HC Value Analysis and Utilization Management Magazine_Volume 11 Issue 3

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Volume 11/Issue 3 www.ValueAnalysisMagazine.com 1 Magazine www.ValueAnalysisMagazine.com Healthcare Volume 11/Issue 3 Leading Cost and Quality Strategies for the Healthcare Supply Chain Featured Article: Winning with a Clinically Integrated Value Analysis Process
Volume 11/Issue 3 Healthcare Value Analysis & Utilization Management Magazine 2 You Don’t Need to Turn Your Organization Upside Down to Uncover the Millions of Dollars in Savings Still in Your Supply Chain WWW.UTILIZERDASHBOARD.COM But You Do Need to Have a Utilization Management System to Find the New Low Hanging Fruit Beyond Price! Let us help you to quickly and easily identify and implement millions of dollars of savings right in your own back yard. It is now mission critical to do so! www.ClinicalSupplyUtilization.com SVAH SOLUTIONS Making Savings Easy for You! 37 Years as a Trusted Leader in Supply Value Analysis and Utilization Savings Strategies


By Robert T. Yokl

Clinical Supply Integration: Do You Know What It Means?


By Robert W. Yokl Big Savings in Retrospective Value Analysis Reviews


The Crucial Role of Change Management in Healthcare Value Analysis


By Robert T. Yokl

5 Incredibly Useful KPI Tips for Supply Chain/Value Analysis Professionals to Know Where You Stand


Interview with Suzanne Smith and Kerry Lepage Winning with a Clinically Integrated Value Analysis Process


By Tracey Chadwell A Blueprint for a Successful Recall Management Program


By Arnold Chazal and Lana Makhanik How an Accurate Item Master Ensures Revenue Integrity and Prevents Provider Burnout 29 VALUE ANALYSIS 101

By Robert T. Yokl 5 Reasons Non-Conformance to Requirements is Holding Back Your

Healthcare Value Analysis & Utilization Management Magazine

Healthcare Value Analysis & Utilization Management Magazine is published Bi-monthly by SVAH Solutions® P.O. Box 939, Skippack, Pa 19474 Phone: 610-327-4820



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

Managing Editor

Robert W. Yokl ryokl@ValueAnalysisMagazine.com

Senior Editor

Patricia A. Yokl

Editor and Graphic Design

Danielle K. Miller

Copyright 2023 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: 610-327-4820

By Robert W. Yokl

E-Mail: ryokl@valueanalysismagazine.com for approval to reprint, excerpt, or translate articles.

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Savings Opportunities 32 UTILIZATION MANAGEMENT
By Robert T. Yokl The New Healthcare Normal: Financial Uncertainty
Beyond Like and Don’t Like in Value Analysis

Clinical Supply Integration: Do You Know What It Means?

As a discipline, we have been talking about clinical supply integration (CSI) for a number of years now, but do we really know what this term means? Based on my readings in our industry publications, listening to podcasts, and hearing dialog from our supply chain community, I’m not sure we do. Here are some descriptions from supply chain sources on what is currently described as clinical supply integration:

• Engaging physicians to reduce variation, lower costs, and enhance performance.

• Form a sustainable committed partnership between supply chain and clinicians that improves care delivery and financial performance.

• A system-based approach to remove practice variation around consumption of medical devices, medical equipment, and pharmaceuticals.

We believe that a much better description for clinical supply integration is giving control of your healthcare organization’s supply chain expenses to the people who have the most influence over it –your clinicians. This is because people like the changes they decide to make that are not forced, imposed, or dictated. This can best be accomplished by:

1. Providing intuitive activity-based expense data to frontline clinicians. Right now, except for budget reports which are viewed at 30,000 feet, your clinicians have no way of knowing that their expenses are above average, higher than their peers, or increasing year-over-year. This can all change for the better if you provide timely and intuitive supply chain expense trending reports.

2. Empowering your clinicians to control their own expenses. By providing insightful reports to your clinicians on their unfavorable supply expense usage patterns, they will naturally react to correct these utilization misalignments. This is because clinicians don’t want to be out of step with their peers.

3. Celebrate and report success to senior management. The most successful CSI initiatives we have seen have celebrated and reported their success to their senior management. The celebration could be in the form of a free lunch, days off, or monetary consideration. It doesn’t matter what it is, as long as your clinicians are recognized and rewarded for their success.

I think all healthcare organizations are on the right track with their clinical supply integration initiatives, but I believe the best approach is to have supply chain and value analysis professionals support, guide, and enable their clinicians to make change happen themselves.

Volume 11/Issue 3 Healthcare Value Analysis & Utilization Management Magazine 4 From the Publisher's Desk

Big Savings in Retrospective Value Analysis Reviews

chain issues, pricing increases, and bottom lines. As a value bucket when a good amount of our efforts are related to new products, product problems, contract conversions, and recalls? The answer is, retrospective value analysis reviews (RVAR).


When I first entered the healthcare supply chain world 30+ years ago, there were many firms, including SVAH Solutions, that offered the set-up of value analysis programs at hospitals and health systems with the sole premise of dramatically reducing costs. The teams back then did not even bother with new products at that time, as those were thought of as things that would increase costs and the focus of these new value analysis teams and programs was to reduce costs in the eyes of the CFO.

