Volume 4/Issue 2
Healthcare
Leading Cost and Quality Strategies for the Healthcare Supply Chain
Magazine
What’s Behind a Mature Supply Chain Organization’s Operational Excellence and Value Enhancement?...Training!
www.ValueAnalysisMagazine.com
Volume 4/Issue 2
Healthcare Value Analysis & Utilization Management Magazine
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Healthcare Value Analysis & Utilization Management Magazine
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contents
Healthcare Value Analysis & Utilization Management Magazine Healthcare Value Analysis & Utilization Management Magazine is published quarterly by Strategic Value Analysis® in Healthcare P.O. Box 939, Skippack, Pa 19474 Phone: 800-220-4274
8 FEATURE ARTICLE By Timothy Hagler
What’s Behind a Mature Supply Chain Organization’s Operational Excellence and Value Enhancement? Training!
FAX: 610-489-1073 bobpres@ValueAnalysisMagazine.com
www.ValueAnalysisMagazine.com ————————————
Editorial Staff Publisher Robert T. Yokl bobpres@ValueAnalysisMagazine.com
14 UTILIZATION ARTICLE By Robert W. Yokl
How to Integrate Utilization into Your Contracting and Price Processes
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Managing Editor Robert W. Yokl ryokl@ValueAnalysisMagazine.com
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Senior Editor
25 CLINICAL VA Article By James Russell, RN-BC
Inspiration, Education, or Sarcasm? 31 THE LAST WORD By Hani Elias
Why Your Previously Successful Value Analysis Team is Now Floundering Volume 4/Issue 2
Patricia A. Yokl ————————————
Editor and Graphic Design Danielle K. Miller Copyright 2016 Strategic Value Analysis® in Healthcare. All rights reserved. Reproduction, translation or usage of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without permission of the copyright owner is unlawful. For permission call, fax, or email Robert W. Yokl, Managing Editor, Phone: 800-220-4271, FAX: 610-489-1073, E-Mail: ryokl@valueanalysismagazine.com for approval to reprint, excerpt or translate articles.
Healthcare Value Analysis & Utilization Management Magazine
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From the Publisher's Desk
Robert T. Yokl
Knowledge is Power if you Enhance Your Supply Chain Expense Data to Produce Meaningful Metrics Robert T. Yokl
Data in and of itself is useless, but if enhanced with clinical, financial and supply chain information to produce meaningful metrics it can become a powerful tool to uncover savings opportunities, quality and safety defects and even predict events in your supply chain streams that you would want to know about. Wouldn’t it be great to see all of your supply chain expense savings opportunities (price, standardization and utilization) all at one time? Wouldn’t it be great if you could pinpoint quality and safety defects in your supply streams before they become acute? Wouldn’t it be great if you could predict which costs (not price) are going up on specific commodities that you have purchased? Yes, all this is possible if you enhance your supply chain expense data to produce meaningful metrics. We like to call this effect supply chain radar; being able to see everything that is going on in your supply streams automatically, scientifically and organically. In my opinion, an even bigger benefit of enhancing your supply chain expense data to produce meaningful metrics is to validate that the savings you are reporting to your management are really hitting your healthcare organization’s bottom line. Or, it now gives you the ability to discover the change you have made is actually costing your hospital, system or IDN more money – not saving it. Unfortunately, it’s been my observation that 18% to 35% of the time savings that are reported just don’t happen and oftentimes actually increases a healthcare organization’s expense category. You don’t want the embarrassing situation I have described to ever happen to you as it did to a supply chain director who was called into his CFOs office to explain why his new wound care contract was costing his health system more money than a prior contract that the supply chain director touted as saving even more money for his system. By the way, this director didn’t have an explanation on why this increase happened until he questioned his nursing staff and found a value mismatch (lower cost products available, but not used) that was causing this utilization misalignment. The lesson here is that this supply chain director wouldn’t have been caught off guard if he was on top of his game with enhanced data and meaningful metrics! Datamining to uncover your next big savings opportunity beyond price is mission critical for every supply chain department. However, this can’t be accomplished without enhancing your data to produce meaningful metrics, since these new savings beyond price are now hidden from your view. More elusive price savings isn’t the answer to this challenge. There are very few, if any, healthcare organizations that aren’t enhancing their data to produce meaningful metrics to reduce their readmissions, cut their lab tests, reduce their length of stay, and improve emergency turnaround time, etc. So why should supply chain be any different? It is now time for supply/value chain managers to heed this call for more organized and scientifically enhanced data to produce meaningful metrics to improve their supply chain operations (labor and non-labor). It’s the supply chain of the future… now sprouting right before your eyes! Volume 4/Issue 2
