Healthcare Value Analysis & Utilization Management Magazine - Volume 6 Issue 3

Volume 6/Issue 3

Healthcare

Leading Cost and Quality Strategies for the Healthcare Supply Chain

Magazine

Value Analysis Leadership CHOPtimize™ Value Analysis Program Management Team at Children’s Hospital of Philadelphia

www.ValueAnalysisMagazine.com

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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

Cost and Quality Aren’t Mutually Exclusive

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

Is Value Analysis about Cost or Quality?

29 EVIDENCED BASED VALUE ANALYSIS

By Gina Thomas

Quality and Cost; Why is this So Challenging?

————————————

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

14 FEATURED ARTICLE—VA Leadership Interview Matthew Rutberg, Program Manager, Value Analysis Children’s Hospital of Philadelphia

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Managing Editor Robert W. Yokl ryokl@ValueAnalysisMagazine.com

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19 CLINICAL VALUE ANALYSIS

Senior Editor

By James Russell

Patricia A. Yokl

The Value of Mentoring

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28 UTILIZATION MANAGEMENT

By Robert W. Yokl

Danielle K. Miller

How to Use Clinical Supply Utilization Management as an Alert System for Quality Improvement

33 THE LAST WORD

By Brian Reed, Founder & CEO of Ascendo, Inc, Chicago, IL

Is Your Data as Clean As Your Steel? Finding the Next Savings in Surgical Instrumentation

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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: 800-2204271 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

Cost and Quality Aren’t Mutually Exclusive Robert T. Yokl

If two things are mutually exclusive, they are separate and very different from each other. Obviously, you might think that cost and quality fit this definition. Yet, cost and quality can be compatible when a value analysis practitioner uses the formula of Function/Cost = Best Value. This best value formula assumes that if the product, service or technology being studied meets the customer’s functional requirements reliably and at the lowest cost it then meets the standard or quality for the job it is required to do.

If you asked a room full of people to define what quality means to them, you will come up with a dozen different definitions. I know this to be a fact, since when I’m teaching a value analysis course I always ask this question and I have never gotten even two definitions that where the same. This is because quality is in the eye of the beholder or customer.

That’s why value analysis is so powerful, since it enables you to measure what is important to your customer in their products, services and technologies by incorporating both cost and quality measurements into their decision making.

In our value analysis teaching, we emphasis that only your customers can decide on the cost and quality of their ideal product, service or technology. They will know it when they see it, based on their functional analysis. For instance, the function of a petri dish is to “hold cultures”. Its required features are that it be round, plastic, 100 x21 mm, and lid w/air vent. Once the petri dish is bid with these functional specifications you should be selecting the lowest qualified bidder for this commodity. This will then assure you of the best cost and quality for this petri dish.

As you know, the highest cost product, service or technology isn’t always the commodity with the best quality. Nor, is the lowest cost product, service or technology always considered to have the lowest quality. All you need to do is read one issue of Consumer Reports to see this concept in practice. That’s why you need a process like value analysis to determine for you and your customers what are the best cost and quality products, services and technology for their intended use. I can’t think of another methodology that can provide you with these answers.

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Â

Sometimes It’s Hard to Ignore What An Automated System Can Do for Your Supply Chain Organization

Volume 6/Issue 3

www.SavingsValidator.com

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From the Managing Editor’s Desk

Robert W. Yokl

Is Value Analysis About Cost or Quality?

Robert W. Yokl

The theme of this issue is all about cost and quality. I have had debates with some of my fellow AHVAP members regarding which is more important, cost or quality. The majority of the answers were “Quality” was more important than “Cost” when it comes to clinical value analysis. If the majority ruled here it would be a slam dunk, right? I am going to be a bit bold and say, that I don’t think we are in a race for either, cost or quality to be the winner when it comes to clinical value analysis. They are both tied to each other, you can’t have lower cost without maintaining quality and you can’t afford good quality unless you have good cost controls.

Remember, value analysis was founded on the principles and methods of functional analysis and is still a system that we in healthcare use to look at the functions of products, services and technologies to find lower cost alternatives with equal or better quality. You see, quality is a given in the value analysis world as you can’t have good quality if the product does not meet the end user’s functional requirements. If we meet the functional requirements exactly, then we will meet our quality goals exactly as well.

The Cost and Quality theme of this issue aligns perfectly with our Value analysis Leadership Cover article with Mathew Rutberg who is the Program Manager of Value Analysis at Children’s Hospital of Philadelphia (CHOP). First off this is our first magazine with actual value analysis practitioners on the cover and it is with good reason that I chose Matt and his Value Analysis team from CHOP. I had the opportunity to work with Matt and the CHOP Supply Chain & Value Analysis Teams on their highly successful cost reduction effort that they had a few years back. I saw that he had a different approach to value analysis which I felt would be great for this unique interview. Matt understood that CHOP’s Value Analysis Program had been in place for several years prior to him taking it over and that with many different leaders and practitioners involved it had lost its way in the cost and quality world.

Matt, utilizing his unique perspective as well as his Lean and Quality Management background was not easily swayed to one approach to VA or another. He realized that CHOP’s Value Analysis Program needed to think differently and do differently otherwise they would just be getting the same results as his predecessors.