What we did with these reviews was find large dollar categories that were clearly running over where they should have been and then the team would perform a retrospective value analysis review of all the major products within that category. Value analysis is the study of function and the search for lower cost, functionally equivalent yet reliable alternative products, services, and technologies. The VA methodology was originated in the name of reducing costs back in the 1940s at General Electric, so why not use it to dramatically reduce costs in our major and minor categories? That is exactly what would happen and we would help organizations reduce their costs by millions of dollars because they had never done RVARs previously so there was a good amount of low hanging fruit.

Volume 11/Issue 3 Healthcare Value Analysis & Utilization Management Magazine 6 From the Managing Editor’s Desk

Turning Doubting Thomas’s into Believers

The savings opportunities found were due to the hospital using feature-rich Rolls Royce products in their vendors’ product lines when the Ford or Chevy version would meet the clinical requirements reliably. Or, products were being wasted, using two or three of a product when they should have only been using one or two at the most. What was unique was that when we first formed the teams and trained the department heads and managers who would be part of the process, we found that they were all Doubting Thomas’s and did not believe that there were any substantial savings to be had. But then as they themselves worked through the value analysis projects for their teams, they became believers in the savings.

If you don’t perform any type of retrospective value analysis review for your organization on all of your major categories with the belief that there are no savings to be had or that it is a waste of time, then I caution you to think again. Granted, there could be some dry holes in which you would be totally optimized with the right product mix meeting your exact functional requirements on a few projects. What we found, though, was that 8 out of 10 RVARs did bring about major savings that they would never have gotten if they did not perform the review.

Fast Forward to More of a Sure Thing

Through coaching clients in our value analysis process, we have realized that time is ever so important to the department heads and managers who sit on the value analysis teams. We needed to make sure that any RVAR would have to be a sure thing for them and that it was not a waste of their time to be part of the process, nor would it be a waste of your VA and supply chain teams’ time. We were able to ensure this with the use of key performance indicators in the form of peer cohort, historical, system-wide, and national benchmarks. In essence, we are triangulating the savings objective and then the end value practitioners on the team just need to focus on the value analysis process to search for the waste or inefficient use of the products, services, and technologies that they are reviewing.

In a perfect world, your supply chain and value analysis teams would be able to perform retrospective reviews on all of your categories, but the sheer number of categories and products would be time and labor prohibitive. When you employ KPIs, you know which categories need to be addressed first based on the savings opportunities at hand and can strategically plan your RVAR around them.

It is Okay to Look Back On the Past if There are Big Savings to Be Had

The bottom line here is that these retrospective value analysis reviews are valuable to healthcare organizations who are in dire need of big savings which will go directly to improve their bottom lines. A good example of a RVAR was in our previous issue of this magazine where Shaneka Demps’ Team at BayCare Health saved millions of dollars on just one retrospective review. Imagine if you formalized that process and began continually performing RVARs on an ongoing basis; it would be huge savings that you could bring about in a short amount of time. This is exactly what your CFO and organization are looking for!

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Editor’s Desk
From the Managing
Robert W. Yokl


The Crucial Role of Change Management in Healthcare Value Analysis


Karen Niven, MS, BSN, RN, CVAHPTM

Healthcare value analysis, a systematic approach to ensuring the highest possible quality of care at the lowest possible cost, has emerged as a critical component of modern healthcare systems and has wide-spread applications across the entire continuum of care. By identifying inefficiencies, evaluating new technologies, and determining the best practices for delivering patient care, value analysis programs can lead to significant cost savings, improved patient outcomes, and better allocation of resources. However, implementing value analysis initiatives is not a straightforward process and requires an organizational commitment to change leadership and management. Healthcare organizations often face challenges such as resistance to change, limited resources, and complex regulatory/accreditation environments. This is where change management comes into play. Change management provides a structured approach for guiding and supporting individuals, teams, and organizations through the transition from the current state to a desired future state. When organizations regularly change and adapt, this enables them to achieve their goals and sustain improved clinical outcomes more effectively.

Overcoming Resistance to Change

Change is often met with resistance, especially in a high-stakes field like healthcare. Healthcare professionals can be skeptical of new methodologies or technologies, fearing that they may compromise patient safety or disrupt established workflows. Change management helps organizations address these concerns by creating a culture of openness and collaboration, enabling them to engage with staff and address their concerns. Through effective communication, change management can help organizations foster buy-in from stakeholders and create a more receptive environment for value analysis initiatives.

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Aligning Organizational Goals and Priorities

Healthcare value analysis requires a strong alignment of goals and priorities across the organization. Change management plays a critical role in ensuring that all stakeholders are working toward the same objectives. This involves engaging leadership at all levels, developing a shared vision, and clearly articulating the benefits of the value analysis initiatives. With everyone on board, healthcare organizations can more effectively drive progress and achieve their desired outcomes.

Streamlining Processes and Reducing Complexity

Implementing healthcare value analysis often involves reengineering processes, reevaluating technologies, and redesigning care delivery models. Change management helps organizations navigate this complexity by providing a structured approach to identifying, prioritizing, and implementing changes. By breaking down initiatives into manageable steps and focusing on continuous improvement, change management can make the transition to value-based care more feasible for healthcare organizations.

Building Capability and Supporting Skill Development

To ensure the success of value analysis initiatives, healthcare organizations must invest in the development of their workforce. Change management can facilitate this process by identifying skill gaps and providing the necessary training and support. By helping healthcare professionals develop the necessary skills and expertise, change management contributes to the long-term success of value analysis initiatives. Being a part of a professional association such as the Association of Healthcare Value Analysis Professionals (AHVAP), can play a pivotal role in professional development and advancement.

