October 2008 - Product & Services

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October 2008

Products & Services

New Technology

Sterilization, decontamination of instruments via new MIDAS process prevents spread of CJD

A division of Nevada-based Plasma Etch Inc. – Plasma Sterilizations LLC – and the University of Edinburgh’s commercialization arm, Edinburgh Research and Innovation (ERI), have agreed to license a new decontamination process for surgical instruments that employs plasma-treatment systems to remove microscopic proteins, or prions, that are resistant to traditional cleaning methods and cause rare and incurable neurodegenerative diseases such as Creutzfeldt-Jakob Disease (CJD) in humans and mad cow or Bovine Spongiform Encephalopathy (BSE) in animals.

Many healthcare professionals discard instruments such as neurosurgical scissors after a single use when they’re used for procedures likely to leave behind CJD-infected tissue as prions are resistant to conventional chemical or physical decontamination procedures, according to ERI researchers.

ERI’s new process, or MIDAS, will effectively reduce the incidence of CJD infection and number of operations cancelled due to contaminated instruments, according to ERI researchers. The team at ERI also reports that their studies demonstrate that the MIDAS process is at least 1,000 times more effective than traditional cleaning methods and does not damage surgical instruments.

The MIDAS process uses radio frequency (RF) gas plasma, a high-energy ionized form of gas, to clean the surface of the instruments and break down infectious biological tissue into innocuous gases, according to ERI researchers. Greg DeLarge, president of Plasma Etch, added that the MIDAS process builds on current sterilization methods and occurs after surgical instruments are thoroughly washed en route to being steamed. ERI officials have applied for a patent. For more information visit www.plasmaetch.com/

Blood donations could one day become unneccessary

An American team has found a way to turn the parent cells of other types, human embryonic stem cells, into significant quantities of functional oxygen-carrying red blood cells. Tests could start on patients by the end of next year and the advance holds out the promise that one day "blood farms" could provide a versatile source.

The research, which appears in the journal Blood, was carried out by Advanced Cell Technology, Worcester, MA, and its collaborators at the Mayo Clinic and the University of Illinois, shows for the first time that the oxygen-carrying capacity of these blood cells is comparable to that of normal blood transfusions. And it should be easier to ensure that blood created this way is free of contamination by disease agents, such as AIDS and variant CJD. (Telegraph-UK)

Infusing value analysis in contracting strategies

It’s not just a pricing or product evaluation and selection game

by Rick Dana Barlow

Supply chain management in your facility just hired someone either fresh from academic life or from a consulting firm or from the procurement world outside of healthcare to round out your team. Most likely you were instrumental in recruiting him or her. Fortified with textbook knowledge or non-healthcare industry experience, this person must hit the ground running in the hospital as you face growing pains.

Healthcare Purchasing News questioned some of the thought-leaders and key executives in the field for sage advice they as seasoned professionals would give this person to help him or her incorporate value analysis into his or her contract management philosophy. Specifically, we asked for five "can’t-miss" strategies that would lead to some winning results right out of the gate.

We asked that each go beyond the obvious and focus on individual professional practice, focusing on three key questions:

1. How do you define value analysis, delineating what it is versus what it’s not?

2. How do you choose the right people within your facility and department to work with you on any value analysis project, particularly in a contract management exercise?

3. How do you choose the right products to tackle first?

We sought the kind of experiential wisdom that each wishes he or she had when they launched their careers, along with the key fiscal and operational qualms and quirks of the job that hospital materials managers tend to overlook.

Some of what they had to say might be new revelations; others might be useful reminders. Either way, we’ve collected more than 30 helpful hints and useful tips from experienced and knowledgeable industry sources and compiled them in a helpful package you can consult in print and online all year long.

Defining the concept

Delineating what value analysis is versus what it is not can be subjective and all too often misconstrued. The Association of Healthcare Value Analysis Professionals (AHVAP) defines it this way: "A systematic process to review clinical products, equipment and technologies to evaluate their clinical efficacy, safety and impact on organizational resources."

"One of the common fallacies and/or misconceptions is that value analysis is limited to driving down cost through pricing alone," said Cindy Christofanelli, director, value analysis, Memorial Health System, Springfield, IL, and past president of AHVAP. "Value analysis is a process and includes many facets. While several entities have identified steps or components to the process, AHVAP has defined [eight] key components that can be applied to most value analysis projects at a healthcare facility. [See figure 1.] Each of these components has multiple steps within it. Others will often think that merely by placing an R.N. or clinical person in purchasing they are practicing ‘value analysis.’ Wish it was that simple, but it is not.

"Certainly nurses have been integral to the deployment of value analysis in healthcare," Christofanelli continued, "but to be successful on all fronts it takes a team to consistently deliver results year after year after year. If you only focus on price, you are underestimating the overall value that a robust, team approach can deliver and sustain. As you evolve into more clinically sensitive venues the insight that nurses, as well as other clinical professionals [bring], will be critical to ongoing success."