In the interview you will see how Matt, using a customer centric and clinically integrated strategic planning approach, was able to not only improve the quality of the value analysis program but bring about coordination with the contracting and sourcing for CHOP to gain the next level of savings & quality improvement. This may be one of our longer interviews, but I guarantee you it will be worth your time to read it!

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The Value Analysis Academy Presents

Cer fied Value Analysis Advisor Program Finally a Value Analysis Certification Program For Supplier Professionals to Add Value to the Healthcare Value Analysis Process When Customers See You Wearing Your Cer fied Value Analysis Advisor™ Label Pin, They Will Recognize that You Know Value Analysis and Can Assist Them With Their Evalua ons

Robert T. Yokl, Exec. Dir.

For the past 31 years we have been training hospital value analysis and supply chain professionals as well as their teams, physicians and line employees in the methods, processes and systems of value analysis to great success. But I always thought their was a major component that was not being addressed that was mission critical to the success of any and all value analysis programs. That component is the training of the sales professionals to be trusted advisors to hospital VA processes.

In order to close the loop on this major hole in the healthcare value chain, we created the Certified Value Analysis Advisor Program. This is a program that will make the value analysis process better for hospitals and their value analysis teams. Why? When you walk through your hospital client’s doors and they see you wearing your the CVAA lapel pin, they will know that you can add value to their VA process and be a trusted part of the VA Team.

With being properly educated/certified in the VA process you can assist your client organizations to reach the ultimate Cost, Quality and Outcomes results, faster, better and easier.

They can finally rely on you to be part of their team instead of a questionable outsider.

To Learn More and Get Cer fied Today! https://valueanalysisacademy.com/certified-value-analysis-advisor/ Volume 6/Issue 3 Healthcare Value Analysis & U liza on Management Magazine 7

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Volume 6/Issue 3

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Evidenced Based Value Analysis

Quality and Cost; Why is This So Challenging?

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

Does quality drive costs or do costs drive quality?

Costs = the amount that is paid to purchase something This is an old topic that should be worn out. We have yet to conquer it.

Quality = an essential character of person, place or thing Quality isn’t just an effect of the function and features but how it’s used. In the case of healthcare, indications should be considered for the benefit to the patient.

I’m not going to belabor the point but let me mention a few trends that indicate fundamental problems with the current state of healthcare in the U.S.  Land of plenty – We have over 10,000 prescription drugs available to us in the US, which leads to a ‘this drug will cure all that ails you’ mentality. However, experts estimate that perhaps onethird of all US healthcare spending (COSTS) produces no benefit to the patient and some of it results in harm (QUALITY).  While the US leads the world in healthcare costs, we do not come close to ranking high on quality of care. In fact, we rank poorly in life expectancy and other indicators of quality.

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Evidenced Based Value Analysis

Gina Thomas

 While we know that higher intensity of care does improve outcomes, we spend a great deal more than other countries to achieve a similar degree of value. Examples of our higher costs include waste and variability in care that often lacks any evidence. Other countries don’t have nearly the resources or technology of the US, yet their value relative to the cost is markedly better.

Life expectancy for both men and women has increased slower in the U.S. than in comparable countries

Remember I wrote about Dr. Tower in my last article about the implant that he chose for his own hip replacement. The cost was not minimal and certainly poor outcomes demonstrate a lack quality.

Our children will not be able to afford healthcare and the cycle will continue. How

This is old news but it’s worth repeating. We can’t give up-we can’t forget—OUR LIVES DEPEND ON IT!

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Evidenced Based Value Analysis

Gina Thomas

Fight the good fight!

ACTION on Quality:

 Review your processes to investigate quality compared to costs while asking yourself (and others) these questions to determine quality and value:    



Will the quality initiative achieve a definite, measurable improvement in quality of life for the patient or overall health status?

Is the measurement process in place to ensure the quality benefit is achieved as projected?

Is the quality benefit derived from an unbiased, reputable and broad source of evidence?

Does the quality benefit apply to general populations or only certain patients and types of diagnoses or procedures? Applying a general use guideline to specific patient types results in inappropriate use and unlikely improved quality. If the guideline only pertains to specific populations, how will this be managed?

Are clinical guidelines in place to manage these specific scenarios?

What are the perceived benefits by those involved and what is their source of information, e.g. practice, expertise, conference, outside company?

 Provide ongoing access to the above information through conversations, formal meetings or other venues with those most affected, e.g. service line chairs, practicing physicians, quality leaders.

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Evidenced Based Value Analysis

Gina Thomas

ACTION on Costs:

 Review your processes to investigate costs parameters and avoid analysis paralysis, i.e. trying to solve for total costs when consideration assumptions can be applied.  Understand the costs perceptions from those directly involved, e.g. costs to the organization, cost of time and money to the individual provider and misunderstanding of costs and charges.  Provide access to cost data in a clear format to ensure physicians comprehend interdependencies between quality and costs.

Physicians want information and we have an opportunity to improve.

I will leave you with this last example of the interdependencies of cost and quality through a recent physician survey across multiple specialties: 90% of respondents felt increasing physician access to cost data would positively impact quality of care. Only 40% said their hospital or health system have measures that accurately capture quality of care for their specialties and patient population.

