John Mateka, FAHRMM, executive director of
supply chain operations, Greenville (SC) Health System, thinks he knows why.
And he might be onto something.
"We got tapped for $4.6 million in fiscal
year 2013," Mateka said. "We could have done [much] more but we were not
permitted to ‘dabble’ outside the supply chain stuff." Here’s the
eye-opener. "I really believe CEOs, CFOs and COOs see value analysis as not
much more than a modern approach to supply chain management, and not a
concept or process to maximize efficiency and eliminate waste. That’s why I
always supported the ‘Resource Management’ label as opposed to Supply
Chain."
Further, Mateka addressed concerns that
value analysis may be roped into the storeroom.
"[I] hate to admit [it] but value analysis
may be disadvantaged by typically being housed in Supply Chain and
predominately producing supply chain savings," he lamented. "In healthcare,
supply chain has made great inroads in identifying and implementing
non-labor expense reduction. However, when it comes to crossing the
operational clinical line and entering in the clinical silos, such as
nursing, infection control, risk management, [operating room], etc., it’s
difficult to be part of this silo club. There are huge opportunities in the
delivery of healthcare along the admission, treatment, outcome, billing and
readmission continuum. Unfortunately, most of [it] is outside the typical
supply chain arena."
Busting borders
So how can value analysis "escape" the
confines of supply chain management and serve as a bridge between supply
chain professionals and clinicians as an example for the C-Suite?
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Tim Hopkins |
"Due to the volume and complex nature of
products being introduced in healthcare, it’s critical to have someone who
can effectively communicate the physicians’ [and] clinicians’ requests to
those people in supply chain tasked with staying within budgetary
restraints," said Tim Hopkins, president,
MedApproved, Hudson, OH. "Value
Analysis is the bridge between these two parties helping to strike a balance
between providing the best medical care possible while maintaining fiscal
responsibility."
Value analysis evangelists point to
communication and active clinician recruitment, which takes an inordinate
amount of time to be effective — time that may not be accessible, given
extraordinary budget demands.
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Dee Donatelli |
"Clinicians are not focused on cost so
perhaps we need an alternate approach to capture their attention," said Dee
Donatelli, senior vice president, Provider Services,
Hayes Inc., Lansdale,
PA. "Let’s start with clinical evidence, outcomes, risks, in other words,
talk their language. When supply chain departments employ clinicians to
bridge this gap they are much more successful. The key to highest quality at
the lowest cost is to engage clinicians in the decision-making
process. Start with the evidence regarding quality and outcomes to drive
standardized process and then products and then negotiate the price."
Indeed, one of the dangers to value
analysis credibility is an emphasis on one area — finance, according to
Stephen Kinsella, president,
Data Leverage Group LLC, Quincy, MA.
"A true value analysis program takes into
consideration all aspects of a product and/or service choice, [including]
quality and effectiveness, safety and infection control, and yes, financial
impact," Kinsella told Healthcare Purchasing News. "When the scope of a
value analysis program truly considers all of these factors within its
process, then there is a definitive link or bridge between supply chain and
clinicians."
Kinsella further encouraged supply chain to
provide helpful tools necessary for clinicians to manage the process, such
as a product evaluation roadmap and a presenting guide.
"Value analysis represents the intersection
between cost and quality and outcomes, which is where supply chain
professionals and clinicians come together, particularly with respect to
so-called physician preference items," noted Kristin Boehm, M.D., senior
advisor, Nexera Inc., the New York-based healthcare consulting firm within GNYHA Ventures.
"Implementing a value analysis program
allows hospitals to involve all major stakeholders — administration,
physicians, nurses, and supply chain — to work together to identify and meet
spending goals while ensuring that patients receive high-quality care. The
cornerstone of the entire process is transparency — sharing data, outcomes,
and costs with the goal of identifying and utilizing safe and effective
products at the best prices, as determined by empirical results.
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Steve Dillon |
Vendors can assist, too, according to Steve
Dillon, vice president, Surgical Instruments,
Integrated Medical Systems
International Inc. (IMS), Birmingham, AL.
"Value analysis, when properly performed,
provides both clinical and financial accountability," Dillon said. "With the
data tracking software available today, a vendor should be able to provide
the metrics, cost analyses and trend reports that enable all affected
parties to evaluate products and services. Anyone can understand these
metrics, regardless of job description."
S. Scott Watkins, vice president, Supply
Chain Performance, OMSolutions,
Owens & Minor Inc., Mechanicsville, VA,
consulted with his team leaders who concurred unanimously that facilitation
with clinicians makes the difference.
"In today’s healthcare environment,
clinicians want to support their organization’s cost reduction efforts, but
in most cases do not have the visibility to where cost reduction
opportunities exist," he said. "At the same time, supply chain professionals
struggle with engaging clinicians to reduce costs, based upon [group
purchasing organization] compliance and unit price reduction priorities."