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Learn More today at www.ValueAnalysisAdvantage.com Volume 4/Issue 1-800-220-4271 2 Healthcare Value Analysis & Utilization Management Magazine 5 or Call or email us at sales@svahsolutions.com
Charting the Right Course for Your Clinical Departmental Supply Utilization Management
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www.ClinicalSupplyUtilization.com or Call 1-800-220-4274 Volume 4/Issue 2
Healthcare Value Analysis & Utilization Management Magazine
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From the Managing Editor’s Desk
Robert W. Yokl
Positioning Yourself for Value Analysis Success Robert W. Yokl
When I first entered the value analysis world 24 years ago, I thought I was at a huge disadvantage by not being a nurse or a clinician. It was a feeling of going to another country and not speaking the language; I did not speak clinical. Mentally, this was very disenchanting but I thought I would get better or learn enough from clinicians on our staff to be serviceable at best. With this mindset there was always a level of angst I felt when I knew I was going into a value analysis meeting or adhoc meeting to discuss clinical aspects of medical/surgical products. In my early days of VA, I came out of value analysis committee meetings feeling discouraged after getting shot down by clinicians or physicians with ambiguous answers like, “We don’t like it,” and many more non-specific answers. The clinician or physician was often able to redirect the value analysis study or challenge the validity of the study altogether which inevitably brought the study to a screeching halt with no results. In my debriefing from these meetings with my father and CEO, Robert T. Yokl, he always told me to keep asking more questions. He said that he learned early on not to accept vague answers like, “We don’t like it,” or, “It doesn’t feel right.” He would encourage me to ask better questions that would result in a solid value analysis conclusion. An answer like, “We don’t like the angle of the grip on the surgical instrument,” is something that a VA Practitioner can work with. I quickly realized that the knowledge and know-how was already inside the hospitals and systems that I was working with. The years of experience was sitting right in front of me in the clinicians that I was working with on the hospital value analysis teams and committees. The aggregate experience on every team far exceeded 150 to 200 years of experience. My goal was to bring out the right answers and conclusions by being able to ask good questions of these clinical and non-clinical professionals. From there on, I became a student of questioning techniques. I learned how to position value analysis and utilization studies with better questioning and amazingly it started working! I was not getting thrown off course or having studies halted/stalled prematurely. Evidence could then be thoroughly discussed and I found that I did not have to worry as much about being a non-clinician as my strengths were in asking good questions of the internal experts, stakeholders, and customers inside and outside (vendors) my hospital clients’ organizations. Over the years, I improved my skills and started to appreciate the “Barbara Walters” interviewing technique as she is the master of questioning and always leaves one wondering how she was able to make celebrities cry - Great Questioning! In this age of searching for better data, better evidence, or better analytics, one of the true areas where we can make exceptional change happen is with asking great questions. It will help you gain insight into all of the products, services, and technologies, as well as how they are procured, inventoried, and utilized. Questioning is one of the less thought about areas in VA, yet one of the most important aspects and tools that won’t cost us a dime but can be worth its weight in gold if you master questioning techniques. Volume 4/Issue 2
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Feature Article What’s Behind a Mature Supply Chain Organization’s Operational Excellence and Value Enhancement? Training! The two keys that unlock an effective and funded training plan and drive a contemporary supply chain. Timothy Hagler
At home in South Carolina we have a saying that is especially poignant when we see one of our good friends hanging out with their old hunting dogs. We say “’tarnt a new trick ‘atwixt ‘em.” While the truism that old dogs aren’t very quick at learning new tricks is fun to say, it is in actuality the planned organizational maturity of the supply chain department that in itself (when competently observed and modeled) unlocks powerful planning and funding steps to enable our most effective ongoing learning potential.
The Two Keys: The first key is to equip ourselves with an approach to illustrate and communicate how a specific training plan will support the maturity and strategic differentiation of the organization. Such an approach is the level-layered training plan matrix. Communication difficulties can be mitigated as the training plan can be deconstructed by identifying how individual training needs aggregate to meet a skill gap analysis relative to your team’s needs Volume 4/Issue 2
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Feature Article
Timothy Hagler
along an agreed-to supply chain maturity model. Individual organizational tiers (leadership, individual high contributors, and line staff) will represent specific business functions that will require discrete educational solutions. See the example below of a level-layered training plan matrix.