Look to MAKO in joint arthroplasty for a good example of cost and quality complexities around procedure types or patient populations.

Evidence indicates a lack of substantial improvement in clinical or operational outcomes and the extremely high capital and recurring cost associated with the MAKO robotic system. Its use in joint arthroplasty is likely not justified at this time. However, one flawed cost model suggests that use of the MAKO robotic system is cost-effective for unicompartmental knee arthroplasty at high-volume hospitals.

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Evidenced Based Value Analysis

Gina Thomas

Patients want more also Patients are looking for more information on this topic as well and aren’t necessarily relying on websites like HospitalCompare or Healthgrades but turning to non- healthcare sites like Yelp. “…But value—true consumer value—is not simply “quality minus cost.” (Or quality divided by cost… there seems to be a disagreement among academics about whether subtraction or division is more appropriate here.”) www.gisthealthcare.com/gist-blog

Quality and cost will always be tied together, and we shouldn’t accept anything less than a gold standard of high quality of health with longer age expectancy at a reasonable cost.

Sources:

Value‐Based Payment Hits the Tipping Point. h ps://www.businesswire.com/news/home/20160613005067/en/Value‐Based‐Payment‐Hits‐ Tipping‐Point

Lumere Physician Study 2017

Morris M, Abrams K, Elsner N, Gerhardt W. Prac cing Value‐Based Care: What do doctors need? Deloi e. 2016.

Gisthealthcare.com

Robert Wood Johnson Founda on, “Reducing Overuse and Misuse: State Strategies to Improve Quality and Cost of Health Care,” January 2014.

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, star ng as an emergency room nurse and later becoming a nursing execu ve, she brings a wealth of knowledge to the company, including strong exper se in preparing for new payment models, aligning clinicians, service line best prac ces, and execu ve‐level approaches to resolving fragmenta on in healthcare. She is passionate about pa ent 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!

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Leadership Interview

Value Analysis Leadership Interview

Matthew Rutberg— Program Manager, Value Analysis Children’s Hospital of Philadelphia (CHOP) (VAMag) Could you tell us a little bit about your professional history and how you got into value analysis?

Matt: I have been with CHOP this August at least seven years. And before that I was with a GE capital, the financial arm of General Electric, for 12 years just out of school. So, I didn't have healthcare experience. I got to a point in my career at GE where I wanted to do a little something bigger than myself. My wife is a nurse. She would talk about what she was doing. Comforting and caring for people, holding people's hands when they were literally dying. Then she would ask me how my day was, and I hadn't really a great answer.

We were thinking about having kids and having a legacy where daddy worked for a company that did good things and he cared about people more than himself. So, at that point in time, I investigated healthcare. I just don't know why I didn't think that healthcare was a business. Very

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quickly, I saw many opportunities in healthcare for process improvement people, which was my expertise from GE. A lot of my career at GE was being a Lean six sigma master black belt. I saw an opportunity at CHOP and applied.

In the first year, there were a lot of different projects I was involved in from surgical flow to patient flow. But eventually in year two or three there was an operating plan project that was initially called CHOPtimize that was geared toward saving $45,000,000. I was the process improvement person on the team that was aligned to the senior leaders on that project. Joni Ritter, who's the VP of supply chain at CHOP, was the champion of that project.

It was centered around money, but at that point in time there was a lot of discussion around value equation and how it can’t be just about price and it must also be about safety and outcomes.

So, we teed it up that way and had a lot of success for the two and a half, or three years that it was on the operating plan.

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Leadership Interview

When the project was at a certain point of time, there was an opportunity within supply chain. I never thought I was going to be a supply chain person, but that's how I entered supply chain. I was the capital manager for two years and then finally, there was a need for a traditional value analysis manager that centered on the need for all new product introductions to be reinvented.

We had serious safety events for which we conducted some root cause analysis. It was in part due to this process that I suggested to management that although I didn't care if it was me doin it, we should do something different with value analysis. As we talked more about the concept and how we could structure it and what the vision was, I stepped into that role. So, it was a net new role. This is our CHOPtimize Program and I’m our value analysis program manager.

(VAMag) With VA being a natural evolution of the triple aim for cost, quality and outcomes. How does your Lean Six Sigma background help you in your role as value analysis program manager?

Matt: I think it helps to think about the situation more broadly than traditional value analysis. So, I think a lot of what I've read and learned and spoken about with my peers at conferences and conversations that traditional value analysis was a supply chain driven activity, narrowly focused. For better or worse, not knowing anything about supply chain when I was hired or when I took on this new role, my mindset was, well, I just don't want to understand this product or this purchase service but I want to understand how it's used and I want to understand the people who use it.

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Ma

hew Rutberg

(VAMag) CHOP is known for being very innovative in cost management, specifically bringing cost management to the bedside with your nursing shared governance team. The program has been highly praised in the nursing community, specifically at Magnet. Could you share a little bit about that, the story of the successful bedside program with your value analysis?

Matt: There's two versions of it and there's two parts of the journey.