Mutual understanding from a shared
experience paves the way.
"Value analysis empowers clinicians and
supply chain professionals to work together to leverage the clinical
knowledge with the access and visibility to accurate data so that informed
decisions can be made," Watkins continued. "Value analysis does not always
mean the lowest price is the best decision. Through this process, clinicians
can become more educated to the true total cost — from total delivered cost
to total utilization cost — and supply chain professionals can learn more
about how supplies are utilized and why particular features are more
important than others in the delivery of care. As a result, barriers that
existed before are bridged through understanding and working together to
accomplish aligned goals."
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Mark Scagliarini |
Mark Scagliarini, senior vice president,
Supply Chain Services,
Yankee Alliance, Andover, MA, suggested that value
analysis serves as the "one forum" linking and enabling supply chain,
administration and clinicians to contribute their individual expertise,
including contracting, business analytics, clinical experience and
leadership. Working in tandem these groups can ensure that "the best product
is purchased with the highest quality at the appropriate cost," he
indicated.
"A well-defined set of team goals will help
align the supply chain professionals and the clinicians," Scagliarini
continued. "It is important for all members of the value analysis team to
understand that lower cost does not have to mean buying the cheapest
products. A value analysis team evaluates products beyond price alone. They
base their decisions on the products’ overall safety and quality as well as
on utilization factors such as waste and appropriate use. This approach
supports achieving a lower overall total cost."
Setting the stage
In a sense, value analysis should provide
the structure for all of these groups to collaborate, according to Barbara
Strain, MA, director, Supply Chain Analytics, University of Virginia Health
System, Charlottesville, VA, and past president, Association of Healthcare
Value Analysis Professionals (AHVAP).
"The role of the value analysis
professional is to provide a cohesive business model by marrying the
clinical and supply chain aspects of healthcare to create a highly
functional, effective organization," Strain noted. "Through well-established
processes, value analysis teams meet to review products and services,
improve resource utilization, assure the safe introduction of devices and
establish metrics to monitor performance. The composition of value analysis
teams is key to building the relationships required for success."
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Steve Tarkington |
Hospital Corporation of America (HCA)
introduced a formal approach to value analysis in early 2000 when it
established Supply Management Action Teams (SMAT) and hired clinicians to
serve as Clinical Resource Directors (CRD), according to Steve Tarkington,
vice president,
Parallon Supply Chain Solutions, Nashville, TN. The purpose
of adding the CRDs was to serve as the bridge between supply chain
professionals and clinicians, he added.
"Clinicians believe, and many still do
believe, that value analysis is all about cost," Tarkington noted. "We
define value analysis as a formal process for evaluating products,
technologies and services that will provide safe, efficient, effective, and
compassionate patient care. It encompasses evidence-based clinical practice,
a multidisciplinary approach and executive leadership support.
"The process looks at what something does,
not what something is," he concluded. "Value analysis is customer-focused,
process-oriented, and outcome-/data-driven."
Tarkington further revealed that HCA is in
the process of adding physicians to its SMAT process for value analysis.
"Integration of physicians within supply
chain is a must-do for all organizations to succeed in today’s environment,"
he emphasized. "We now have hospital data that is publically reported,
potential for a reduction of revenue, due to patient outcome data and
revenues declining, due to reimbursement from government and private
payers."
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Lynne Thomas |
At the same time, perhaps value analysis
needs to be performed the way clinicians think, according to Lynne Thomas,
vice president, Regulatory & Compliance, IMS.
"Clinical professionals are taught that an
informed consent needs to be reviewed by the patient before some types of
medical, diagnostic, or surgical therapy is performed," Thomas
said. "Informed consent is nothing more than the outcome of a value analysis
review from the standpoint of four elements: Risks, benefits, alternatives
and consequences.
"When value analysis team members
independently consider these four elements in a product analysis, they can
consider options as a team without the subjectivity that occurs when options
are discussed solely on the basis of benefits," she continued. "A benefit to
one user may represent a risk to another user, and what is good for the
goose may not be good for the gander. To provide the best results, value
analyses should be performed by both clinical and business people, and the
attributes and detriments of each item should be discussed and ranked from
each reviewer’s individual point of view."
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Nancy Masaschi |
Nancy Masaschi, senior director, Clinical
Resource Management,
MedAssets, Alpharetta, GA, hinted that a new
description or term for value analysis might be in order.
"Value analysis projects optimize a cost
savings impact when addressing clinical utilization and practice variation
with financial cost, and therefore, needs to incorporate the expertise and
knowledge of both the supply chain and clinicians," she noted. "By moving
the focus of value analysis projects to ‘Clinical and Financial Improvement’
projects, a more strategic and collaborative effort between the supply chain
and clinicians to improve the overall performance of the organization will
occur, leading to sustainable results."
