources

•

Case Studies

•

Clinical Value Analysis Articles

•

Interviews/Authoritative Opinions

•

Educational Articles

•

Utilization Management Articles

•

Evidenced Based Value Analysis

Click Here to Sign Up for a FREE Subscription Looking for Value Analysis and Clinical Resource Management Jobs?

Take a Look at Healthcare Value Analysis & Utilization Management Magazine’s Job Section www.ValueAnalysisMag.com/Jobs Sponsored by:

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

28

Evidence Based VA

Gina Thomas

If Value Analysis Needs an Overhaul, What Should Clinical Decisions Look Like?

Gina Thomas, RN, MBA, Procured Health Chief Development Officer

Applying More Agility I wanted to follow up from my last interview and provide some context into clinical decision-making processes aided by Q&A style and a few visuals. As a reference to this discussion, clinical decisions should include projects which are often managed in silo through Pharmacy & Therapeutic, Value Analysis, Care Variation, Care Improvement, and a host of other named governance structures. Healthcare is often paralyzed by trying to “get it right” or even perfect, or having meeting after meeting with either the wrong people and/or a lack of decision making. Agility needs to be instilled in healthcare in a bigger way.

Q: Why can’t we adopt an agile approach in healthcare when so many other industries have?

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

29

Evidence Based VA

Gina Thomas

A: Many decisions fall to bureaucracy in healthcare, sometimes with good reasons because we are dealing with life and death issues! However, patient safety and prevention of harm can be upheld without delaying all decisions. To be agile requires an ease to get it done, collaboration, and responsiveness with quick decision making. I will reference a great article by McKinsey below for your pleasure reading. http://healthcare.mckinsey.com/why-agility-imperative-healthcare-organizations

Value Analysis, Clinical Decisions, and Medical Rounds So let’s think about agility specifically in clinical decisions in a similar fashion to how patients are managed through processes such as medical rounds with multidisciplinary teams. Let’s go BIG!

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

30

Evidence Based VA

Gina Thomas

Medical rounds often include the key stakeholders which are routinely a physician, nurse, social worker, nutritionist, and pharmacist at a minimum. This dynamic team is engaged and discusses diagnosis, root cause, current labs and treatments, response to treatments, and goals for the patient short term with an eye towards healing and returning to a highly functioning quality of life. This approach requires each stakeholder to ask questions to receive quality feedback and information about the patient’s condition in order to provide their recommendations. This also facilitates their “part to play” to achieve the desired goals.

What if you were part of an agile team focused on driving care improvement and all the right stakeholders were not only present but incorporated medication and device decisions and were engaged to collaborate, provide all information, ready to act, and had an appetite to learn from failure rather than getting stuck and discouraged from any movement forward?

What if these care improvement decisions were treated like medical rounds where the patient’s outcome depends on that team being focused on agile decision making and not stuck in a mode of either indecisiveness or delays in decisions due to missing stakeholders or information? Important team members don’t skip out on medical rounds or aren’t available for a quick consult barring of course emergencies.

Similar to patient rounding, the current state of patient engagement factors in specifics such as indications, evidence, cost impacts, and utilization which could be reviewed including any serious considerations such as treatment conflicts and comorbidities. Each stakeholder would commit as part of their role in achieving the outcomes by active participation and act in the moment with the previously mentioned information, just like writing a new order on medical rounds for a specific patient.

The “problem” or decision shouldn’t have to lie in an indecisive state. Indecisiveness wouldn’t be tolerated in direct patient care, so let’s apply those same principles here.

Wouldn’t decisions move faster?

Doesn’t that sound exciting to move efficiently and effectively with an overall improvement in the transparency of decisions with comfort that the most informed decisions are made?

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

31

Evidence Based VA

Gina Thomas

Over-processing vs. Action While I’m a big fan of a consistent process, we can over-process just like we can overanalyze. Some specifics in the process are important such as aligning the requirements in agility with the right people and having the best available information.