There is the first part which was part of the operating plan, a project that was coined CHOPtimize and that had a three-year run. We'll call it a project. We never wanted it to be just another project so we reinvented ourselves to include the traditional value analysis type activities. When we were going through that first three years we asked ourselves how would we get to the desired outcome here? How do we reduce costs while at the very least maintaining safety and outcomes and keep true value? Then we hit the jackpot, we realized you increase safety, increase outcomes, and reduce costs. That's total jackpot. And the biggest driver was an embedding it with the nurses who use these products or services.

You know you hit the jackpot when a nurse said, here's a problem at the bedside to solve. The data from utilization management standpoint also said yeah, we've got something going oh and we've got some information to support what you're saying. Next we quickly identified a big group of projects and our intent was to create this army of

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Leadership Interview

process improvement individuals at the bedside, as turning all these nurses somehow into black belts as we went along. We tried to do some training and embed that culture and Lean Six Sigma into that group and it was hit or miss. I mean we had some big successes and I think those are some of the projects that have been presented at Magnet. There have been some successes where for the very first time a nurse, a frontline nurse had a process improvement project that improved safety, and has cut some costs out of the organization.

(VAMag) Would you share a few key components or should I say your secret sauce for making your program a success at CHOP? Matt: One strategy, I think, that differentiates us is that we developed a vision statement, and a mission statement. The strategic areas of focus, we call it that are our long term five to seven year strategy, which aligns to those strategic areas of focus like processes and systems, communication, relationships and data analytics. These are the things that transcend value analysis that could be part of any business. Most importantly, we make sure that we align everything to our mission, our vision, and we make sure all of that aligns back to supply chains strategic direction as well as the organization's strategic direction and mission. So, I think that's one of the areas that is part of the secret sauce for sure because it seemingly doesn't exist in every organization.

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Ma

hew Rutberg

(VAMag) When you say process, you’re not just saying, a new product request comes in and you bring it to the committee. Your talking about how you define a project, correct?

Matt: I mean our prior VA program really wasn’t well-defined. It wasn't a program. We talked a little bit about it in terms of the traditional value analysis work that we did around new product introductions. It was one person trying their best to get products that were requested and that patients and staff needed, but it wasn't reliable, wasn't repeatable, it wasn't down on paper. It wasn't facilitated by systems or data. It wasn't any of these things. And it wasn't my predecessors' fault or their predecessors In taking a step back and thinking about the whole program after we developed the vision and the mission. We now know what the big processes are in play here that we really must think about. We had to determine whether to re-engineer the VA process, or design a new process but either way we needed to reinvent it with our stakeholders in and outside of supply chain who said there where opportunities for improvement.

(VAMag) Speaking of your advanced VA model. You created a brand. It was a part of a major initiative and now has evolved into CHOPtimize. Could you tell us how that unique branded approach helped your value analysis program gain the understanding, acceptance and ultimately thrive?

Matt: The word CHOPtimize came from that first iteration of the operating plan project and it was through a series of focus groups at the beginning of that project, that structure, that put the framework and fundamentals together for that Major initiative. We took it to probably 10 to 15 focus groups, hundreds of people and asked

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Leadership Interview

them for a name that we can gravitate towards.

What we were after was really creating an identifiable brand. When you think of Apple, when you think of McDonald’s, you can think of any of these companies for better or for worse, whether you hate or love them, you identify with their symbol & brands.

Therefore, we wanted this to be embedded in the culture of CHOP as a value mindset forevermore.

And so having something to gravitate toward like an anchor was important. We set out and we developed a name. We also worked carefully, believe it or not, with our marketing and PR teams to develop a logo to create stationary, and PowerPoint templates.

Whenever you saw a leadership briefing, a meeting, a one on one conversation, you would see that logo, you would see that brand and you would start to think about what the brand is all about? And if you didn't know, hopefully you would ask about it.

Again, it's about value added. As we came to the end of the three-year run on the operating plan and we were thinking about how to revamp our traditional value analysis program, we said to ourselves, well, we've got great traction on this word CHOPtimize and the value set and the mindset and the projects that we've done and relationships that we've built.

Why not build on this further?

(VAMag) In today's VA world, access to good data is the key to every team success. How does your program sift through all the available data and evidence to find cost effective quality value analysis results.

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hew Rutberg

Matt: Our differentiator is what we termed advanced analytics. That was when we set out two years ago and we said, what’s our vision, what's our mission, what are the strategic areas of focus? This ability to incorporate clinical information because it's around a value equation was key to what I really was focused on. And so, while we have a variety of traditional ways to look at costs and inventory, we have internal information that we can look at it, we have our GPO tools that we look at. They're very traditional in a sense that they focus on finance, inventory management and cost. We needed to figure out how do we embed the numerator of the value equation, the safety and the outcomes that was one of our primary areas of focus.

(VAMag) From a big picture standpoint, where do you think value analysis is going in the next three to five years?

Matt: I can answer it in two different ways.

From what I'm hearing from my peers, and my readings, I think VA will become more towards what we've done in the past two years. That is making your value analysis program a true program and going from the one person show with a supply chain focus and limited scope. Instead expand the process to be more utilization management minded.

I do hear that other organizations are beefing up their value analysis programs by hiring more people. I hear that they're building some of these process improvement groups as we have done at CHOP which of course I am a proponent of.