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Robert T. Yokl |
While the basic structure of value analysis
"inherently bridges the gap" between supply chain and clinicians, it’s not
enough, contended Robert T. Yokl, Chief Value
Strategist, Strategic Value
Analysis in Healthcare, Skippack, PA.
"Clinicians must lead their hospital,
system or IDN’s value analysis teams, if they are to be successful," Yokl
urged. "This is because they own their supply and purchase service budgets,
therefore they are the only ones that can and must reduce it."
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James Russell |
Richmond, VA-based VCU Health System, for
example, staffs value analysis facilitators to connect the groups. James
Russell, R.N.-BC, MBA, is one of them.
"At the Virginia Commonwealth University
Health System, the value analysis facilitators are registered nurses with
extensive clinical and management experience," Russell noted. "This
background enables them to speak both clinical and administrative languages.
We are often the liaisons that simply translate what one department —
medicine, nursing, etc. — is trying to say to another — purchasing, central
supply, etc. Once the messages are translated, they frequently realize they
have the same goals. Providing the highest quality of care in the most
cost-effective manner are not mutually exclusive goals."
A similar model exists at the Mountain
North Denver Operating Group of a local health system, noted Karla Barber,
R.N., director, Clinical Value Analysis.
"In our system value analysis associates
are required to be registered nurses who can serve as a clinical liaison
between supply chain, facility executive leadership, and the
physicians/clinicians who use the products and technologies at the bedside,"
Barber said. "The value analysis nurse is a resource for maintaining the
balance between optimal clinical outcomes and promotion of excellence in
quality of care with appropriate product utilization, while supporting
fiscal stewardship.
"We are an integral part of the
facility-based senior leadership decision-making body as it relates to
supply decisions, which affect patient outcomes and clinical supply expense
management," she emphasized. "This role requires a unique balance of
clinical insight and data-driven financial savvy." [For a look at Barber’s
process, see sidebar below.] 
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A peek into a value analysis process
Karla Barber, R.N., director,
Clinical Value Analysis, for a group of facilities within a local
health system in the Denver area, shared how her organization
mapped out their value analysis process, highlighting how each
group interacts with another.
Executive leadership interaction:
-
For new
products/technology requests we translate the clinical impact of
requested products and technologies to the executive
(non-clinical) leaders so they are clear about the goal of the
requestor and the impact it is intended to have on our patient
outcomes.
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Secondly, we use
purchase history reports on the current products used to treat the
patients and estimate the financial impact of moving to the new
products being requested. Decision Support takes this information
and incorporates it in a financial report to be shared with
leadership that reflects the percentage of supply cost on the
current contribution margin in the cases impacted by the requested
change.
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Lastly, we strive to
utilize vendors that we have contracted with before going outside
that portfolio to purchase, in order to maximize the potential
savings those agreements provide us, and we always communicate the
contractual compliance impact of the requested item to the
executive team.
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Our goal is to get all
the best data possible into the hands of the decision makers thus
enabling them to make informed decisions.
Physician/clinician interaction:
-
The value analysis
nurse serves as the gatekeepers of all new product/technology
requests for the clinical teams at the sites we cover.
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We spend time with all
new clinical leaders and physicians to familiarize them with our
processes and policies around procurement of new items. Clinical
leaders are more receptive to interactions with an R.N. since we
can speak their language.
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We share all the
clinical research evidence, FDA data, financial impact, and
contract compliance impact of the requested items with the
requestors to make sure that they have all the data needed in
order to make informed requests of their leadership team.
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Our goal here is to
empower the clinicians to make evidence-based decisions on changes
in products the same way we use evidence to determine nursing and
medical care delivery.
Supply chain professional
interaction:
-
As value analysis
nurses we use our clinical knowledge to vet product conversions
and initiatives driven by supply chain to give them the best
possible outcomes while preventing products from hitting the
shelves that will fall short of the needs of the
clinicians/patients or that are misaligned product crosses.
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Value analysis provides centralized
clinical value analysis services and cost containment activities
related to product utilization and standardization for supply
chain by working in collaboration with the director(s) of supply
chain to report to the assistant vice president of
logistics/operations and facility CFO identified supply
reduction/savings opportunities and facility issues on a routine
basis.
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Value analysis is
accountable for communicating upcoming changes, issues and trends
related to clinical supply issues to on-site executive leadership,
nursing leadership and department directors in a timely, clear and
concise manner.
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Serves as liaison to
various system-wide clinical leadership teams to ensure that the
teams achieve their clinical/regulatory compliance/improvement
goals while facilitating fiscal stewardship, contract compliance
and representing supply chain management and system-wide needs.
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