Your compelling modeling and profiling of the various levels of supply chain organizational maturity will be the foundation from which your Level-Layered Training Plan will develop (in this example the organization has charted a path to a patient-centered, networked value creation model). With the organizational profile in hand you have a guide to conduct a skills gap assessment. That asVolume 4/Issue 2
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Feature Article
Timothy Hagler
sessment will in turn drive a training plan for leadership, individual contributors, and line staff levels of the supply chain organization. The second key is funding your training plan. There are two approaches to funding job and skills training, operating budget, and creative third-party funding. Budget Funding: Making a successful appeal for operating budget funding is the simplest method to accrue for, track payback, and administer. As the organization matures, so does the capacity and opportunity for incremental value generation. It will enhance your chances for a long-range funding approval to show that the contribution from organizational design is accumulatively incremental while training plan net expenses are statically additive. In the example, we see that ROI can be estimated to satisfy the hurdle rate in the first 90–180 days from initial training. Even with such substantial payback as demonstrated in our example, there is still something to be said for timing. Environments of intensive cost cutting, times when organizational focus is taken up with emergent issues, or when under the microscope of specific performance improvement initiatives may not be wise times to ask for an advanced training budget approval. Creative funding sources: There are multiple avenues for funding training through grants, peerto-peer training exchanges, payment plans, crowd funding, scholarships, as well as blended and braided funding sources. These may be fully funded opportunities, or may require a partial investment from operating funds. Peer-to-peer training exchanges: There are likely network peer organizations that have a specific strength paired with a need to build up a skill that your team possesses. These organizations can be approached for cohort learning. As an example: If you have identified a skills gap in product knowledge, your cohort may possess a specialized item-level familiarity that they would trade their hosting of a training event for an in-service on effective exchange cart inventory management. Trading partner support training: When conducting best and final negotiations for products, equipment, and services, you have an opportunity to negotiate related training as/like their in-house teams receive. That can be first-call or board replacement training for a piece of medical equipment, or advanced super-user level training for software applications. Almost any live trading partner Volume 4/Issue 2
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Feature Article
Timothy Hagler
negotiation can include a training component. Savvy negotiators will look for relevance and elements of mutual benefit. Payment plans: At times just extruding the cash flow can be helpful, and can be a slight financial advantage considering some available terms of Procurement Card programs with aggressive rebate structures; there can actually be other advantages beyond getting to “yes.” Scholarships: Trade associations, GPOs, and application user groups often offer scholarships to national and regional events. While these aren’t guaranteed, they can be an effective means to stretch the training budget when available. Grants: It is compelling to think of simply getting someone else to foot the bill for training, but grants come with a great deal of upfront and ongoing administrative accountabilities, and some grants simply have strings attached. Obtaining training grants can be a complex process, but worthwhile pursuing. Key points to keep in mind:
The opportunities are real and are offered through granting authorities you can trust. Before applying for a grant, always check your eligibility and carefully consider your ability to meet grant requirements. To increase your chances for success, follow application instructions to the letter and prepare a thoughtful, thorough response. Grant-making agencies want you to succeed! So get whatever help you need to navigate the process, including all information from their web site, or individual conversations with their officers or past grant awardees. Visit www.careeronestop.org for guidance on job training grants from multiple state and federal agencies.
Blending and Braiding: Blending of funding sources occurs when you create a general education and training pool and multiple sources contribute to the pool and the resources are distributed as they are requested. Braiding is when a funding strategy taps into existing allocation streams and uses them to support unified initiatives as a flexible and integrated approach. Braided funding differs from blended funding in that in braiding the funding streams remain visible. Both blending and braiding are effective when there exists a high degree of collaboration and even pride of sponsorship amongst funding agencies. An example would be setting up a collection and re-distribution depot to provide surplus medical supplies to third-world countries as a laboratory to train staff on the effective elements of reverse supply chain. Volume 4/Issue 2
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Feature Article
Timothy Hagler
This effort may bring together peer-to-peer training, trading partners, community philanthropic organizations, federal grant sources, as well as established non-profit redistribution organizations. Collaborative braided funding strategies also lead to the viability of crowdfunding as these programs often have appeal for community benefactors. Collaboratively all involved can take a great deal of pride in what develops in the nexus of all these specific interests. The mind map (left) is a vivid description of connected issues to a training plan and funding strategy as presented. I hope this article has helped you think through using the rigorous framework of an organizational maturity model as a base and helpful guiding matrix to provide luminance to a skills gap analysis and ultimately applying a training schedule that will drive significant incremental returns. If you have the capacity for program administration beyond tracking to journal entries in an operating budget, some of these creative funding ideas may be in your future as well, but whenever possible, budget funding, while requiring an element of salesmanship, will keep the process more focused on the core calling of healthcare delivery network supply chain…“filling the hands that heal.”
Timothy Hagler is an experienced supply chain leader, with an ever-accelerating interest in earnestly connecting stakeholders with creative ideas to meet new economic realities for healthcare providers. Tim has enjoyed an excellent track record of achievement and advancement earned through demonstrated contribution to bottom-line results, employing strong solutions architecture, analytic and financial skills in challenging, multi-client environments. Tim and his lovely wife Kandy enjoy spending time at the beach in South Carolina. Tim’s hobbies include photography, American folk music, and writing about himself in the third person. Read more of Tim’s articles on his blog at www.thinkoutsideinsupplychain.com. Volume 4/Issue 2
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AHVAP 13th Annual Education Conference & Supplier Showcase
Healthcare Value Analysis: Patient Centric and Outcome Driven The 13th Annual Education Conference & Supplier Showcase offers an outstanding program of continuing education, and a great opportunity for Value Analysis professionals to network and exchange ideas.