Dee Donatelli, VHA, Inc.

Dee Donatelli, vice president, VHA Inc.’s Supply Chain Custom Services, classified healthcare – not just value analysis – as a complex industry that by nature is collaborative, largely built on clinical expectations and an all-encompassing approach.

"Look across a typical patient stay in the hospital and you will see a variety of clinicians and other staff who expect to be involved," Donatelli indicated. "In spite of this expectation, many do not understand healthcare economics or the impact that supply chain savings can have on the bottom line. Traditionally they have viewed materials management in one of two ways: The department who gets them the products and supplies they need or the department that has just substituted a new product, didn’t inform them and of course, ‘it must be cheaper!’ While we all can learn more about healthcare economics, clinicians do understand and are committed to safety and quality for the patients they care for and as supply chain experts we need to capitalize on this commitment."

VHA’s Clinical Quality Value Analysis is a trademarked program that includes a defined decision making process that considers quality, safety and cost for products and services, according to Donatelli. "It is collaborative, multi-disciplinary, engages executives and involves physicians in a way that elevates supply chain imperatives to an executive level and moves responsibility for supply chain decisions and savings from the materials management department to the entire organization."

Nancy Senne-Mikeska, R.N., MSN, CNOR, clinical resource coordinator, Edward Hospital, Naperville, IL, defines value analysis as "a structure that incorporates clinician and physician decision making into the process of supply acquisition while creating a cohesive relationship between clinicians, purchasing and admin-istration. It is not a meeting for comparison shopping or intimidation from physicians," she added.

David Klumpe, Broadlane

While value analysis may be defined as a process to engage clinical and non-clinical end users of equipment, services and supplies in the supply chain decision-making process, participants often stumble over speed bumps, according to David Klumpe, executive vice president, enterprise accounts, Broadlane Inc., Dallas.

"Many hospitals focus on supplies only through these processes and do not also focus on equipment and services," Klumpe noted. Furthermore, the "ideal" value analysis process puts end-users in charge of standardizing use of vendors, products and practices within their area of expertise; gives the clinicians, through the [value analysis teams], the delegated authority to make vendor, product and contract choices, not the purchasing or materials department; focuses on quality, safety, service and cost, not just cost, according to Klumpe.

But they can fall short on accountability, Klumpe added. "Many VAT processes are contract or price-centric and do not focus on clinical practices, patient safety and service received from vendors," he said. "Many hospital VAT processes are used to gain clinician input into vendor and product choices but do not hold them accountable for implementing what they agreed to do."

Choosing the right people

Selecting the appropriate players to participate in any value analysis and contracting process not only has strategic implications, but political ramifications as well. That’s why flexibility must be inherent to the process, sources say.

"As the value analysis process has evolved over time the required skill set for an effective team has morphed," Christofanelli said. "Clearly it is and must be data-driven and fact-based, especially as it relates to clinical preference items. People often refer to these as ‘physician preference items’ or PPI, however, it is my experience that physicians are not the only population in a healthcare organization with preferences. It is imperative to involve the end users in the process on the front end and not after the fact. Oftentimes nurses are well-positioned to lead this type of initiative in healthcare. However, they will require the skills and assistance of others to package the information in a format that can be clearly and succinctly communicated to physicians, clinicians and administrative leaders for action. Every project is different depending on the complexity and product line involved."

Each person should possess a basic repertoire of skills, according to Donatelli. "Look for credible change agents who are well-respected within the organization or their departments," she said. "They should be good communicators – individuals who have the ability to understand and take into account the requirements and opinions of others and communicate the work of the team."

Senne-Mikeska develops value analysis teams with responsibility for specific areas, a typical strategy employed by many hospitals. For example, one team may handle products used on nursing units and in clinics, while another may specialize in soft goods. "Oftentimes a product will require input from those outside the team," she noted. "The best way I have found to identify which people to work with is by including one or more stakeholders from those that have decision authority [who] will be affected by outcome, have influence over the outcome or expertise in the specific product. The stakeholders tend to work harder and come to a consensus regarding the decision due to their relationship with the product."

Earmarking product targets

Choosing which products, equipment and purchased services to tackle first, depends largely on a facility’s clinical and financial needs and is fueled by trust between end users and supply chain management.

The general pattern starts with "basic hospital commodities or staples to establish needed lines of communication, trust and sense of achievement through tangible savings and positive hospital operational impact," Klumpe said. "As processes advance, confidence will build to tackle more complex expense and product categories and ultimately physician preference products and equipment."