However, just like in the patient scenario, you may never have all the answers but with the goal of the patient in mind, the team will acquire the best information in order to act and reach the best outcome. In what I have discussed so far, medical rounding would include all clinical decisions, perhaps as an effective route of what we know of today as “patient orders.” These patient orders would then be entered as the actual decision in the EHR to communicate the tactics and outcomes of the decision to the affected clinicians/service line leaders. This triggers the sending of the changes that impact protocols, pathways, formularies, etc., to the correct IT Admin in those respective areas as well with the metrics needed for ongoing measurement.

LET’S DO THIS! Let’s set up the same scenario for clinical decisions including device and medication decisions in an effective structure where the team participating will act based on the problems needing solutions.

To set up your agile medical round type decision-making process for value analysis clinical decisions, the following would be most helpful: What are you trying to do?

Goal: Solve a problem (savings target in a specific service line) or answer a recent request. (Have we seen this medication or device before? Is there a change in the condition?)

• • •

Timing: What is the urgency? Direct patient care impact?

Diagnostic: What is the data we have (clinical indications, evidence)? Clinicians involved?

Conflict of interests?

Obstacles or challenges: Contracts that may influence or have negative financial burden, patient safety/harm, indirect factors such as specific indications for certain patient populations.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

32

Evidence Based VA

Gina Thomas

Simple grids like one referenced below can be effective in sharing unbiased information to facilitate decision making.

Do we have the right team to act and if not, let’s call them now!

What Is the Right Team?

Simple tactics can often engage the right people on the team. For instance, understanding the differences in the FDA classification of devices can help drive the right level of engagement. Class II and III classified devices would be most appropriate to involve physicians. Involving physicians in Class I would likely yield inefficiencies and a waste in clinical resources.

Once you have your goal team, including possible consults identified for each medical round project, let’s get back to our clinical decision-making medical round idea. In your clinical decision-making rounds, can you provide the evidence and outcomes without bias and show the impact of different decisions clinically and financially?

Your team will need to have the following at their disposal, so they can make effective decisions similar to point of care decisions: • • • • • •

Volume 6/Issue 1

Evidence interpretation and summary Evidence analysis comparative Indication analysis and summary Mechanical or chemical properties and attributes Cost effectiveness Reimbursement considerations Healthcare Value Analysis & Utilization Management Magazine

33

Evidence Based VA

Gina Thomas

Real Scenarios Medication utilization: For a patient’s pain control, a nurse brings to a physician’s attention that the current treatment doesn’t seem to be working. The physician may consult the clinical pharmacist who can be a great resource if they have the information at their disposal, including not only effectiveness but indications, alternatives, costs, and reimbursement implications.

Medical product utilization and selection: For this one, let’s think about a decubitus ulcer.

There are so many alternatives in bandages, ointments, creams, and wound vac devices. Often, the wound therapy team is consulted and can be a great resource as well, as long as they have unbiased clinical effectiveness evidence. Not just the information recently provided by a specific company, but an unbiased comparative including outcomes and prices by indication. Are these treatments made in consideration of medications already being prescribed?

If you think about it, a great deal of these decisions are already part of those medical rounds, only perhaps missing some critical information, and they are typically made “patient by patient”. This type of information doesn’t make it to “after the fact” committees who may be reviewing the same class of medications, such as pain meds mentioned in the medication utilization decision/selection or perhaps a new contract for wound dressings as mentioned in the treatment for decubitus ulcers.

Medical rounds are already multi disciplinary and at the point of treatment. Think about the possibilities here for patients. Instead of a committee meeting after the fact or urgent requests needed due to poor processes, wouldn’t this be ideal to review at the point of care and a decision for the healthcare organization as a whole, instead of siloed decisions at the bedside and in a meeting room?

Multi disciplinary rounding can include all clinical decisions that typically take months in committee meetings. Our new culture of transparency among all disciplines on our unit has led to many improvements in the quality of care we provide to our patients.

How Do You Know That Your Decisions Were Effective and/or Sustained?