Included in this Year’s Program
New Member and New Attendee Reception Wall of Experience Supplier Showcase Stay in touch at the conference with our smart phone app. Contract strategy sessions , how surgeons impact supply decisions, effective communication across all generations and how hospitals’ care delivery teams are adapting to the Affordable Care Act. Nationally renown speaker, David Jon Bowman, will help shape you into a team leader. Back by popular demand, nurse humorist, Terry Foster. Questions to help you NAVIGATE decisions when confronted with poor evidence plus developing your own internal evidence based system. Understand the relationships between supplier and Supply Chain. Learn how Value Analysis professionals can appeal to physicians’ shifting priorities about value. Curtail rogue purchasing and off contract spend with a centralized Value Analysis process
Register or Learn More Today Volume 4/Issue 2
13 WWW.AHVAP.ORG
Healthcare Value Analysis & Utilization Management Magazine
Utilization Management
Robert W. Yokl
How to Integrate Utilization into Your Contracting and Price Processes Robert W. Yokl, Sr. Vice President/COO, SVAH Solutions
What if you knew that your overall supply utilization (total cost per operating metric) was at best practice levels for the commodity and/or product group you are about to enter into contract negotiations on. Would this change your mindset on how you go about negotiating the terms of this contract? Of course it would. You might only want to make minor changes to the contract now and would also want to hold or improve the price. In essence, you can take a conservative tact on the contract because you know you are already winning the game. The opposite effect occurs if you know that you’re running very high above industry and historical best practice levels for a commodity or product group on total cost of utilization. You would then be obliged to be more aggressive with your contract efforts because you would try to right your ship as much as possible on the pricing and contract terms front.
Contract Intelligence is No Longer About Spend but Total Cost Per Operating Metric or Utilization Today, we typically work with the total spend amount that we may or may not think is a high number (Continued on page 16)
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“Time is Running Out” Time to Take the Should-I-Sign-Up-OrShould-I-Pass Test! Your supply savings budget is locked in place for this fiscal year, but your supply savings haven’t appeared yet. Maybe this isn’t of concern to you...so this offer isn’t going to make a difference. However, maybe it does matter. We’ve prepared this simple test to see if you are ready to move to the next level of savings performance — Just circle YES or NO. 1. You're COMPLETELY satisfied with the savings you have been generating now.
YES
NO
2. Your savings yield on each and every project couldn’t be better.
YES
NO
3. Every group purchasing contract is working like gangbusters to save money.
YES
NO
4. Your contract compliance rate is close to 100%.
YES
NO
5. You know that you have the latest, cost-cutting software to save money.
YES
NO
6. You face ZERO pressure to reduce budget expenses beyond 1% to 2% annually. YES
NO
7. Everyone in your organization accepts your cost proposals, without question.
YES
NO
8. Your department heads and managers don’t need evidence to change.
YES
NO
9. Time is on your side when it comes to making your expense budget for FY 16.
YES
NO
10. Your value analysis teams are generating all the savings that you need this FY 16. YES NO
RESULTS: If you see a bunch of NOs circled, it’s clear that you NEED to sign up for a no-cost, no-obligation “test drive” of Utilizer® Dashboard to ensure that you can make your expense budget each and every year! Call or Email Strategic Value Analysis in Healthcare Today for a FREE Test Drive!
800-220-4274 orHealthcare Visit Value www.Utilizer-Dashboard.com Analysis & Utilization Management Magazine
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Utilization Management
Robert W. Yokl
but we generally enter into a save-as-much-as-we-can mindset on every single contract. This is an inefficient use of your resources and time when not every contract will bear the fruit that you are looking for. Inevitably, you will waste valuable time and resources due to not knowing the total cost of utilization levels. Healthcare organizations have been dealing this way for decades in supply chain, but the time has come to take the alternative view and start to embrace utilization as a viable contract negotiation tool to gain even more in price negotiations.
To Win the Contracting Game You Need Better Contract Intelligence With value-based purchasing starting to take effect, we need to make sure that we gain even more advantage in our price negotiation, standardization, and value analysis reviews than ever before. However, there is a fourth dimension that we have been lacking in and that is utilization management. Utilization management allows you to view the “total cost by operating metric” of any given product, commodity, or product groups. With this in hand you know whether you are excellent, good, fair, or poor in any given category and can negotiate accordingly. As they say, knowledge is power, and this is a new power that Contract Administrators and Directors of Supply Chain need to have in hand for every contract negotiation.