Evaluating Progress and Ensuring Sustainability

Change management plays a crucial role in monitoring the progress of value analysis initiatives and ensuring their sustainability over time. This involves establishing performance metrics, tracking outcomes, and making data-driven decisions. By focusing on continuous improvement and learning, change management helps healthcare organizations adapt to new challenges and maintain their commitment to value-based care.

Change management is essential to the successful implementation of healthcare value analysis programs regardless of the care setting. By addressing resistance to change, aligning organizational goals, streamlining processes, building capabilities, and evaluating progress, change management enables healthcare organizations to navigate the complex landscape of value-based care and ultimately achieve better patient outcomes at a lower cost. As the healthcare industry continues to evolve, change management will remain a critical component of any successful value analysis initiative.

Dr. Garrett is the Executive Director and Executive Vice President for the Association of Healthcare Value Analysis Professionals (AHVAP) and an Adjunct Assistant Professor of Medicine in the Division of Infectious Diseases at the University of Louisville School of Medicine.

Karen Niven is the Senior Director of Clinical Value Analysis at Premier, Inc. and serves as the President-Elect for the Association of Healthcare Value Analysis Professionals (AHVAP).

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AHVAP Garrett and Niven

Duvera Solutions Group


5 Incredibly Useful KPI Tips for Supply Chain and Value Analysis Professionals to Know Where You Stand

What is Measured Happens, or Doesn’t Happen Because of Lack of Planning

What we are seeing in the healthcare marketplace is that CEOs, COOs, and CFOs are scrambling to plug the huge holes in their labor and non-labor budgets due to the effects of the pandemic. For the most part, these executives want to know where their healthcare organization stands on their expenses. The best way we have found to do so is with historical, comparative, and year-over-year key performance indicators (KPIs) that measure your success in managing your expenses. However, your KPIs must be developed organically, logically, and statistically to be of value. Here are five incredibly useful KPI tips for supply chain/value analysis professionals to know where you stand:

1. Establish Goals For Your KPIs Instead of Winging It: If you have decided thatone goal is that your backorders are to be at a 98% delivery rate then you need to establish a KPI (orders delivered/received on first delivery) that reflects that objective. So, the process is to develop your KPIs by defining your goal, then dive into your KPI that will give you the outcome you expect.

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2. Don’t Measure Everything That Can Be Measured: Although it would be nice tomeasure every labor and non-labor expense under your control, we have discovered that there are about 15 labor and 726 non-labor supply chain categories out of 932 that make sense to track. As your accountants would say, “Only some things are material, others are nice to know but not essential to your success.”

3. Look For Patterns, Trends, and Anomalies: We have discovered that a KPI measured at one point in time isn’t enough to identify labor or non-labor cost overruns. Only after you have looked for patterns, trends, and anomalies over time (i.e., quarters, months, years) based on historical, comparative, and year-overyear metrics (we call this triangulation) can you reliably point to a savings opportunity.

4. Focus On Quantitative Vs. Qualitative Measurement: Dave Schoenbeck tells us to “focus on quantitative measurements or hard data that attempts to answer ‘how much.’ Though qualitative key performance indicators (KPIs) help you understand why something has happened, the problem is they tend to be vanity metrics that are not only hard to track, but also too subjective. In fact, qualitative performance measures don’t truly exist.”

5. Measure Your KPIs Monthly, Quarterly, and Annually: For the best outcomes, frequent measurement of your KPIs is recommended in order to observe adverse patterns, trends, and anomalies that could creep into your data that needs to be investigated for the integrity of your KPI constructs.

We have found KPIs are one of the most powerful tools to enable your supply chain/value analysis functions to operate at peak performance. As we like to say, “What is measured happens, or doesn’t happen because of lack of planning.”

ValueKPI Robert T. Yokl
What is measured happens, or doesn’t happen because of lack of planning.

Value Analysis Leadership Interview: Winning with a Clinically Integrated Value Analysis Process

HVAUM: How did both of you get into roles within the healthcare supply chain and, more specifically, value analysis?

KP: I started in an academic hospital in 2005, actually the same time that Suzanne started her role as a value analysis nurse. It all began with initiatives involving clinicians who were asking for specific products and many times were expensive, sometimes they were new on the

market. This also coincided with hospitals and health systems looking to save money in a big way. In working with Suzanne and her value analysis team, we brought this all together and started an amazing partnership. This partnership and teaming was highly successful for many years and we have seen the full spectrum of value analysis from the simple and straightforward to the highly complex and everything in-between.

SS: My story is kind of funny. I had been an oncology nurse for many years, and I wanted to do something different. People had told me my whole life that I was really good with numbers. I wanted to be home more with my children, and I wanted a more normal schedule because as you know, nurses work weekends and holidays. This VA job appeared, and I said to myself, I think I can do this. I had to convince people that I could do this job, even though I had no experience. And the job was to be the first value analysis nurse for a health system and then grow the program. The person who hired me said, “Suzanne, this is not for the faint of heart.” And I said, “You are talking to an oncology nurse. I know all about things that are challenging and difficult.” The job was difficult in a different way but then again, here I am 25 years later.

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Featured Article
Listen to the Entire Interview Conversation Bob Yokl Had With Suzanne Smith and Kerry Lepage Here

Featured Article

Kerry and I grew up together in value analysis and at Maine Health.

HVAUM: What sort of insights or value have you gleaned thanks to a greater emphasis on value analysis?