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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 Founda on 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 iden fying and realizing savings as evidenced by the sheer number of new conference a endees at AHVAP 2013.”

“AHVAP just keeps ge ng be er and be er every year!”

Join or Learn More Today

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

The networking opportuni es at the annual conference are invaluable. I am proud to be a member of our growing organiza on!”

WWW.AHVAP.ORG18

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Clinical Value Analysis

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

Lately, I’ve been thinking about the importance of mentoring in Value Analysis. It’s certainly an important tool in the development of most occupations. I could make the case that it’s even more important in healthcare Value Analysis than most. In fact, I frequently explain to my colleagues that we value analysis folks don’t often have many peers in our local institutions. It’s one reason we rely so heavily on our national organization (AHVAP) and national published literature (like this magazine).

I’ve been a Registered Nurse for thirty years. Yes, that means I’m old. I prefer to think of it as “seasoned.” During that time, I’ve spent about a decade in each of three disciplines: Critical Care, Psychiatry, and Value Analysis. As an ICU nurse, there were often hundreds of other ICU nurses in my institution that I could count as peers. I could learn from them, ask them to double-check my thinking, and double-check theirs. Sometimes, their participation in my practice was not even optional, such as when transfusing blood products into a patient...a second sign-off was mandatory, to help prevent catastrophic errors. Nurses take that stuff seriously, and very, very, rarely do they shirk that responsibility (although there have been cases of sloppy double-checking that’s resulted in negative outcomes). When I became an ICU Nurse Manger or Director, I still had peers in my institution that I could learn from and bounce ideas off of (they might be from other disciplines, but a departmental budget is a departmental budget). In Psychiatry, it’s a bit different, but the concept is still the same.

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Clinical Value Analysis

James Russell

Occasionally, I would attend regional or national conferences and learn from many, many colleagues.

My first NTI convention was a real eye opener…thousands of critical care nurses in one place, giving expert guidance, sponsoring hands-on practical courses, and even sharing lessons learned with each other. How cool! This experience taught me the value of networking and the absurdity of repeating someone else’s mistakes (and how our patients are the ones who suffer those consequences).

Healthcare Value Analysis is its own world.

It’s a young profession and there just aren’t that many of us out there. My current health system has over 17,000 employees.

Value Analysis consists of me, my Perioperative VA Coordinator, Tammy (a superstar), and our Data Analyst, Matt (a wizard).

That’s it…three of us! We’re planning to grow and hire more folks (a Nursing VA Coordinator, an Interventional one, etc.), but for now it’s just us. Now we have lots of really smart helpful people around us that we can learn from (and sometimes teach), but their disciplines aren’t the same. For example, we have a Project Manager, Nathan, who understands about a dozen separate databases (I kind of get Microsoft Excel…a little). We have a Procurement Director, Kristi, who knows how our MMIS system works (I can spell PeopleSoft…sort of). We have a Materials Director, Bob, who knows how distributors work (I know what LUM means…-ish). And we have a Supply Chain Attorney, Kate, who keeps us straight on contracts (I know what T’s and C’s stand for…I think). But all of these experts have their own worlds that are mostly different from ours. Who do we learn from? Perhaps we should just make things up as we go? Uh...no.

Remember that I learned the significance of networking at NTI? Well Value Analysis has re-taught me that importance in spades. Our GPO has national conferences semi-annually. AHVAP has a national convention annually and often regional meetings as well. Getting together with these folks is not only a lot of fun sharing stories that we can all relate to (“Dr. Smith went to a conference and wants a new…”), it is essential to operating our department in the most optimal fashion possible.

This collaboration is beyond helpful. If any of you have not attended one of these conferences, I challenge you to give it a try. You won’t be disappointed. I once had a boss who required me to come back from conferences with a “nugget” or two we could use locally. I often come back with dozens.

Going beyond collaborative sharing is mentoring. I’ve been privileged to have some of the most outstanding (and patient) mentors over the past 10 years. Mentors teach people to fish so they can solve their hunger problems on their own, rather than just giving them a fish to fix their hunger today.

Early in my value analysis career I was honored to share a speaking role at a break out session at Volume 6/Issue 3

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Clinical Value Analysis

James Russell

AHRMM with Terri from Mayo and Barbara from Virginia. Doing so was an amazing experience, although a bit humbling. I had lots to say, because I was so excited about my new career! Both of them just smiled and nodded, then showed me that value analysis is about data, logic and evidence… not giving speeches. They were, and are, awesome. I continue to tap them on the shoulder and ask for guidance and no matter how busy they are, they are willing to stop what they’re doing and keep me from putting my foot in my mouth. I should seek their advice more often and taste less shoe leather!

Then there was Joan from Alabama. She’s retired now, but still involved in the VA community. She taught me many things, the most fun of which was to look for opportunities in areas that most people wouldn’t think of. She once surprised me by saying, in her wonderful drawl, “Do you have any idea how much printer ink costs? Why does everybody need a printer in their office? Why not have one big shared printer per office suite? And don’t get me started on color! Do you really need your agendas and minutes printed out in red and blue? Get a grip!” It seems like such a small thing. Remember my 17,000 employees? I wonder how many desktop printers we have? It adds up.