Start Integrating Utilization into Your Existing Contract Processes Now On a recent utilization review with a key client hospital contact who was having a contract renegotiation, I suggested that they incorporate an annual utilization review to be performed by the vendor’s nurse practitioner team to ensure that the hospital is on point with their utilization. Luckily, they knew where they stood on utilization and were close to being “good,” but they wanted to be at best practice levels. They thought they had done all they could do with price negotiations, and were 97% standardized to this company on their clinical use of the products. Volume 4/Issue 2
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Utilization Management
Robert W. Yokl
Are Costs High Because of Price or Utilization? One of the most frequent questions I am asked by our customers when we show a utilization (total cost of consumption by operating metric) savings is, “Is it price or utilization/consumption that should be our goal?� A good example of this is a large IDN who was running over on cost per adjusted patient day (utilization) for exam gloves and had just gone through a full year of standardizing to the manufacturer on which they had negotiated an outstanding contract. The problem was that they had chosen a higherend glove and had extended the standardization further into standardizing into the product line as well. We pointed out that they had standardized to the high-end clinical glove when only 65% of the gloves utilized were actually used by clinicians; the other 35% could have selected utilized a lower cost alternative glove for use at 25% to 35% less cost.
Utilization is a Powerful Tool to Have in Your Contract Intelligence Arsenal I could go on and on about the powerful use of utilization management in the contracting process, and more importantly the before, during, and after effect that utilization has for contract professionals. Though it may seem foreign to start to look at all these elements, it will quickly become second nature to you and your colleagues because it will give you a major advantage when you look across the table in negotiations. Plus, you may find that you will be more successful in saving with this new added element since you will now be coming from a total cost standpoint instead of just spend. Start to plan how to take advantage of utilization management as soon as possible.
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In our 29th Year Serving the Healthcare Industry
Volume 4/Issue 2 for a Walk-Through! Healthcare Value Analysis &or Utilization Magazine 18 Call or Email SVAH 800-220-4274 Visit Management www.Utilizer-Dashboard.com
Value Analysis 101
Robert T. Yokl
The Value Analysis Job Plan You Need to Have a Defined, Repeatable, and Audible System Robert T. Yokl, President/CEO, SVAH Solutions
One of the missing elements in most healthcare organizations’ value analysis methodologies is a value analysis job plan, or as Larry Miles, the father of value analysis, says, “A system for use when better than normal results are needed.” This would be the system that each of your value analysis project managers would follow religiously when evaluating, justifying, or investigating any new or existing product, service, or technology. This one thing (a system) could make the difference between a good vs. a great value analysis program at your hospital, system, or IDN. Don’t overlook or disregard this powerful idea!
Why Do We Need a Job Plan or System in Value Analysis? In short, to prevent your value analysis project managers from “winging it,” you need to have a defined, repeatable, and audible system to guide your VA project managers through their value analysis studies. Remember, if you don’t have a value analysis system, your VA project managers will devise their own VA systems which are typically poorly designed and missing the core elements of a scientific study. Here are the key elements of a job plan/system that you need to emulate for a great value analysis program:
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Value Analysis 101
Robert T. Yokl
Defined Clearly describe system or process to be followed. By defined, we mean that you have a distinct process with a number of steps (1,2,3...) that your value analysis project managers are to follow on each and every value analysis project they accept.
Repeatable Can be repeated again and again without fail. Each of your value analysis studies need to be conducted in the same manner so that you can have consistent, reliable, and uniform VA studies.
Auditable Able to examine system or process for conformity. If your VA studies are defined and repeatable, they can then be audited for conformity, compliance, and additional savings opportunities.
These three attributes are the building blocks for a scientific value analysis process that will upgrade the consistency, reliability, and quality of your value analysis studies almost overnight.
Classic Value Analysis Job Plan/System to Model
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Value Analysis 101
Robert T. Yokl
The classic value analysis job plan/system espoused by Larry Miles can have a number of phases from the beginning to the end of your VA study. Review the typical five-step job plan/system for a successful value analysis study every time.
Within each phase you would have a number of sub steps to follow to complete each phase and link one to the another. For instance, the Information Phase consists of four sub steps: collect data, define the scope of the project, determine evaluation factions, and determine sub team composition. For a complete guidebook on the value analysis job plan/system I would recommend Value Methodology: A Pocket Guide to Reduce and Improve Value Through Function Analysis @ GOALQPC.com.
Value Analysis is More Than a System; It’s a Money-Saving Machine Value analysis has a 67-year history of saving money and improving quality at some of the largest organizations (General Electric, Whirlpool, Ingersoll-Rand, etc.) in the world. It is a systematic process used by multidisciplinary teams that healthcare organizations use to value justify what they are purchasing from their vendors and GPOs. However, VA can be more than just a system. It can be a money-saving machine if healthcare organizations would employ it to redesign and reinvent the products, services, and technologies they are buying now. So don’t limit the uses of value analysis; expand on its uses (i.e., new and existing products, services, technologies, and processes) so you can benefit from its many opportunities to save money and improve your healthcare organization’s quality.
