Bridge gap between clinical resource usage and value analysis

Oct. 19, 2016

A recent poll of value analysis professionals conducted by SVAH Solutions showed that two-thirds of the respondents haven’t begun integrating clinical supply utilization management (CSUM) into their value analysis programs. This means these healthcare organizations are not only missing out on significant new savings opportunities, but they are not tracking the lifecycle cost or quality of the products, services and technologies they are buying. The result of this oversight is that these hospitals, systems and integrated delivery networks (IDNs) don’t know if their product, service and technology purchases are costing them more or less than projected or are defect-free over the long-term.

This is one of the critical success elements of value-based purchasing (controlling your cost and quality over the entire patient event) where healthcare organizations’ new payment models are evolving.

Price thinking

The one thing we find that is holding back value analysis professionals from receiving the full savings and quality benefits of CSUM is “Price Thinking.” By this statement I mean that too often the first thought that comes into a value analysis professional’s mind when he or she evaluates a new or existing product is, “What is its cost and can we standardize on this product, service or technology?” instead of thinking, “What is the total lifecycle cost on this new or existing commodity?”

SVAH Solutions studies further show that there is only 1 percent to 2 percent in price savings left for all healthcare organizations. However, if value analysis professionals dig deeper and broader into the utilization of their products, services and technologies there is 7 percent to 15 percent in new savings available to be saved. These numbers are hard to believe by many value analysis professionals, but they are true, accurate and achievable.

CSUM at core

Managing the lifecycle (e.g., beginning, middle and end) cost and quality of a product, service or technology is at the core of the CSUM philosophy. In the new healthcare economy in which we live and work, it isn’t just the value analysis professional’s job to evaluate a product, service or technology at the beginning of its lifecycle, but to measure, monitor and then manage its cost and quality in the middle and then assure that it is cost effectively disposed of at the end of its life. This could mean months or even years of continuous monitoring of these commodities to ensure you have acceptable cost, quality and outcomes. This isn’t something that would be nice to do, it is now mission-critical that you do it because no cost or quality issue will be tolerated in a value-based purchasing world.

Value analysis top job

For years, value analysis’ primary reason for being was cost management, not quality, but this mandate has changed with the advent of the Accountable Care Act. Consequently, value analysis is now also accountable for the quality of products, services and technologies that they are purchasing, since they will cost your hospital, system or IDN time, money and resources if they are defective.

Just as important, your clinical staff has never been more pressed for time, pressured to do more with less, and then take on more responsibilities. This is another benefit of CSUM. It can identify time-consuming, wasteful and inefficient activities that can be eliminated to free up time for your healthcare organization’s clinical staff. For instance, we frequently see nursing staffs over-utilizing (i.e., more changes per shift than medically necessary) on their IV sets, which ends up costing them hours per week that could be spent on other pressing duties. Why not claim these hours back for them?

VA’s time to shine

It’s now time for value analysis professionals to step up to the plate to measure, monitor and then manage all of their healthcare organization’s purchases going forward, not just new product, service or technology requests or GPO contract reviews. Think of a utilization dashboard as an effective tool.

Next, you collaborate with your clinical staff to change the behavior that is causing the utilization misalignments that are identified in your supply chain streams. This is how to integrate CSUM into your value analysis program and bridge the gap that is holding back 7 percent to 15 percent in new savings for your healthcare organization. Remember, there has never been a better time for value analysis professionals to shine. HPN

About the Author

Robert T. Yokl

Robert T. Yokl is President and Chief Value Strategist at SVAH Solutions. He has four decades of experience as a healthcare supply chain manager and consultant, and also is the co-creator of the Clinitrack Value Analysis Software and Utilizer Clinical Utilization Management Dashboard that moves beyond price for even deeper and broader clinical supply utilization savings. Yokl is a member of Bellwether League’s Bellwether Class of 2018. For more information, visit www.svahsolutions.com. Email Yokl at [email protected].