Lorra in Kentucky has been a wonderful voice of reason for me. I can get a little worked up (I know, you’re shocked!), when my customers are making decisions based on emotion (what I’m trying to stop calling, “Drama”) and Lorra will just smile and roll her eyes. She’ll remind me that I want a long-term working relationship with these people, not a quick win. I can beat them up with logic and facts and have them give in to my way of thinking, resentfully. Or, I can work with them, rather than against them, and perhaps the next time they think of a cost-savings idea they’ll give me a call. Customer service isn’t just for vendors.

Mike at Stonybrook has been a great source of information. He’s taught me that not all health systems are the same. We all think we’re unique, and sometimes we are! The difference in working in a public facility vs. a not-for-profit is huge! I never knew what that stuff meant. And don’t let your GPO’s off the hook. Cindy, at mine, once saved my hospital $100,000 by making an offhanded comment about SCD sizes that I took back and investigated. Many of these folks are a wealth of knowledge and support, and I’ve found that you don’t have to pay extra for asking someone their opinion!

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Clinical Value Analysis

James Russell

So, you get it. Lots of folks have been helpful to me. There are many more: Pat in Virginia, who used to say, “When in doubt, don’t!” Sue in Rochester who’d remind me that everything isn’t a thing, sometimes just take a breath and let people learn their own lessons. Wanda in Tennessee who can attribute a lot of people’s behaviors to the generation they’re in, “Where’s my millennials? Bless your hearts…look up from your phones, please.” The point is, most of these folks worked in other places than I did, some were all the way across the country. It was through networking, professional association membership, conference attendance, and lots and lots of emails and phone calls that I was able to steal (I mean collaborate on) their ideas and avoid pitfalls and much embarrassment.

My last “nugget” is this, it never hurts to double-check your data before you go spouting off in a meeting, and if you don’t know something, don’t fake it. I once had a VP who decided to brag about one of my successful projects in a senior leadership meeting. Instead of confirming with me that he understood the topic, he “winged” it. My CNO took great pleasure in informing me of this VP’s pride in his Value Analysis Department’s six-figure return on investment with “blood-eluding stents.” Really? You can’t make this stuff up.

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 cri cal care, another third in psychiatry, and the last 10 years in healthcare value analysis. He’s been in both staff and leadership posi ons in the for‐profit, community healthcare sector, as well as in several Academic Medical Centers. Jim has published dozens of ar cles on value analysis and nursing leadership, and speaks regularly at na onal conferences. You can contact Russell with your ques ons or comments at jrussell@uwhealth.org

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Value Analysis 101

The State of Value Analysis Training in Healthcare Robert T. Yokl, President/CEO, SVAH Solutions

“If you think (VA) training is expensive, just think of the cost of not training (your value analysis team)” Zig Ziglar If you discovered that your stock broker, financial advisor or banker, who invests your money, has no formal training, would you continue to do business with him or her? If your doctor had no medical training, would you trust your healthcare to him or her? So, why are most hospitals, systems or IDNs trusting their value analysis teams with millions of dollars in purchasing decisions annually without any formal value analysis training?

It’s our estimate that only one out of ten value analysis teams have formal training in the value analysis methodology. Considering these same teams approve millions of dollars of new purchases annually for their healthcare organization, this is an astonishing fact. Can you think of any other healthcare disciple, such as, pharmacy, nursing or, respiratory therapy that could practice their occupation without any training?

To the contrary, too many value analysis teams that we have observed have made up their own homegrown version of the value analysis methodology as opposed to being trained in the classic tenets of value analysis as created by Larry Miles, the father of value analysis. Thus they are, squandering their healthcare organization’s money, because they don’t have the necessary skills to monitor, manage and control their healthcare organizations spend. Only through training can these skills be acquired.

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Value Analysis 101

Robert T. Yokl

Pro’s and Con’s for Value Analysis Training I know that everyone has an opinion on training, so here are a few pro’s and cons on training that we have heard that can help you build a case for change:

Although, you can always build a case for not training, it’s hard to ignore the fact that training is the shortcut to excellence. If you want to be mediocre in VA or worse yet, your teams are costing your hospital, system or IDN money, just continue not to train your value analysis teams in the art and science of value analysis.

If you think training is expensive, just think of the cost of not training We have seen value analysis teams approve a new product that unknowingly cost their healthcare organization fifty thousand annually and didn’t save even a dime on the project. All because of lack of training in the art and science of value analysis.

Value analysis has a body of knowledge developed over 67 years by value analysis practitioners that can’t be learned by attending value analysis meetings. You need to invest the time and money in formal classroom advanced value analysis training to be proficient at this discipline. Because if you think VA training is costly, just think of the cost of not training your VA leaders and team members. It could be millions annually.

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U liza on Management

How to Use Clinical Utilization Management as an Alert System for Quality Improvement Robert W. Yokl, Vice President/COO, SVAH Solutions

How to be Everywhere in Your Supply Chain at Once!