Just like when a critical therapy is ordered for a patient, the outcome must be measured often with a lab test, X-ray, or some diagnostic. The same can be true as to the effectiveness and desired outcomes of other clinical decisions besides the patient impact alone.

Is your decision making just a “rubber stamp” process? If you treat everything as an urgent problem and act without the right information, you have fallen victim to complacency like this outcome!

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

34

Evidence Based VA

Gina Thomas

This approval process would be similar to a patient telling the physician that the patient “feels” he needs an antibiotic and then the physician ordering it without an exam or other relevant diagnostics.

If that were the case, why would we even have antibiotics as a prescribed medication versus just over the counter if the patient can decide? There are consequences of overprescribing and antibiotic resistant bugs prevailing, so we need guidelines.

In the case of clinical decisions for value analysis processes, a rubber stamp approval situation also has negative consequences such as a drop off in stakeholder engagement and indecisiveness.

Results: Increased costs, wasted time and effort, and ineffective patient care.

To facilitate key stakeholder involvement, efficient decision-making processes are required. We want to avoid this scenario of decisions taking over three months!

Rounding Out This Topic All clinical decisions including medication and device decisions require the same rigor as established medical rounding and governance processes and can be achieved with an engaged multi-disciplined team with the flexibility to consult other stakeholders within 24 hours.

Key components required: • Committed multi-disciplined team with the openness to consult others • Data and more data that is understandable and not paralyzing • Evidence that can be applied in practice • Metrics that are relevant to the patient, the process, and the financial results • Open communication and the commitment to make a decision, dig into the root cause when errors happen, and establish preventative tactics for avoiding reoccurrence or errors Stay tuned for our next topic where we will profile utilization tools.

Gina Thomas, RN, MBA – As Procured Health Chief Development Officer, Gina spearheads commercial strategies and helps guide product vision. With over 35 years of healthcare experience, starting as an emergency room nurse and later becoming a nursing executive, she brings a wealth of knowledge to the company, including strong expertise in preparing for new payment models, aligning clinicians, service line best practices, and executive-level approaches to resolving fragmentation in healthcare. She is passionate about patient advocacy. On a personal note, she has been married 32 years; has 2 daughters who she adores; and she says they have even found great guys who they married!

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

35

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

36

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

37

The Last Word

Chazal and Makhanik

How Leading Hospitals Gain the Best Value From Optimized Inventory Management and Supply Spend How the Right Metrics, Combined with the Right Inventory Management Technologies, Ensure Accurate Data Collection and Analytics that Enable Providers to Optimize Their Inventory and Supply Spend Arnold Chazal, CEO, and Lana Makhanik, COO, VUEMED

The Problem: Inadequate Metrics and Poor Inventory Management Tools Typically, supplies and devices represent the second largest line item in the budget of most hospitals’ specialty procedure or interventional areas (ORs, Cath Labs, etc.). Yet, in the majority of organizations, the management of these pricey supplies is the responsibility of each individual department, which too often has inadequate inventory management expertise, resources, processes, tools, and technologies to enable it to perform well and get measurable results.

Moreover, hospital supply chain organizations have traditionally focused on basic inventory management metrics or measurements (e.g., turnover, order fulfillment), or financial metrics (e.g., % supply cost per patient discharge) to guide them in the control and management of their stock.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

38

The Last Word

Chazal and Makhanik

However, these metrics largely fail to show the subtle and informative data that can affect change and reveal opportunities and symptoms of not-so-readily visible issues that could otherwise be addressed. These metrics are also typically focused on the supplies perpetually managed by the supply chain organizations, which include med-surg products, and typically exclude specialty (aka “non-stock” or “physician preference or PPI”) items utilized by the surgical and other procedural departments. Also, typically, the majority of metrics in use are not geared towards reporting the intimate connections between supplies and performance, such as how the spend on specialty items is actually serving the corresponding departments’ needs, or how to quantify the opportunities for supply optimization and consolidation.