SS: I have learned that, when possible, you really should use evidence when you're talking about value analysis and you're making decisions. It's really important to have that be part of the process. Also, with evidence and data you have to make sure that everyone hears the same thing and sees the same when working towards those challenging decisions. They must be made in the most objective way possible. Plus, I think of value analysis as a problem-solving process because the problem is we have to save money, we have to reduce suppliers, we have to improve quality, we have to bring on a new procedure, a new service line, etc. So that's how I like to think about value analysis. That would be my biggest insight. We're problem solvers.

HVAUM: Can you tell us about a particularly successful strategic sourcing initiative and how it’s delivered value to your organization?

KP: One of the biggest initiatives that Suzanne and I did early on in both of our careers was a glove initiative. It started with patient safety. We were using gloves with powder, and we were looking to convert to powderless gloves. We thought this was going to be an easy conversion. Of course, we found out that would not be the case. There were lots of bumpy roads in that conversion. We made it happen starting with meetings with all the frontline staff. Then, we met the surgeons and then the vendors. We did cross references. We enlisted the vendors to work with the staff and surgeons so they had an idea of what

different gloves they could use. This value analysis process took three months. The end results were huge. It ended up being a six figure cost savings as well as meeting the customers’ exact requirements. To this day, Maine Health as a whole is still using these gloves. This conversion wasn't without some difficulties and roadblocks along the way.

SS: This glove conversion was the very first initiative I decided to do in my new value analysis role. I think what this speaks to is really understanding different perspectives and having that cross-functional collaboration when you're doing any kind of a strategic sourcing initiative; bringing in those end users, like Carrie said, showing them the data and the evidence, and talking about why we missed the mark. It turned out to be just growing pains. My advice to those new VA professionals in similar situations is to be brave. Don't give up. I remember being in a room with Carrie and the nursing director at the time, and just being nervous that I had done something wrong.

KP: Let’s talk about another initiative about bone cement savings that was a six-figure savings. We brought in the physicians and showed them the data. We worked with the vendor who shared more information on the white papers. We had our physicians talk to other physicians who had been using these bone cements for years with very good outcomes. The physicians now had good data to support this change and we felt that

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“It’s important for evidence to be part of the value analysis process.”

Featured Article

this was a safe product for them to use. After a little bit of time and conversation back and forth, the physicians agreed to trial this. We had a conversation after the trial process and asked if they would be willing to convert. The physicians said yes. We switched vendors and everything was going well, we were saving money.

Then six months down the road, we were getting reports from the physicians that the implant was de-bonding on not just a couple patients, but more. We got that feedback from the physicians and then changed back to the original bone cement vendor. Interestingly, in working with the original vendor, we were able to make some large bulk buys and ended up with the same amount of savings as we did with the vendor that we had switched to in the conversion. Sometimes conversions go well, sometimes they don't. I think that was a good example of getting to know the physicians involved, showing them the data, and letting them make the decision on whether or not we should convert. Unfortunately, it didn't go as planned, but the end result was that the institution saved money and the patients (and physicians) got a good product in the end.

SS: That's what builds trust. It builds relationships. And none of this can happen without that, without us sharing our perspectives and why we do what we do. I think that it’s really important to be able to go back to the physicians and say, “We didn't make the right choice here, and we're going to make a different decision.” That really did build trust with that physician group. Our physician champion chaired our Orthopedic Value Analysis Committee for many years and was a wonderful person to work with.

Funny story: A vendor called him about a new product, and he said, “Oh no, you can't talk to me. You have to first talk to Suzanne Smith about this.” What that told me was that we had gotten to the point where he understood that for any

vendor to bring in a new product, it had to go through supply chain and value analysis first, not to the physician first. That was a huge moment. It really was. It seemed small and I laughed about it, but the vendor knew too. That is our process.

HVAUM: Who are the key stakeholders that you normally deal with in value analysis and how do you work with them to gain buy-in and collaboration so that you can drive successful and sustained change?

KP: It depends on what the initiative is. We consider whether this is a commodity that is affecting the whole organization, whether you're going to want a physician lead who might be the service line chief, and whether it's something that is specific within a certain service. If it's something that crosses over between service lines, you might want to pick one or two physician leads to be stakeholders for that specific initiative. The thing that's really important, and Suzanne has said this too, is that data is key. Showing them why we're doing this, what the market share is, and what the savings are is very important.

SS: You have to also consider other stakeholders who we would consider non-clinical. You've got your VP of supply chain, your finance team, your reimbursement people, quality, safety, risk, infection prevention, etc., and we make sure that those perspectives are also considered when we do some of these larger initiatives. Because I love the word sustain. I always say that anyone can get a single win on a contract, but can you sustain that over time? And I think that's why Carrie and I really wanted to share that project with you around the gloves because it has sustained over many, many years. The other thing that I'm seeing a bit more involved with value analysis is folks who are doing process improvement at their organization.

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linkedin.com/company/powersupplymedia facebook.com/powersupplymedia

Value Analysis Recall Advisor

A Blueprint for a Successful Recall Management Program

Building upon the foundation that we laid in my previous article, let’s now discuss the blueprint for the program that rests on that foundation. Like all successful and sustainable projects, there must be a setting of guiding principles and policies that delineate the roles and responsibilities of those involved, as well as outlining a systematic, repeatable process by which success can be measured. Having a documented process with accompanying policies also addresses requirements of accrediting agencies, such as the DNV and TJC. Their standards call for every organization to have a process to respond to product recalls and notices, with corresponding documentation to demonstrate compliance with that process and related policies.