Donatelli stressed the pursuit of early wins with products that are less complex and have likelihood for less resistance, such as any that involve fewer stakeholders or departments. That means not starting out with physician preference items. "Going for early wins not only helps build momentum and energy within teams but also allows the team to review their process and ensure that ‘bugs’ are worked out," she added.

Nancy Senne-Mikeska,
Edward Hospital

Senne-Mikeska views the choices as more of a multi-disciplinary and multi-level team-building exercise from different areas of the hospital with an ode to
a chess match on behalf of patients. Orthopedic softgoods that are used in the operating room, emergency room, rehabilitation unit and nursing floors and may come from five-to-10 manufacturers represent one example. "A project like this allows people from various units/specialties to come together to discuss the needs of their patients," Senne-Mikeska noted. "Each floor believes that their patient population is unique, requiring the product to be purchased from a specific manufacturer. Once they begin talking to one another they realize similar products from different manufacturers are used on different floors. As they examine the products they begin to realize that the various areas have very similar needs in order to provide patient care. They begin to understand that by decreasing the manufacturers, the ordering process is simplified, inventory decreased, pricing is lower, staff become more knowledgeable on the products due to the limited number of products, we ultimately improve our patient care as the clinician is able to select the most appropriate product to meet the patients needs."

For Christofanelli, there is rhyme to reason. "We look at pain gain," she said. "How much pain will you have to go through and how much gain will you net? Both clinical and financial outcomes have to be included. We work collaboratively with our team to define the gain and explore and rank the pain it will take to achieve it. This process assists with prioritization of the plan. Administrative support at the highest levels of your organization is critical, especially if you are targeting clinically sensitive items."

20 tips from the pros on value analysis success strategies

HPN asked supply chain experts to weigh in from their experiences what they felt were their most valuable tips and lessons they had learned throughout the years.

• Get the definition right. The name value analysis has high name recognition in healthcare, but this term is too often used to inaccurately describe, any and all, supply cost management initiatives (i.e., standardization, GPO contract evaluations or price shopping). This isn’t value analysis at all.

What value analysis is all about is "the study of function and the search for lower cost alternatives" as opposed to what you are doing now. This isn’t my definition but Larry Miles description, who was General Electric’s first value engineer (back in the 1940s), and the father of value analysis.

Miles based his definition of value analysis on the fact that "When most people evaluate a product, service or technology, they only look at the product, service or technologies’ aesthetics and not its reason for being… function." That’s why Miles preached that "The more one understands the functions of a product, service or technology, the more opportunities there are for dramatically reducing the cost of the product, service or technology. (This is accomplished) by substituting, and/or in some cases eliminating an element of a product, service or technology with an equal or better product, service or technology."

• Must be organized to save. Most hospitals, systems or integrated delivery networks have loosely defined committees or team architectures that lack steering committees, administrative champions and project managers. To be truly effective in value analysis, healthcare organizations need all of these success ingredients to be wildly successful.

• Find the right people. For years healthcare organizations have selected their value analysis team leaders and team members by their titles or their influence in their organization and have been disappointed with their results. A much better way that we have found to do so (as opposed to chance or happenstance) is to have a "Competency Test" based on the characteristics that you have observed over time that make the best value analysis team leaders and members. Think about it. Why would you hand over multi-million dollar decisions to just anybody that walks in the door?

• Look at the right things. There are two ways that I know of to identify your best value analysis candidates: Look at all of your products starting with your highest spend items or employ value analytics (data, statistics and analysis) to know with certainty which products are out of misalignments. I recommend the second choice since it will make your job a whole lot easier, more productive and profitable.

• Employ the right process. Larry Miles developed the 6-step value methodology to determine "best value" in the things we buy. This is followed religiously by value analysis leaders and practitioners in all industries – not just healthcare. Conversely, if you are not following the value analysis process I just talked about then you aren’t practicing value analysis at all – you are doing something else.

– Robert T. Yokl,
president and chief value strategist,
Strategic Value Analysis In Healthcare, Skippack, PA

Support is the key

• Must have support and interaction from the CEO, COO and vice president on the committee.

• Market the philosophy of value analysis to your peers and other directors because you need their buy-in.

• Make sure you understand what value analysis is and how it works. It includes quality, how the product is clinically used, how it fits within the financial impact and how the products are managed logistically, as well as the positive outcomes of product use.

• Must have a technology assessment avenue for technology- and finance-specific product questions.

• Through the whole process, you cannot communicate enough to all parties involved, especially the owners of the new product request.

– Robert E. Shackelford, FAHRMM,
director, purchasing/materials management,
Cox Health, Springfield, MO

• Build relationships and infrastructure first. New leaders will be much more effective if they seek first to understand the organization and their internal operations. Engaging key allies, both the informal leaders within the department and the influential leaders throughout the organization, is a powerful strategy to become fluent and knowledgeable regarding the burning issues and challenges that need to be addressed. By developing an ongoing dialog and formal strategies around communications and meetings, the new supply chain executive will be able to tap into the existing knowledge base to gain an understanding of the customer needs at all levels. With regards to the departmental operations, it is critical for a new leader to gain an understanding of the technologies and services being deployed and delivered, so as to begin developing a complete gap analysis between the services that are currently available, versus what the future vision should include.