The reason for the lack of true guidance from metrics also finds its root in the data itself that feeds the metrics which often is incomplete or not fully reliable, and thus taints the overall information and its true meaning. As a result, the right metrics must also be used in conjunction with an automated inventory management technology that is proven to capture, timely and accurately, all relevant information about products (product ID, lot/serial number, and expiration dates), their deliveries, availability on the shelves, and exact usage for patient care, down to each individual item.

Asking the Right Questions How are our supply purchases supporting the changing case mix and volume? How quickly are unused or obsolete items being identified and substituted? How effectively are expiring items being identified and removed? How well-aligned are purchases with the actual clinical need? These are some of the key questions that diligent specialty procedure departments seek the answers to in order to improve their ability to make effective decisions and undertake results-oriented change.

Applying the Right Metrics To develop a truly successful inventory management program, departments must use metrics and techniques that provide meaningful data that is directly related to making well-informed decisions and taking strategic actions aligned with their inventory optimization objectives. Some metrics and their objectives that are particularly helpful include: •

Expiring or expired inventory as a percentage of on-hand inventory value – for expiration management.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

39

The Last Word • • •

Chazal and Makhanik

Unused inventory as a percentage of on-hand inventory value – for inventory excess reduction.

Purchased inventory vs. consumed inventory over the same time period.

Ratio of consumed to added inventory and dollar value of inventory purchased compared to case volume and consumed inventory – for purchase reductions.

Case Studies from Leading Hospitals In the course of providing RAIN RFID and barcode scanning technologies to specialty procedure and interventional departments to manage their clinical inventory, we have accumulated data that illustrates the ways in which these hospitals’ inventory optimization and bottom line objectives have been achieved using such metrics and benchmarks.

For example, one key objective for these departments is waste reduction and the elimination of expirations. A key metric for achieving this objective is to examine expired inventory as a percentage of on-hand inventory value. Using our software, an Interventional Radiology department at a large teaching hospital in Washington, D.C. ran weekly reports using this metric and was able to decrease its expiring inventory by 95%, from ~10% of its on-hand inventory value in 2013 to <0.5% by 2016.

Another case study at a GI department in a large urban teaching hospital in New England showed the achievement of expired inventory levels being maintained at less than 5% of the total inventory value over a 3-year period, again due to their use of the expiration tracking reports which provided the data to identify and monitor slow-moving and obsolete inventory. And at a large teaching hospital in New York, both the Interventional Radiology (IR) and the Cath Lab departments showed significant waste reduction: The former maintained its expiring owned inventory at below 1% of its total inventory value over an 18-month period and the Cath Lab reduced its expiring owned inventory to <0.5% of its total inventory value, as measured over a 6-month period.

Another key goal for specialty procedure and interventional departments is the reduction of supply costs, measured as a reduction in purchases, and then the subsequent maintenance of a lean inventory in line with consumption needs. We have observed that supply purchases typically tend to be higher than supply utilization by anywhere between 20% and 40% (in $ value) over a given period of time, without any changes in case volumes or mix – leading to overstocking, accumulation of excess, and waste.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

40

The Last Word

Chazal and Makhanik

When departments systematically collect data to measure purchased versus utilized value, as well as unused inventory as a percentage of on-hand inventory value, they are able to identify specific purchasing behaviors and usage patterns that lead to bloated inventory levels.

These metrics guide the decision-making process to streamline the inventory and establish correct par levels for each SKU that corresponds to the actual documented usage patterns. This process identifies the opportunities to correct outdated or flawed buying patterns, and adjusts purchasing contracts and/or consignment programs to the actual reality and needs of the clinical departments to serve them better.

Our case study at the IR department in D.C. mentioned above also showed that from 2013-2016, it decreased its value of on-hand owned inventory by nearly 50% following the implementation of our inventory management system and the use of metrics as a technique to monitor and improve financial results. Similarly, at the New England GI department described above, there was approximately a 15% decrease in on-hand inventory value in less than 6 months. And the New York State IR department above saw a 17% decrease in on-hand inventory value over the 18-month case study period.