In the last article, the importance of having a strong foundation for a recall management program was reviewed. It began by defining the key core elements: leadership and ownership. This should be the first part of the organization’s policy around recall management. The leadership/ownership structure should be defined, along with the roles and functions around management, oversight, and escalation. All necessary job titles/positions that are part of the program should be named and if they are permanent or ad hoc members of this process. If there are any additional groups, such as the Safety Alert Response Team, mentioned in the last article, the roles and functions of this team should be addressed.

The next essential component of the policy is an outline of the process that is to be followed – how will product notices or recalls be handled? Is the program centralized or decentralized? (see previous article) How will alerts be evaluated and prioritized and by whom? More specifically, these process steps need to be defined:

How alerts/notices may be received, including the role of any third-party vendors

The person/role who is designated to receive and “triage” the alerts

The process used to prioritize and address alerts based on the type/level of the alert

•Product recalls (Class 1-3)

•Field corrections/notices

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& Utilization Management Magazine 20

Value Analysis Recall Advisor

Notification process/communication plan to end users, supply chain, and other key stakeholders

The protocol to address a product notice/recall once it is received

•Who will identify if the product has been purchased and is in use/in stock and affected locations within the organization; how will this be accomplished

•Who will perform remediation-collection, removal or correction of product, as indicated by supplier

•Who is responsible for the coordination of all actions taken and monitor the process

•How will closure/response back to supplier be handled

•How an issue can be escalated should a problem be encountered

Internal response time for each class of recall, i.e., Class 1< 24 hours, Class 2&3 within 3-5 days

Any process to address internally identified product failures (“internal recalls”)

A policy must also provide for the evaluation of consistency, sustainability, and compliance to the established process. It should accomplish this by addressing 3 additional areas. First, there needs to be a defined mechanism for the documentation of the process and all actions taken, ideally in a central repository. Whether it is a home-grown solution, or a third party offering, the process must be fully documented, from intake of the alert through completed actions/resolution, with the responsible party clearly indicated in the data. This information can serve as evidence to an accrediting organization that a process is in place and is being utilized in compliance with the policy. This data can also be used to create reports for all necessary leadership committees within the organization, as directed by the policy.

This documentation will also go a long way in supporting the next key element in the policy; compliance auditing. To ensure that the process is effective and efficient, auditing must be done at regular intervals. Auditing should be prescribed in terms of compliance to the policy and any performance metrics, and the metrics should be clearly defined and quantifiable. Some sample metrics would be:

 Response time to completion, at the organization and/or department level

 Completion rate

 Number of alerts received, % requiring action, % with potential to cause harm/ affect delivery of patient care, number unresolved

 Number of products destroyed, returned, replaced, corrected

 Feedback on the process

A corrective action process should also be outlined, including documentation of the review, remediation actions taken, and the effectiveness of those actions at correcting the problem.

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Value Analysis Recall Advisor

The final, but no less important, component of the policy should address employee training on both the policy and the process. This should include the new employee training, periodic refresher training of current employees or those identified during the auditing process, as well as additional training for those directly involved in the recall management process.

With this comprehensive blueprint for the recall management process, the program is now ready to be implemented on the strong foundation of leadership, organizational culture, and structure already discussed. In the next installment, we will review tools that are available to help during the implementation phase and keep things running smoothly as you continue to build out the program.

Tracey Chadwell has 30 years of clinical and supply chain experience driving clinical and operational performance improvement, demonstrating significant returns on investment through clinical utilization management of resources and operational cost savings. Her experience covers aspects of supply chain including data analytics, operational efficiencies, internal and external customer relations, GPOs and contracting, and consulting in these areas. Her experience in value analysis includes leading a program, developing or refining existing programs, and implementing millions of dollars in savings through various healthcare organizations. This included operational and clinical process improvement programs which contributed to cost savings in both labor and nonlabor expenses.

This year, Tracey started her own consulting enterprise, TACH Consulting. Prior to joining that, she worked as a senior director of the clinical advisory specialists for Intalere, serving as an SME and trusted advisor to their members, as well as providing consulting services in supply chain and value analysis. In addition to her 10 plus years as a bedside nurse and manager, she has also worked as a consultant for value analysis and service-line analytics for two large GPOs.

Tracey has also been active with state healthcare organizations in all classes of trade, providing educational presentations and advisory services. She has appeared on several podcasts, such as Power Supply and The ASC Podcast as well as several industry blogs. She is a member of the Association for Healthcare Resource and Materials Management (AHRMM) and the Association of Value Analysis Professionals (AHVAP).

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How an Accurate Item Master Ensures Revenue Integrity and Prevents Provider Burnout

There are numerous challenges facing U.S. hospitals and health systems today that are now widely acknowledged and discussed, such as the high cost of care, healthcare access inequities, persistent supply chain problems, staff burnout, provider shortages, and poor financial margins, to name just a few.

The Role of the Item Master

Hospitals are constantly looking for ways to achieve revenue integrity. One way to achieve this is as fundamental as managing an accurate item master and ensuring the alignment of item master data across all hospital systems. The item master is a key set of data that feeds into many core functions that are critical to a multitude of hospital operations and supply chain processes, such as the procurement and management of critical supplies and implants.

An accurate item master, and synchronization with clinical and financial systems, is essential for ensuring accurate charge capture and billing, for reducing supply expenses through a “just enough” lean inventory, for improving the accuracy of point-of-care documentation, and for guaranteeing the availability of products needed for every procedure.

