Finding success in
value analysis projects
Healthcare
Purchasing News asked nine value analysis professionals to recount
some of the success stories they either experienced first-hand or
second-hand.
My favorite project
involved Huber needles. Our Value Analysis projects are triggered
by cost savings opportunities, quality improvement opportunities,
or both. We are not just concerned with decreasing costs or
increasing revenue. We are also concerned with improving
clinician/patient safety and quality outcomes. Our supervisor is
fond of saying, ‘If all I needed was people to cut costs, I’d have
hired accountants.’ Being clinicians by trade, we can wear both
clinical and business hats.
With Huber
needles, we completely converted to a new product that required
months of intense inservicing for many of our 2,000 nurses. This
was not an easy sell. Again, even positive change can be
difficult. TWWADI (The Way We’ve Always Done It) rears its ugly
head frequently as a rationale for resisting change. Our
hypothesis was that by converting to a different type of Huber
needle with a different safety mechanism, we’d reduce the
needlesticks experienced by our nursing staff and therefore
decrease their exposure to blood-borne pathogens. Prior to the
project, our clinicians were experiencing about six needle sticks
annually (from more than 22,000 opportunities) via Huber needles.
After conversion
to the new (and slightly more expensive) product, only three
needle sticks have occurred in 14 months…and each of those was
from one of the old needles that nurses had hidden away because
they were resistant to change! We’ve actually eliminated needlesticks
from this device. Our hypothesis was not only proven but eclipsed.
Calculating the savings from Worker’s Compensation claims,
prophylactic pharmacotherapy, and the intense anxiety surrounding
a needle stick injury far outpaces the minor cost increase for the
product. The project was successful because the clinicians were
process every step of the way and the administration was
supportive of the philosophy: Spending a little more on this
product will make our staff safer. All they required was an
appropriate follow-up to determine the project’s return on
investment.
– James Russell,
R.N.-BC, MBA, Value Analysis Facilitator, VCU Health System,
Richmond, VA
[We switched] from
disposable laceration instrument trays to reusable trays in the
emergency department. The physicians were requesting higher
quality instruments to work with and had provided multiple
examples of failed instruments impacting the quality of their care
delivery in the ED. Vendors had offered multiple options to
increase the quality of the instruments in their disposable trays,
and/or options for custom trays that would cause a significant
increase in the cost of this high volume item.
In order to
increase the quality of the instruments while not increasing cost
we came up with the idea of assembling reusable kits that could be
sent down to SPD for reprocessing and returned to the ED. SPD was
more than on board and even volunteered to do an assessment of the
reusable instruments available to us from our contracted vendors
in order to get the highest quality at the lowest cost. Value
Analysis looped in the department director, educators and
physicians and technicians to garner their support and ideas for
implementation. The technicians were the key here in that they
were the ones pulling the trays for the procedures as well as
picking up the rooms after. They made it their own project to
educate and manage the process which worked extremely well.
As a result of
these efforts the physicians got the quality they needed to
seamlessly provide care to our patients, and the ED department was
able to lower their costs on these trays over $25,000 annually,
and SPD was able to document their participation in an improvement
project made possible by their willingness to support the
additional items to process. The savings covered the cost of the
instrument purchases in the first three months.”
– Karla Barber,
R.N., Director, Clinical Value Analysis, Mountain North Denver
Operating Group
Our client sought
to reduce costs through improved procurement, particularly through
a process where physicians and clinicians were heavily involved in
the decision-making. The [value analysis] team at Nexera Inc.
worked closely with hospital stakeholders to help implement a
physician-led VA team structure, and then worked with the client’s
supply chain professionals to assess the organization-wide spend
by clinical service line. Once the service-line spend was
established, the VA team was given responsibility for clinical
decisions and service-line spend. Nexera worked with the
physician-led VA team to create sustainable procedures that
ensured contract standardization, utilization, and compliance
throughout the organization. Within 19 months, the VA program was
able to deliver $22 million in savings for this hospital.”