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Clinical Value Analysis Inspiration, Education, or Sarcasm? James Russell, RN-BC, Value Analysis Facilitator, UF Health at Jacksonville
Most of us have interesting little quotes attached to our Outlook (or Lotus) auto-signatures. These can be spiritual in nature, thought provoking, or even a little sarcastic. I like the snarky ones the best. I also like those that weave some kind of message that relates to what the sender does for a living, so I look for ones that evoke a little emphasis on value analysis. I used to use this one: “Fast is fine but accuracy is everything." - Wyatt Earp. The point of this little anecdote was to remind whomever I was corresponding with that my profession of value analysis is based in logic, not emotion. Thoughtful contemplation of pros and cons, not Tourette’s Syndrome. When we make decisions, we use evidence and give attentive consideration to alternatives. Knee-jerk reactions are usually regretted and often cause more workarounds than was intended. As I frequently preach to my more emotional colleagues, I work with Math not English. Your opinion is nice to know, but we don’t base our decisions on opinions. We want data, randomized-controlled trials, published evidence, P-values…Math. I’ve thought about changing my quote to: “There are 3 kinds of people, those who get Math and those who don’t.” Volume 4/Issue 2
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Clinical Value Analysis
James Russell
I wonder how many folks would get the joke? Anyway, that’s probably not work-related enough. My intention with the Wyatt Earp quote was probably missed by most folks and people just thought it was strange that I quoted a gunfighter when sending them an e-mail about collaboration. Collaboration is what I really enjoy. As a result of age, experience, or luck, I’ve become much less interested in getting credit for success and take great pride in watching a new nurse come up with an idea to solve a problem or a paramedic design a new workflow to alter supply utilization. Positive change doesn’t have to be driven by me and is actually more effective if I’m supporting ideas generated by others, like our value analysis teams, than if I’m tooting my own horn. As a result, I’ve become more interested in reinforcing the collaboration and teamwork concept. So it was time to change my autosignature. I thought about: “None of us is as smart as all of us.” It’s good and partly conveys what I was after. I’m not sure where it actually started, but if you believe Google (and who doesn’t?) it was either Kenneth Blanchard or a Japanese proverb. My money’s on the Japanese. Anyway, it wasn’t quite enough. More than just collaboration, I wanted to inject the idea that true collaboration isn’t about brainstorming. Brainstorming is where everyone tosses out ideas as they pop into their heads. Someone writes these ideas on a whiteboard or yellow stickies and then it all gets sorted out later. Nice idea, but most folks don’t realize it’s actually pretty exclusionary. Brainstorming is for extroverts. They are naturals at it. Ask them to blurt out whatever pops into their heads and they’ll respond, “I always do that.” We know. Introverts don’t do that. They actually use that filter between their brains and their mouths, sometimes to their own detriment. Introverts think before speaking. Sometimes they’ll ruminate on a topic for a considerable length of time before tossing it out to the group. If brainstorming is your technique for idea generation, you’re missing input from about half of your audience. To avoid this extrovert domination, I try to: “Remember to grease the non-squeaky wheels.” I like how that sounds, but it makes for a weird auto-signature. I want to truly be inclusive and give the quieter folks a voice. I also want them to enjoy the value analysis process. Extroverts can be energized by chaotic brainstorming sessions where everyone is talking at once. Introverts are exhausted by them. How about: Volume 4/Issue 2
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Clinical Value Analysis
James Russell
“The early bird gets the worm, but the second mouse gets the cheese.” Maybe that’s a bit too graphic. It conveys my desire to support methodical decision-making, rather than video game twitchiness, but I’d probably regret having that go to my CEO. Then again, there’s Franklin D. Roosevelt: “I think we consider too much the good luck of the early bird and not enough the bad luck of the early worm.” Again, probably too much and too abstract. I realized that I was really after a signal to the more aggressive folks that they should pay attention to the quieter folks before making decisions. The point I wanted to convey is that value analysis is not just about people fighting for their place in line, jockeying for position to be the next on the agenda. It’s also not about putting out fires. I have a sign in my office: “There are no value analysis emergencies. If you need my help immediately, you’ve probably planned poorly.” While I like that enough to hang in my office, I probably shouldn’t have it on all of my correspondences. Sometimes it takes a bit of explanation. I wanted our value analysis program, and my autosignature by extension, to convey a sense of inclusiveness and an eclectic breadth of ideas and opinions. In order to do that, I have to make sure we aren’t alienating the softer members of our committees. I used to say to an old boss: “If you say red and I say blue, then you raise your voice and say RED! That won’t make you right, it just makes you loud.” While this was fun, kind of like poking a bear to watch him growl, and it was accurate because he was an extreme extrovert, it’s not a great tag line for my emails either. It sounds too defensive. (Although I like the attitude it conveys.) I’ve also always liked Stephen R. Covey’s take on the prayer of Saint Francis of Assisi: “Seek first to understand, then to be understood.”