Furthermore, to ensure complete revenue integrity, particularly in the supplies and implants intensive procedural areas, several things must be in place, such as the ability for clinicians to

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and Makhanik
Value Analysis Data Integrity Chazal

Value Analysis Data Integrity

quickly, easily, and accurately capture what’s being used, automated submission of charges, and access to real-time visibility into any exceptions that are preventing billing.

Without an accurate item master, there’s a ripple effect of damage that affects not only hospitals’ bottom line, but also their patients and providers. Indeed, the financial and operational health of an organization depends on it.

The Detrimental Effect on Hospital Staff

Item master problems don’t just threaten revenue integrity, they also create burnout and frustration for clinical staff. Here’s why:

When data capture isn’t automated, accurate, and integrated with other hospital systems, hospital staff waste massive amounts of their precious time:

• Manually counting inventory to know what needs to be reordered.

• Placing and then following up on orders with supply chain and multiple vendors.

• Checking for expired and/or recalled items.

• Scrambling for last-minute substitutes when orders are delayed or products are on backorder, risking the cancelation of patient cases.

• Manually auditing and typing in missing information (such as lot or serial number) for implants at the point of care, during billing, or for reordering consigned items.

• Tracking consignment fulfillment and compliance.

• Tracking items borrowed and returned between departments/cost centers.

This issue also causes tremendous stress for staff because without an accurate item master, they’ re unable to have full control over the management of their supplies. For example, they worry about items not being in stock for procedures and cases not being able to be performed as scheduled, which results in reactive “just in case” ordering that, in turn, causes overstocking, hoarding, and wasted supplies.

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Chazal and Makhanik

Value Analysis Data Integrity

The blatant waste of staff time spent on non-value-added activities and the anxiety and frustration caused by a dysfunctional supplies management process are exactly the kind of situation that creates burnout.

How VUEMED Ensures an Accurate Item Master

Whether customers are dealing with multiple ERP systems due to acquisitions or aligning data capture across multiple clinical systems, VUEMED provides automated smart technology tools for ensuring a common item reference and accurate data capture for each item transaction, including UDI details. We work with customers to create a uniform standardized process for capturing, processing, and submitting charges, thus putting an end to their manual, cumbersome, and resource-intensive process for confirming item use and auditing charges (and eliminating costly human errors). We also help them form a cross-functional team from supply chain, finance, IT, and clinical to align item references across all relevant IT systems.

VUEMED’s automated RAIN RFID and barcode scanning systems ensure full visibility of each item from requisition to billing by tracking clinical inventory and product usage from the point of entry at the facility to the point of care so that the complete lifecycle of each SKU is documented and reported in real time. We maintain perpetual inventory information for each item tracked, down to its lot/serial number and expiration date, and capture swiftly and accurately all UDI and other necessary data, which is then transmitted to all necessary hospital systems, including clinical, MMIS, ERP, and billing systems.

VUEMED’s Groundbreaking New Technology

VUEMED’s newest automated inventory management solution is VueStat™, an electronic shelf label (ESL) solution that promises to make life dramatically easier on clinical and supply chain staff. It provides updated product and supplies information remotely and in real time, and reports specific feedback to the Cloud for analysis. On a label-size screen, VueStat displays all product details as well as inventory status (on-order, back-order, out-of-stock, etc.), warnings (recalled, latex, bill to patient, expiring, etc.), min/max par levels, and approved item substitutes. Each ESL also conveys back a wide range of information via combinations of pre-programmed button pushes, such as varying levels of stock on hand, need for replenishment, replenishment fulfilled, and damaged stock.

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Hospitals have no choice but to do their part to prevent provider burnout. Ensuring an accurate item master is a powerful way to achieve this.

Value Analysis Data Integrity

We Can Do This!

Let’s fundamentally change the way that inventory is managed, once and for all. Automated data capture solutions remove the likelihood of human error and take the burden off of clinical staff to micromanage – and have to worry about – their inventory.

With today’s growing staff shortages, hospitals have no choice but to do their part to prevent provider burnout. Ensuring an accurate item master is a powerful way to achieve this.

Lana Makhanik is the COO and Co-Founder of VUEMED, a healthcare IT company that solves acute inventory management, supply chain, and product utilization documentation problems at hospitals using advanced UDIcompliant RAIN RFID and barcode scanning solutions. She oversees implementation and support service teams, and ensures quality control in the execution and delivery of VUEMED’s services. Lana works closely with clinical, financial, and supply chain leaders in hospitals, and is a subject matter expert on such topics as data-driven clinical inventory optimization, supply chain visibility and predictability, clinical documentation at the point of care, automated RAIN RFID technology, UDI data capture, KPIs and data analytics, revenue integrity and the item master, and demand planning. Lana is also involved with industry-wide supply chain initiatives through such organizations as AHRMM and Strategic Marketplace Initiative. Lana holds a Bachelor of Science in Cognitive Science from Wellesley College.

Arnold Chazal is the CEO and Co-Founder of VUEMED, a SaaS and Cloudbased healthcare IT company that solves acute inventory management, supply chain, and product utilization documentation problems in hospitals with its suite of advanced UDI-compliant RAIN RFID, mobile, and barcode scanning solutions. VUEMED’s mission is to transform the healthcare supply chain into a value chain, with tools that promote greater transparency and provide more comprehensive and accurate data to improve efficiency, savings and revenue capture, enhance patient safety and care quality, and guide better decision-making. Prior to VUEMED, Arnold 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.