• Learn the healthcare business from the ground up. New leaders – especially those without healthcare experience – should always spend some time walking in the shoes of the patient, the supply technician, the diagnostic technician, the nurse, the cardiologist and the surgeon. Go into these experiences with the goal of learning how these key customers obtain your supplies and services, and what impacts their knowledge, perception and evaluation of your services. As you begin to identify their needs and requirements, the new supply chain executive can also begin to strategize the specific types of programs that will receive the support of these new allies while at the same time advancing your agenda for the delivery of high-impact change.

• Leverage the high situational power and external expertise that comes with being the new supply chain leader – elevate supply chain issues to high visibility and traction. It is critical for new supply chain executives to recognize that supply chain issues and resources are generally considered low priority and unaffordable. With the extremely high demand for healthcare capital investment, and the extremely low availability of resources to meet that demand, the new supply chain leader must make it a priority to obtain critical resource allocation. This can only be done by raising the visibility of the entire supply chain process and by increasing the awareness and knowledge base of the organization’s senior leadership team. The new supply chain executive should seek to immediately translate the knowledge, issues, gap analysis and future vision into one or more executive team presentations that will garner support for the purchase of the required infrastructure elements.

• Obtain funding to support the development of key infrastructure improvements. This should cover and include new systems that will provide critical supply cost management services and informatics such as a materials management information system with a strong healthcare application and user base, ERP reporting and data extraction, data enrichment programs, technology such as departmental inventory systems with interface to MMIS, or advanced contract price matching services through the GPO or EDI provider. Gaining executive support for these investments and the appropriate expert and skilled staff will ensure these systems are implemented effectively.

• Initiate and maximize external partnership relationships to obtain support and expert services to support the organization in its total spend management objectives. In order to jump-start the analysis of current spend patterns and to identify a roadmap for value analysis cost improvement activities, a comprehensive analysis of all commodity expenditures is a vital process. Evaluate the value add services provided by the GPO, to obtain a comprehensive analysis pointing to all available cost savings opportunities. The analysis should provide complete information regarding not only the organization’s spend patterns by commodity group, but also the contract requirements, levels of standardization, rebate information and current contract participation indicators. The completion of this type of in-depth analysis should identify both the low-hanging fruit of products representing an exact match to the GPO contract portfolio, but also the more lucrative product conversion opportunities. With this analysis in hand, the new supply chain executive will be able to engage the value analysis team in significantly important and prioritized projects, evaluations and successful cost reduction activities.

– Patricia Klancer,
senior director, supply chain, Diagnostix Services,
Amerinet Inc., St. Louis

• You must have buy-in and backing from senior administration. The support or lack thereof by senior administration influences the outcomes in the review of physician preference items, and political sensitive issues. Their support increases visibility within the facility and promotes the review of products and services across all lines of the organization. Having the most fully successful program can be compromised without this endorsement.

• Know what value analysis means in your organization then reinforce or reeducate. Clinicians often think value analysis is just about pricing and getting the cheapest product to use. Material managers may think value analysis only applies to commodity type items and does not have a component in contract negotiations. Senior administration wants to know how the bottom line is impacted and which physicians are going to be crossing their doors. Value analysis is balancing the clinical aspects of a product, clinical outcomes and appropriateness of usage with the best financial scenario for your specific organization. If you sacrifice one for another it can be to the detriment of the clinical and financial elements and to the overall credibility of the process.

• Educate vendors on your expectations and process; and ensure staff helps to enforce. Once vendors know your expectations and see that the organization is intending to stand behind the process, the vendors will work within your guidelines to ensure their products get reviewed appropriately.

– Jeannie Vaughn,
value analysis director,
Cape Fear Valley Health System, Fayetteville, NC

• Achieve initial successes quickly. Don’t start out with the biggest project first. Smaller, easier, more quickly achieved successes help to reinforce the benefit of and allow you to tweak the process. If you start too big, because of the time factor involved with larger projects, you can lose interest of the team members and lose momentum since the value of the overall process has not been validated.

• Choose your leaders and participants wisely. Consider those who are respected by others and can help to obtain buy-in from others; those who are knowledgeable about the product, how it is used, other like items in the system, etc. Be multidisciplinary and multilevel in your approach (surgical tech to manager /director of the operating room); it allows you to get to details that would be missed if only the contract (pricing) itself is being reviewed.

– Tim Berkey,
principal,
Premier Consulting Solutions, Charlotte, NC