– Kristin Boehm,
M.D., Senior Advisor,
Nexera Inc., New York
Recently an IDN
approached a clinical preference item (surgical mesh) through
evidence. What did the research body show on the appropriate use,
length of stay, outcomes, infection rates of specific mesh? Once
the body of credible research (not studies by the vendors nor
white paper statements) was revealed the surgeons made very quick
and evidence-based decisions on which mesh to use and when. Once
the surgeons had indicated the mesh the evidence indicated they
standardized their procedures and supply chain was able to
negotiate a tremendous savings. A ‘win-win,’ highest quality
through standardized process and products with surgeon support!
– Dee Donatelli,
Senior Vice President, Provider Services,
Hayes Inc., Lansdale, PA
Efficiency savings
can be obtained by taking a ‘divide-and-conquer’ approach to your
value analysis process. Gathering and organizing stakeholder
feedback and product information is a tedious task regardless of
the size of your organization. A customer of ours shared a pro
forma that revealed over $100,000 per year in efficiency savings.
Greater efficiency
can be realized in our system by automatically segmenting
questions to the appropriate audiences. For example, the
sponsor/champion will answer a specific set of questions (i.e.,
anticipated volumes, do you have financial interest, etc), vendors
will supply some objective answers regarding the product
(manufacturer, model number, pricing, 510(k), etc), and internal
hospital stakeholders answer questions based on their role (i.e.,
financial, clinical, contracts, safety, etc).
– Tim Hopkins,
President, MedApproved, Hudson, OH
A value analysis
best practices success story at an organization involved the
savings of $995,000 through the reduction in the variation and
utilization of ‘Infuse.’ Upon the review of the spine fusion
procedure data, it was apparent that there was wide variation in
practice among surgeons with the use of ‘Infuse.’ It was
identified that the largest size of ‘Infuse’ was being used in the
cases of several surgeons, leading to waste in the majority of
cases as well as variation among surgeons in the use of ‘Infuse.’
The key reasons for
the success of the project include:
1. It
incorporated both clinical and financial data for optimal savings.
2. A project
plan was developed to identify the executive sponsor, key
stakeholders (physicians), charter, goals, objectives and
timelines.
3. Clinical
and financial data were analyzed and presented to the team along
with literature, clinical case studies and outcome data.
4. Physician
engagement and support was critical in the implementation of
recommendations for reducing the variation in practice.”
– Nancy Masaschi,
Senior Director, Clinical Resource Management,
MedAssets,
Alpharetta, GA
Data, collaboration
and education were the keys for one of our members reducing their
annual spend on bed rentals by $233,000. In our role of supporting
their value analysis committee and through our work on utilization
benchmarking we identified an opportunity, then used the data
analysis and best practice considerations to foster discussion
across the value analysis team. The data helped identify the
opportunity. The collaboration of the value analysis team allowed
them to realize that they were over relying on bed rentals.
Through education around cost and process the clinical team was
able to understand the cost impact of calling for a rental bed,
better understand when they were really required, while ensuring
patient quality was not sacrificed.”
– Mark Scagliarini,
Senior Vice President, Supply Chain Services,
Yankee Alliance,
Andover, MA
Over a two- year
period of time the University of Virginia Medical Center has
reduced its pressure ulcer rate in half. Through the collaboration
of nursing practice, WOCN, nursing value analysis team and supply
chain a phased approach was developed that included product
evaluations, streamlining of continence care products, the
creation of unit-based skin champions and updated bed making
practices. Methods were established for gathering baseline and
ongoing [pressure ulcer prevention] rates through audits as well
as using product evaluations and value analysis processes to
calculate future costs. Using national cost averages, UVA has
prevented the equivalent of 577 pressure ulcers with related
savings of $5 million. This equates to $10 in overall cost
reduction for every $1 spent.”