When we are reviewing clinical supply utilization reports for client hospitals throughout the country, I always like to look at not only the current period that we are reporting on but to look at the trends of their data over the short and long terms. This gives me a feel for what is going on with any particular category to not only ascertain what cost savings opportunities may be arising but most importantly are their quality ramifications tied to these as well.

Neutralize the Worse Excuse Our Customers Give Us When Costs Increase Case in point, when I see a hospital’s IV Set costs per patient day increasing by 22% to 33% over the past year it makes me wonder what is happening on those nursing floors or in ED to make this increase occur. For those of you who are new to clinical supply utilization management, because we are comparing based on an operating metric such as patient days, we are incorporating the increases and decreases of the organization’s patient volumes. The normal pushback answers you would get, “We were busy that month, quarter or year” should not apply because we are already factoring the patient volume into the report. This is nice because normal spend reports can’t answer that question and in the majority of situations, we have to walk away because we have no data to overcome this challenging question.

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U liza on Management

Robert W. Yokl

Utilization Cost is a Great Measure for Quality In the case above, where we talked about the IV Set costs per patient day increasing by 22% to 33% when there is no change to technology, sets or patient volumes—what should this lead you to? Is there a quality issue going on here with the sets themselves (e.g., failing) or has something else changed that now needs to be addressed? If you are using 22% to 33% more IV Sets, more than likely you are changing the sets too often as compared to your own history. Last I checked, changing sets too often is not good quality for either the patient or the hospital and it chews up nursing time when you don’t need to.

Many times, I have found that the simple culprit of 22% to 33% type increases at hospitals is the fact that clinicians get away from the IV Set labeling of the tubing. If you don’t label the tubing, then the 72-96 hour change policy goes right out the door because you won’t know when the tubing was last changed. One large community hospital found out in a VA Team Meeting that the regular IV and PICC tubing were changed on Monday, Wednesday and Friday every week. The VP of Supply Chain was instantly asking the question, “You mean that if I entered the hospital through ED and had an IV placed on a Sunday Night, I would have my tubing changed on Monday regardless of whether it needed it or not?” The answer at that point was yes and they realized they needed to go back to the hospital’s policy and in-service the staff to use the IV Set Labels.

Everyone Wins with Clinical Supply Utilization Lastly on the IV Set example above, this is a perfect illustration of where a hospital was able to dramatically reduce their costs and improve the patient quality/satisfaction plus eliminate wasting nurses time restarting IV sets that did not need to be restarted. This could happen on any product, equipment or service in the hospital not just IV sets, and most importantly there are hundreds of product categories to track down to improve not only quality but also cost!

Quality Could Be Compromised Because We Are Spending Too Little Of course, you want to attack all of your major increases in clinical supply utilization per metric but I also like to go to the other side of the spectrum and look at areas where the cost per metric is extremely low as compared to historical and cohort comparables.

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U liza on Management

Robert W. Yokl

Red flags are raised, if a client is running too low in an area such as wound care dressings in this age of ever increasing wound care costs and wound care centers of excellence being set up at hospitals. How could costs be rock bottom low or 42% below cohort best practice and 35% below cohort average cost per patient day? Are our policies not up to date with the latest standards of wound care? What is going on? This is the perfect realm for Value Analysis to step in.

Another point would be MRSA Test per patient day are running 51% below cohort best practices. Are we not testing for MRSA prior to patient’s being admitted or something else? If we are, are the testing results being reported on a timely basis? Are all the areas performing the MRSA test as indicated by policy and procedures? Is there any problems with our MRSA tests or equipment?

I know it may go against the grain to highlight categories where the hospital should be spending more money but if you are talking about wound care or MRSA, just one added instance of infection could mean major dollars to the hospital. Not to mention major consequences for our patient(s). We should be saving the money in the areas we want to save and making sure our spend levels are within quality limits for the others.

Going from Macro to Micro Levels Should be the Ultimate Success Goal Most of you reading this have focused on an area for contracting, standardization or value analysis and worked up your costs on a spreadsheet for the existing year in order to make the change that you are being charged to perform.

The biggest challenge with spreadsheets are not their limitations as spreadsheets are the ultimate versatile tool to use. The biggest challenges are in their singularity of function or you can only work up a spreadsheet on what you are focusing on while all other areas happen without you knowing what is going on.

Yes, I can work up my utilization costs on my IV sets but there is 500+ other categories happening out there at the same time. There could be some worse, some not so bad or some really good. How are we to know where these are? For Value Analysis Success, you must start to think macro (big picture) but then have the ability to take it down to the micro (ground level view) levels. Start asking yourself, what would the cost and quality value be if you could not only view what you are working on today and tomorrow, but you could see if anything else is occurring that could require you or your team’s attention before they damage your quality or costs (or both).

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U liza on Management

Robert W. Yokl

Need to Answer Your Quality & Cost Questions More Efficiently In a perfect world, even in the value analysis world we would love for our challenge to just be one broad stroke change to happen for us to get 99% of all our quality and cost results. Just go to reprocessing on Oxisensors and Compression Sleeves and that is all we must do! That is not likely to be the case and we have seen that due to the complexity of products and services in hospitals, they transcend many different departments and users house-wide. What we need clinical supply utilization to do is to give us the ability to look beyond the broad stroke strategy to see if anything else is going on. To ignore other things going one is just going to come back and bite us sooner rather than later anyhow.