The Cath Lab at this same New York hospital showed consistently higher consumed versus purchased inventory value each month, while supporting a ~4% increase in case volume, resulting in an ~11% decrease in on-hand inventory value within 8 months. Finally, a Vascular OR department in a New England hospital was able to increase their on-hand inventory by only 87% while increasing their case volume by nearly 200% and their supply utilization by over 120%.

Conclusion These and other key metrics and benchmarks provide actionable data that, together with effective inventory management solutions and data collection tools, enable specialty departments to achieve their inventory optimization and cost savings objectives.

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

41

The Last Word

Chazal and Makhanik

Arnold Chazal is the CEO and Co-Founder of VUEMED, a global healthcare Information Technology company committed to providing innovative and transformative technologies to healthcare organizations, such as VueTrack-RF, VUEMEDâ&#x20AC;&#x2122;s RAIN RFID technology.

He has built VUEMED as a Software-as-a-Service (SaaS) company, the focus of which is to help hospitals and medical product/device manufacturers improve their performance and data accuracy throughout the healthcare supply chain, from manufacturing to point of care. Prior to VUEMED, Arnold was a Founding Partner at the medical market research and consulting firm Kieris Solutions and spent 12 years in the management consulting and business intelligence industry, providing strategic advice, technology implementation, and lean process improvement solutions to Fortune companies, primarily in the healthcare field in the U.S. and Europe. He holds a B.A. from Nanterre University in Paris and a J.D. from the University of Sorbonne Law School, and completed graduate studies at Oxford University and Harvard Law School.

EMAIL: achazal@vuemed.com; TEL: 239-784-8292 VUEMED is based in Seattle, WA www.vuemed.com Lana Makhanik is the COO and Co-Founder of VUEMED. As its Chief Operations Officer, she is responsible for overseeing Implementation and Support Service teams and ensuring quality control in the execution and delivery of VUEMEDâ&#x20AC;&#x2122;s services. Lana works closely with key customers and partners, including clinical, financial, and supply chain leaders. She has also been involved with industry-wide supply chain initiatives through such organizations as the Association for Healthcare Resource & Materials Management (AHRMM) and Strategic Marketplace Initiative (SMI). Prior to VUEMED, Lana was a Founding Partner at the medical market research and consulting firm Kieris Solutions for eight years, where she focused on process optimization, organizational mapping, customer values alignment, benchmarking, and best practices research. She has evaluated numerous technologies and product opportunities in the cardiovascular, urology, and gastroenterology fields of clinical practice, for clients such as Cordis (J&J), Bard, Boston Scientific, and Medtronic. She holds a B.S. in Cognitive Science from Wellesley College.

EMAIL: lmakhanik@vuemed.com; TEL: 617-216-7749 VUEMED is based in Seattle, WA www.vuemed.com

Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

42

Advertise in Healthcare Value Analysis & Utilization Management Magazine!

Want to Reach 

Over 2,300 Value Influencers and Facilitators of hundreds of millions of dollars in supply product /device decisions



Over 8,000 Web Hits a Month



Top Level Supply Chain and VA Leaders



A Whole New Level of Brand Recognition

Learn more or download the media guide here

www.ValueAnalysisMagazine.com/Advertise/ Healthcare Value Analysis & Utilization Management Magazine

Volume 6/Issue 1

43

Your Vendors Don’t Want You to Hear About Lost Savings

Your Vendors Don’t Want You to See Any Lost Savings Your Vendors Don’t’ Want You to Speak About Lost Savings

Isn’t It Time You Hold Your Vendors Accountable?

Because Your Vendors Would Prefer to Keep You In the Dark as to the Real Results that Their Products and Services May or May Not Deliver!

Learn More About SupplyValidator™ Today www.SupplyValidator.com Volume 6/Issue 1

Healthcare Value Analysis & Utilization Management Magazine

44