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Clinical Value Analysis
James Russell
It kind of tells people to shut up and listen, but very nicely. However, I wanted to avoid religious quotes. Additionally, I wanted to foster the idea of having different opinions, being the devil’s advocate, thinking out of the box, etc. I wanted folks to know it’s okay to disagree and not go along with the herd. Here’s a great quote by General George Patton: “If everyone is thinking alike, someone isn’t thinking.” It almost works, but I don’t want to encourage dissension, just true collaboration. I want to impart that value analysis is comprehensive and welcoming of different thoughts, but once a decision is made we’re a united front. We can’t have a committee decide to convert to new IV catheters and have members go back to their areas saying, “I didn’t want these new things and you’re going to hate them, but those value analysis people say we have to convert because the new ones are cheaper.” That kind of sabotage is poisonous to a process and I want folks to take some responsibility for being leaders (no matter what their role in the organization). We can (politely) argue, fuss, and fight in the committee…but when we collectively make a decision, we all stand behind it. If we can’t agree to do that, we disband the committee as it will be a waste of time and could do more harm than good. If it turns out to be the wrong decision, we own up to it collectively, without anyone saying, “I told you this wouldn’t work,” and we move on. That’s what professional leaders do. Leadership…huh. Essential to leadership is communication. If I get back on my introverted high-horse, communication isn’t just about talking, it’s about using your ears at least as much as your mouth. So here’s what I settled on; it’s not a quote, I made it up myself. “When asked about their communication skills, most leaders will say, “Of course! I’m great at explaining things and getting my point across.” Unfortunately, that wasn’t the question. At least half of skilled communication is practiced listening. Waiting for your turn to talk isn’t the same thing.” It’s way too wordy and a bit snarky, but no one’s been offended yet. I’ll probably change it again soon because of its length. But, it’s better than my fallback: “I can explain it to you, but I can’t understand it for you.” Volume 4/Issue 2
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Clinical Value Analysis
James Russell I know, that’s better for Facebook than a prof essional e -mail correspondence. I still like it.
Is all of this too much to expect from a quote attached to an autosignature? I decided to share my decisionmaking process with one of my more extroverted colleagues to see if I’d accomplished what I’d set out to do. She said, “What are you talking about?” I explained that it’s that little quote you sometimes see at the end of people’s emails, after their contact information. They use it to convey a message they feel is important. She said, “Oh, I never read those things. I have too much work to do.” Sigh.
Jim Russell is a Value Analysis Facilitator UF Health at Jacksonville and has more than 25 years of nursing experience, specializing in critical care and psychiatry. He has been a Staff Nurse, Charge Nurse, Clinical Coordinator, Nurse Manager, Director, and Chief Nursing Officer. He worked for many years in the for-profit community healthcare sector and also has several Academic Medical Centers on his resume. Jim sat for 5 years on the Nursing Advisory Board for a HealthTrust, performing Value Analysis for nursing related products and represented more than 70 hospitals. He is currently on several Advisory Councils and Special Interest Groups for UHC and Novation. When not at work, he can be found rolling around with his hyperactive rescue Husky. You can contact Russell with your questions or comments at James.Russell@jax.ufl.edu
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The Last Word Why Your Previously Successful Value Analysis Team is Now Floundering Hani Elias, JD, MPH, CEO and Co-Founder of Procured Health
2016 has been a challenging year for value analysis leaders as they face the reality that value-based care is here. And more importantly, that this new healthcare paradigm doesn’t just require minor adjustments to the way things have always been done. It requires an entirely new way of thinking and operating. It requires a willingness to relinquish the safety of the status-quo for an uncertain future - because there is far too much at stake not to. To prosper in healthcare today, providers must evolve to a more comprehensive, strategic, system-wide plan for clinical spend management that incorporates costs, quality, and outcomes. In this new world, the value analysis teams that will be most effective are those that make a deliberate effort to retool in order to thrive. What’s even more difficult is that many factors that previously contributed to the team’s success have now become shortcomings. In our analysis of over 300 hospitals, we’ve identified 3 characteristics of value analysis teams that once served them well but are now impeding their progress and results. (Continued on page 33) Volume 4/Issue 2
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Value Analysis Professional Certification is Here! As Healthcare Value Analysis becomes more integral to healthcare’s financial viability, the need for a credentialed industry standard is greater than ever before
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The Last Word
Hani Elias