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Chazal and Makhanik

5 Reasons

Non-Conformance to Requirements is Holding Back Your Savings Opportunities

Every product, service, and technology should have their functional requirements or exact specifications defined by your customers, not specified by their sales representative or selected from a catalog as often happens. Because of this fact, many of the products, services, and technologies you are buying are non-conforming to requirements because of:

1. TRADITION: Customers continue to purchase a particular product, service, and technology because they “have always done it that way.” Like insisting that they need four ports on their IV catheters when there is no medical reason to do so.

2. OVERSPECIFICATION: Like tradition, customers buy products, services, and technologies that have too many components, too many features, and are too big, too small, or too robust. One of our clients had been buying patient slippers at a cost of $3.95 when a $0.99 slipper actually met their patients’ functional requirements exactly.

3. UNDERSPECIFICATION: Underspecifications include too few components, too few features, and missing functions. For example, when one of our health system clients functionally analyzed their patient garment bags, they found them to be too small at eight of their hospitals. Actually, none of their bags were big enough to hold their patients’ garments.

Volume 11/Issue 3 www.ValueAnalysisMagazine.com 29 Value Analysis 101

Value Analysis 101

4. STANDARDIZATION: Standardization assumes that one size fits all required functions for all of your customers, which is never the case in the real world. A better strategy is customization, which recognizes that 80% of your customers can accept your standardized products, services, or technologies but that 20% need either a higher or lower specified product, service, or technology. In the end, customization will save you the most money.

5. THINGS CHANGE AND PEOPLE CHANGE: I could bet you that the majority of products, services, and technologies you are buying today were specified by employees who have either retired, transferred to another department, or have left your place of employment. Yet, no one has challenged that the products, services, or technologies specified are conforming to requirements today. For example, we came across a General Requisition Form that was costing our client $180,536 annually. When we performed a value analysis study on this form, we were able to re-engineer the form and correct the huge waste of the form on nursing floors because of faulty printers for a savings of $93,994 annually. That’s what happens when things change and people change, yet no one challenges why these commodities are still being purchased.

One of the secrets to saving money with value analysis is to define the functional requirements or specifications of the products, services, and technologies you are buying. Then, have annual reviews of your top 100 categories of purchase to ensure that they are still conforming to requirements. Chances are, 10% to 15% will not conform to requirements and then can be reconfigured to reduce unnecessary and unneeded costs.

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& Utilization Management Magazine 30
Volume 11/Issue 3 www.ValueAnalysisMagazine.com 31 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/

The New Healthcare Normal: Financial Uncertainty

Are You Ready for This Challenge?

“While we have seen a stabilization in operating margins over the past several months, the trendline continues to show that hospitals will be in a tough spot financially for the foreseeable future,” said Erik Swanson of KaufmanHall. “With future COVID surges possible and challenging financial months ahead for hospitals, managing cash on hand will be critical to weathering the storm.” KaufmanHall considers this financial uncertainty as “the new normal” for healthcare organizations for the foreseeable future. Are you ready for this challenge?

No Money – No Mission: It’s Just That Simple

Despite these dire predictions, we frequently hear supply chain professionals talking about their succession, resilience, or sustainability projects, but none of these things are possible without your healthcare organization having a healthy bottom line. This can only happen with supply chain’s help to reduce 30% of their hospital, system, or IDN’s budget which has increased by 21.9% from 2021 to 2022. We know this is getting harder to do because your price savings are disappearing and your standardization is substantially completed. However, there are still millions to be saved in wasteful and inefficient consumption if you know how and where to look for them. That’s why new supply chain expense savings opportunities could actually be much easier and better than you think if you know where you stand.

Volume 11/Issue 3 Healthcare Value Analysis & Utilization Management Magazine 32
Utilization Management

Utilization Management

Are You Flying Blind Or Do You Know Where You Stand?

We are often asked how a healthcare supply chain organization can get better than just good. Our answer is always to employ key performance indicators (KPIs) to quantify, qualify, and measure your supply chain performance over time. This way your supply chain team has goals to shoot for, milestones to meet, and insights into their operations. On an operational level, KPIs provide a window into your supply chain operations (i.e., expenses, service quality, logistics, etc.) to determine whether or not your supply chain is on track or needs improvement.

Most progressive healthcare organizations are applying KPIs (or quantifiable measurements of performance over time for a specific purpose) to highlight aspects of their financial, employee, productivity, and customer performance, such as, average treatment cost, claim denial rate, bed occupancy rate, etc., to create a culture of success. It should be clear that without KPIs your healthcare organization is flying blind! Yes, we could make this same statement about supply chain management in most hospitals, systems, and IDNs.

Over $200K in savings discovered through comparative KPIs

Are You Avoiding Blind Spots In Your Supply Chain?

This same KPI success methodology employed by your healthcare organization in other areas of your operations can be applied to supply chain management to avoid blind spots. For you see, with KPIs you are measuring your success versus just setting targets, objectives, or even comparing yourself to peers for even greater success. KPIs can be financial, operational, or functional, and deemed mission critical for your supply chain operations. For instance, on a recent client meeting we were asked to establish “Suture Product KPIs” for their hospital (Figure 1), which resulted in the supply chain and perioperative department being able for the first time to know where they stand on their sutures beyond just price and standardization. This data enabled them to justify a thorough value analysis review to weed out inefficiencies, eliminate waste, and enhance their storage and ordering processes. How else would they know they had over $200K in savings available to them without comparative KPIs?