Is there a problem with the product(s)? Which departments are causing our cost or quality issues? If so, which products within each department are causing the issues.

The Before, During and After of Quality By having a clinical supply utilization management system in place, you will have the ability to not only go back and look at the critical utilization trends to base your quality improvements on, but you will also be able to see what happens after you have successfully made positive change happen. Did they go back to their old ways and I need to have the VA Team go back to the implementation steps that were outlined for VA success? Is there something else happening that we did not originally anticipate, e.g., Tissue sealant was implemented to reduce the costs and improve the quality of the high cost previous tissue sealant product but utilization cost per surgery case has instead increased 26%. At least you would know this as many organizations make changes but do not have systems to tell them if the implementation has met their goals or something else is occurring.

Your Biggest VA Quality Advantage is Freeing Up Your Time With huge agendas for new products, contract conversions, standardization initiatives, etc., there is so little time to focus on the most important areas in our supply chain such as quality of the products we bring to the table. VA is a great process to find the best value and quality in the eyes of our customers, but we must realize that we need to always be a step ahead of what is happening in order to find the next best quality opportunities for our organizations. I hope you will start to further explore what clinical supply utilization management can do for you and your organization to improve the quality, cost and outcomes for your patients.

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The Last Word

Is Your Data As Clean As Your Steel?

Finding the Next Savings in Surgical Instrumentation Brian Reed CEO & Co-Founder Ascendo, Chicago, IL

Like it or not, hospitals are in the steel business. Buying steel. Cleaning steel. Packaging steel. Storing steel. Moving steel. One health system in one year moved 28 million surgical instruments—some 14 million pounds of steel equivalent to 4,300 automobiles—purchased from over 200 vendors and valued at $40 million.

No wonder the OR accounts for up to 35% of total hospital costs. No one has really mastered this steel business. And no doubt you know about the constant potential for waste in managing these complex assets across your institutions.

Luckily, with extraordinarily smart data tools, a little extra teamwork, and some expert guidance, the most egregious waste is getting easier to locate and eliminate.

Wasted time What's in a name? Well you might be surprised how much time you're wasting in and around the OR simply because different vendors, departments, and systems use different names and codes for the same items. You can't know where your stuff is if you don't even know what your stuff is called. And if you don't know where your stuff is, you can't deliver the right stuff to the right place, right on time.

Let's say the very same surgical instrument tray is called a "General Minor Set" on the surgeon's preference card in the EMR system and a "Minor Set" in the hospital's inventory tracking system.

This is one example of a rather common occurrence. Someone has to settle the discrepancy, find the right tray, and get it to the right room.

If someone cannot settle this discrepancy in time, the set doesn't show up at the scheduled OR start time. Now that surgical instrument tray suddenly grows a whole lot more expensive. With an 8minute delay at $62 a minute, your completely unnecessary and totally avoidable naming mix-up just cost your health system 500 bucks; not to mention, a patient unnecessarily waiting under anesthesia on the table.

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The Last Word

Brian Reed

Wasted motion The last-minute rush to compensate for such dirty data also wastes labor. When your people are moving steel without purpose, they are working inefficiently. That inefficiency costs you now and later. It costs you immediately in the poor utilization of your current staff. And it costs you over the longer term in hiring and training new staff you don't really need.

For total knee replacements, one OR ordered 8 surgical sets with an average of 60 instruments per set, or 480 instruments, daily. But they only used 25%, or 120 instruments.

Add it up. That's 360 unused instruments cycling through the OR, decontamination, washing/ disinfection, assembly/maintenance, sterilization, and storage. That's 360 instruments that could've been repurposed for other surgeons performing other procedures in other ORs. That's 360 unused pieces of inventory you could altogether eliminate from your next purchase orders.

Peak performance Everything starts with the cleanest possible data that gives you the clearest possible view of supply and demand. First, you need to know the difference between what you use every day, what you're saving for a rainy day, and what you're not using at all. Only then may Supply Chain, Operating Room, and Sterile Processing, in close collaboration, begin elevating the conversation and start moving along the path to peak performance.

In our experience, supply chain executives who enjoy this broader view of surgical instrument inventory and utilization, soon change their purchasing behaviors and priorities. Enhanced contracting often rises to the top of the list.

In a typical primary vendor agreement, a health system may agree to purchase 80% of the surgical supplies it needs through that particular vendor. But few such contracts can truly be honored. Most health systems are buying most of their supplies from 50 or more vendors without specialized contracts. Here's the origin of our nomenclature problem. A fragmentation of suppliers and disharmony in the surgical inventory causes troublesome variations in names and codes and wasted time and motion in the OR.

Brian Reed is Co‐Founder and CEO of Ascendco in Chicago. He has over 15 years of experi‐ ence with leading surgical device manufacturers in Europe and has been a trusted advisor to the most progressive health care systems in the U.S. and to hospitals around the world.

Ou i ng surgery departments with superior data, analy cs, and so ware, Ascendco is helping providers be er manage their most complex assets and helping people work to‐ gether to reach new heights. Comments or ques ons for Brian can be sent to brian@ascendcohealth.com .

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