– Barbara Strain,
MA, Director, Supply Chain Analytics, University of Virginia
Health System, Charlottesville, VA, and Past President,
Association of Healthcare Value Analysis Professionals (AHVAP)
In an effort to
reduce the cost of linen, an analysis was performed that
determined the cost per pound rate was well within competitive
rates. However, the hospital's utilization of linen exceeded 30
percent of benchmark levels. Supply Chain staff, clinicians, and
Linen Services staff met to discuss these findings and developed a
strategy to pursue changes on how linen would be used in an effort
to achieve benchmark levels.
Supply Chain worked
with Linen Services to quantify departmental usage patterns;
clinicians worked with Linen Services to obtain information
related to linen utilization best practices; and Supply Chain
worked with the clinicians to evaluate the impact of proposed
practice changes. In the end, new linen usage protocols were
established, department level utilization tracking was compared to
baseline trends, then monitored and reported. Those departments
that showed the most improvement without impacting customer
service ratings were rewarded quarterly.
Working
collaboratively with key stakeholders towards a common goal is
illustrated here. Incorporating the knowledge and skill sets from
those who are invested in the decision process is essential for
end users to take ownership of the results generated from any
value analysis effort.
– S. Scott Watkins,
Vice President, Supply Chain Performance, OMSolutions,
Owens &
Minor Inc., Mechanicsville, VA
Instead of signing
off on a new wound care group purchasing contract being offered
that would have saved them a few thousand dollars, one of our
clients decided to pursue with their value analysis team an
investigation of their wound care program with the goal of
reducing their pressure ulcer rate. During this initiative their
value analysis team reviewed its use of patient transfer devices,
skin care and incontinent care products, ultra-absorbent pads, and
its bed-making process.
In doing so, this
organization uncovered inefficiencies (in the use of patient
transfer devices, the efficacy of the skin care products, value
mismatches with absorbent pads, and lack of consistent process in
bed making). Once these inefficiencies were corrected, our client
reduced its ulcer rate by 10 percent while reducing its total
wound care supply spend by $262,000 annually.
The lesson to be
learned here is never stop at your first best savings idea (e.g.,
GPO contract savings of a few thousand dollars), but instead move
on to investigate the family of products and services that
surround the product or service under investigation. This way, you
won’t leave hundreds of thousands or maybe even millions of
dollars on the table – untouched!”
– Robert T. Yokl,
Chief Value Strategist,
Strategic Value Analysis in Healthcare,
Skippack, PA
HCA developed an
initiative on reprocessing single-use devices with a third-party
vendor at each of our acute care facilities. We quickly realized
that this initiative would impact many stakeholders within our
facilities and we asked that this initiative be included through
their Supply Management Action Teams (SMAT) meetings. Not only was
this a key to drive supply expense savings it is also the right
thing to do for our environment and supported our ‘green’ efforts.
In order to ensure
success with this program it required buy-in at the highest level
of the organization and appointing an administrative leader
champion. Working with our third-party reprocessing vendor we
provided detailed information about the program, which included
explaining how the program works, quantifiable information about
savings, environmental impact and social responsibility
(sustainability) should be delivered realistically and clearly.
The next step was
to provide physician communication first by identifying a surgeon
champion. This included presentations at medical staff
meetings, providing written communications and e-newsletters to
deliver the message.
The next step was
to provide staff communication, which requires education for the
staff to understand the whys, the hows and the details behind this
program. We utilized our third-party reprocessing vendor
representatives to assist with a launch campaign throughout the
facility. Again we identified staff champions to help deliver the
message as well.
Once the program
was launched we monitored individual hospital results. It is
important to ensure that the reprocessed devices or products are
being used. On a regular basis we shared product savings, waste
savings, as well as opportunities that might exist. It is
extremely important to share this information with your physicians
and staff. They will need to hear that their efforts are paying
off.”
– Steve Tarkington,
Vice President,
Parallon Supply Chain Solutions, Brentwood, TN |