Refocusing Your Cost Reduction Efforts Could Be Easier and Better Than You Think

Now that your price cost reduction efforts have been stalled due to inflation, stagnation, and vendor push back, saving money is still necessary for your healthcare organization’s survival to continue to reduce your labor and non-labor costs. The only question is how to do it. The answer is always to employ key performance indicators to measure, monitor, and manage your performance. That’s why refocusing your cost reduction efforts could be easier than you think!

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Volume 11/Issue 3 Healthcare Value Analysis & Utilization Management Magazine 34
Utilization Management
Robert T. Yokl
Figure 1: Sample Supply Chain Labor Comparative KPIs




Volume 11/Issue 3 www.ValueAnalysisMagazine.com 35 The Ultimate Supply Chain Radar System!
US SHOW YOU HOW EASY THE NEXT GENERATION OF BIG SAVINGS CAN BE WITH A FREE NO OBLIGATION TEST DRIVE OF THE LEADING SUPPLY UTILIZATION MANAGEMENT SYSTEM IN HEALTHCARE TODAY! www.ClinicalSupplyUtilization.com Missing Utilization Savings Opportunities Can Do Damage to Your Bottom Line if Not Detected! IV Sets Lab-Reagents Oxisensors Lab-Test Kits Office Supplies Defib Pads IV Catheters Davinci Robot Supplies Telecom Services Transcription Grafts & Tissues Exam Gloves ISO Gowns Respiratory Masks Laundry Linen Ablation Catheters Orthopedic Softgoods Coronary Stents Hand Soaps Urologicals Patient Warming Blades & Burrs Neurostimulators Electrosurgical Supplies Skin Prep Anesth-Spinal Pacemakers Infection Control Wipes SCD Sleeves Endomechanical Closers
Ortho Bone Cement Contrast Media
Volume 11/Issue 3 Healthcare Value Analysis & Utilization Management Magazine 36 Find Out How You Can Automate This Reporting Today www.SavingsValidator.com

Getting Beyond Like and Don’t Like In Value Analysis

If I had a dollar for every time I have heard the terms “like” and “don’t like” when referring to a product, service, or technology in a value analysis meeting or conversion setting then I would be a very rich person. Let’s face it, this is something that happens just about every day when products are sent up to nursing floors to see if the clinicians “like it” and will accept converting to this new product. But I hate to break it to you folks, using “like” and “don’t like” is so ambiguous as well as subjective. There is better and more efficient terminology that will not only clarify exactly what the end customer means but also eliminate problems down the road that will inevitably happen due to the vagueness of the terms “like” and “don’t like.”

A Lifetime Lesson Learned Still Sticks With Me Today

As a Junior Value Analysis Practitioner in my early days (25 years ago actually) with SVAH Solutions, I would regularly go out and review cost savings opportunities with VA teams and sometimes even with the end clinicians and doctors themselves. Back then we had pretty good data and could back it up with quality alternative products. In one case, I presented a lower cost endomechanical stapler alternative to a VA team and the surgeon who trialed the product was there and basically shot down the alternative. He said that he “didn’t like it” and that it wouldn’t work for him. With my tail between my legs, I came back to our offices and spoke to my boss Robert T. Yokl (yes, my father) for which he asked me what happened to my savings recommendation to the surgeons. I told him that the doctor did not like the product so it got rejected.

Robert T. pulled me into a conference room and asked me to explain exactly what happened. I then resolved myself to, “I’m not a clinician and he didn’t like the stapler, so it ends here.” Robert T. then laughed and said that it does not matter that you’re not a clinician and the fact is that you let the surgeon off the hook with the “don’t like it” endgame. Robert T. pulled me into a conference room and asked me to explain exactly what happened. I then resolved myself to, “I’m not a clinician and he didn’t like the stapler, so it ends here.” Robert T. then laughed and said that it does not matter that you’re not a clinician and the fact is that you let the surgeon off the hook with the “don’t like it”

Volume 11/Issue 3 www.ValueAnalysisMagazine.com 37 Perspective

endgame. He said that when they push back by saying that they don’t like something in a product you have to ask the question, “What exactly don’t you like functionally? Is it the grip angle, handle tension, length, color, manufacturer, etc.?” Bottom line, all sorts of lights went off and low and behold I just needed to hang in there and find out exactly what they didn’t like and work with that information to find something that met their functional requirements.

What Are We Really Trying to Assess From the Feedback on Product, Service, and Technology Purchases?

We are trying to validate the functionality and reliability of the products that have been brought forth from a value analysis team and/or contract conversion, plain and simple. When you send a product up to a nursing floor or surgical suite, you want to validate that the product meets the end customer’ s functional requirements reliably. Instead of the surgeon telling you that he does not like the new endoscopes or the surgical energy device, what does that tell anyone? You need to know exactly what they don’t like in terms of functionality right up front. This will allow you to work with the vendor representatives to find something that will meet the end clinician’s functional requirements. It sounds so simple, but it is too easy to fall into the “like” and “don’t like” trap.

Asking the Right Questions Is Extremely Important with Value Analysis

I urge you to get away from “like” and “don’t like” terminology in your value analysis program and focus on the true definition of value analysis and that is functional analysis. This will give you the exact specifications that you can turn around and match up to the contracted products in your formulary. Using “like” and “don’t like” will only cause confusion and more than likely a heck of a lot more work, so save yourself and your teams a whole lot of time and just stick with functional questions. I’ll leave you with this: Every product has a primary function (must do’s) and then secondary functions, and even the features of the products have functions. They either meet the clinician/surgeon/customer’s requirements or they don’t.

Perspective Robert W. Yokl
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