It’s time to clinically integrate supply chain into healthcare reform

Clinical integration is defined by the American Medical Association (AMA) as “the means to facilitate the coordination of patient care across conditions, providers, setting and time in order to achieve care that is safe, timely, effective, efficient, equitable and patient-focused.”

The AMA goes on to describe that the Affordable Care Act (ACA) of 2011 includes provisions to promote clinical integration. That means hospitals and healthcare organizations are expected to participate in the efforts to improve clinical integration — or the coordination of care across settings — and to expand coverage, boost the effectiveness and efficiency of care, promote innovation and control costs.

AHRMM’s Cost, Quality and Outcomes (CQO) movement was inspired by the ACA and has become a driving force in healthcare supply chain management to clinically integrate supply chain and to actively participate in achieving clinical as well as financial objectives. To meet federal quality mandates, hospitals and healthcare providers must begin to focus strategically on the patient outcomes associated with health technologies — the products, devices, services and interventions we use to deliver care to patients.

There is no argument that traditional value analysis approaches, such as contracting and standardization strategies, have eliminated much misuse and wasteful consumption especially in the area of physician preference items. The missing link in these efforts, however, has been scientific evidence of patient outcomes and safety as related to the variation in practice and the use of products. The incorporation of such information along with the traditional value analysis approach to standardize products and associated cost reductions efforts begin to define clinical integration of supply chain management.

Traditional value analysis programs use contracting and standardization strategies to reduce utilization costs by finding ways to limit the variety of products used for the same clinical application and eliminate wasteful and inefficient consumption or misuse. An evidenced-based value analysis process incorporates a clinically driven process to evaluate health technologies based on clinical effectiveness, patient safety, operational impact and costs. Clinical trial data, patient registry data, and other forms of clinical evidence are the foundation of a clinically integrated supply chain approach, which could be defined as a standardized process that uses evidence-based, clinically sound, and financially responsible data to drive decisions.

Unfortunately, good evidence is not always available — especially for new and emerging health technologies. Nevertheless, hospitals and healthcare systems continue to adopt new products, services and interventions even when evidence is lacking. This occurs for several reasons. Physicians might have a preference for certain products, or patients may be inquiring about popular marketed products. In the business of healthcare, catering to the wants of physicians or patients in the absence of supporting clinical evidence runs counter to the efforts set forth by the ACA and needs to cease.

The objective of a clinically integrated supply chain should be based on clinical quality and safety as the foundation for any purchasing decisions.

From a clinical perspective we would seek to:

• Ensure the adoption of safe and effective medical technologies that will result in improved patient outcomes.
• Establish an evidence-based approach to technology acquisition and utilization.
• Facilitate the reduced variation of products, elimination of waste and work to align and standardize products and technologies with the standards established for clinical practice.

From a financial perspective we would seek to:

• Evaluate the financial impact and cost effectiveness of new health technologies.
• Prior to purchase determine reimbursement and total cost of use.
• Encourage clinicians to reduce costs through standardization of procedures and products.
• Explore utilization management opportunities to reduce overall consumption and reduce waste.

Clinical integration differs from traditional value analysis in that it incorporates greater clinical and executive involvement to promote a consistent approach and organization-wide change. Shifting the traditional value analysis approach away from a supply chain-driven initiative to the incorporation of supply chain in current and ongoing institution-wide clinical integration is key to overall success. Clinical integration is a top-down approach. Striving to include supply chain in these efforts is what will shift paradigms. Creating a formal evidence-based approach to value analysis will strengthen the position of supply chain by providing greater transparency and drive purchasing decisions that are not physician preference, patient demand, market competitive or based upon price/cost.

To implement an evidence-based and clinically integrated approach to supply chain management the following key elements should be considered:

• Keep clinical quality at the forefront of the process. Price should be only one factor in any purchasing decision. Clinical quality and safety should be the foundation for these decisions and the most important consideration.
• Recognize that from a clinical perspective clinical evidence is compelling. As scientists, physicians recognize the value of evidence. Where they can be resistant to contracting and standardization strategies, they will listen to evidence.
• Embed supply chain in broader clinical integration practices. Incorporate supply chain in ongoing clinical practice committees. Shift the paradigm from a supply chain-driven committee to an evidence-based value analysis approach where supply chain serves as subject matter experts.

The evolution of supply chain management must embrace clinical integration. To achieve this goal, we must incorporate unbiased evidence of effectiveness and safety along with both clinical and financial operational impact analysis. As a result, the purchasing of products and services becomes a fact-based, objective process that aligns clinical objectives with fiscal realities.