1. Your team is narrowly focused: While traditional value analysis teams have been productfocused, or even focused on just new technologies, that approach has long out-lived its usefulness. It’s simply not sustainable to be product-focused because it fails to tackle the most significant opportunities to reduce wasteful spending and improve efficiency. The overarching mandate should be broadly defined around value; specifically, ensuring that medicine is practiced to deliver the best outcomes at the lowest cost. The emphasis should be on being a strategic resource for physicians, who care about far more than just products. Moving beyond product selection to address larger issues like poor utilization and high clinical variation must become a priority, even though these competencies are outside of the traditional value analysis comfort zone. Further, decisions made in a vacuum about products don’t support the development of evidence-based guidelines and care pathways. Similarly, decisions made about products alone don’t allow for conversations with physicians about important trade-offs. For example, deciding that a new product isn’t necessary may allow the hospital to add another resource in the OR that can improve throughput. 2. Your team is comprised of value analysis PRO’s: The truth is that the shift to value also demands a shift to the value analysis team. Your current team of value analysis experts may be ill-equipped to navigate this transformation, not because they’re not good at the jobs they were hired to do, but rather because those jobs are evolving and will soon bear little resemblance to what they once were. Executing on a more advanced strategy requires teams to think differently. So, in many cases, “industry expertise” brings its own set of problems – like the inability to stray from standard operating procedures. “Outsiders,” without healthcare experience, can be incredibly valuable additions to the team because they have a fresh perspective that allows them to ask smart questions and offer creative solutions to ongoing problems. We’ve seen firsthand that some of the most high-performing value analysis team members can be former project managers, consultants, and even medical device representatives. Staff with these backgrounds excel because of their expert analytical skills, solutions -oriented approach, attention to detail, and their tendency not to take no for an answer.
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The Last Word
Hani Elias
3. Your team is process-driven: Tasks that were once top priority, like processing new product requests, aren’t serving the industry-wide call to action to improve costs, quality, and outcomes. Many value analysis teams that consider themselves “advanced” today are stuck in this comfort zone and are too focused on just quick turnarounds. Even more troubling is that we often see that while they do measure turnaround time, they don’t measure much else. Smart value analysis teams must shift from being process-driven to metrics-driven - because making an impact is much better when you can measure it. Tracking KPIs like cost avoidance, savings achieved, and new product approval rate helps teams not only to monitor progress towards clinical, financial, and operational targets, but also to improve efficiency and promote accountability. Teams must also dedicate more time and effort to auditing actual vs. expected clinical and financial benefit. We recommend that teams review progress and results at least quarterly, if not monthly, and secure a standing slot on the executive team agenda. The big idea is that the impact of a strong value analysis team goes far beyond managing new product requests. What’s most exciting is that the chance to make a difference and deliver better healthcare is right in front of us. All we have to do is step up.
Hani Elias is the CEO and co-founder of Procured Health. Prior to starting Procured, he was a consultant in McKinsey & Company's healthcare practice and a founding fellow of the firm's healthcare economics think tank, the Center for US Health System Reform. He has spoken on clinical spend management at many industry conferences, including AHRMM and the MedAssets healthcare business summit. He is a three-time graduate of Harvard University, earning his bachelors degree, masters in public health, and law degree from the school. Visit Procured Health at www.procuredhealth.com/knowledge.
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Finally, A Proven System That Engages Clinical Department Leaders to Save Money in Supply Utilization Why Do Clinical Departments Need Only Clinical Departments Can More Proof Than Just Total Spend? Control Their Clinical Departmental Supply Utilization Supply and Value Analysis Managers have been challenged with providing evidence to show where clinical departments’ supply utilization is running over. Normally, when the utilization overrun is brought to the clinical department managers’ attention in the form of spend totals, their first reaction is that patient volumes or acuity was high for the period. That is where the conversation usually ends and that is where huge dollars are tied up in your hospital’s supply chain. How do we provide the proof clinical departments need when it comes to supply utilization?
Clinical Departments Are Not Cost Management Averse Clinical departments are not cost management averse. On the contrary, they will help manage utilization costs but require solid evidence when it comes to their major and minor product category overspends. Supply and Value Analysis Managers have been able to keep costs low for many years with various value analysis and contracting strategies but there comes a time when the clinical departments must learn where they need to do better.
Clinical departments have traditionally managed the supplies that are used for care on their patients but they have been doing this without a solid reporting system to tell them where they can do better based on patient volumes and acuity. With a system in place, clinical departments can now visualize all of their major supply categories and make the necessary adjustments which in turn will save big dollars (11% to 23% supply utilization savings per clinical department) for the hospital.
$3.8 Million for 350-Bed Hospital Recently, a 350-bed hospital reported clinical departmental savings of over $3.8 million. Why so much savings? Because they had never taken the utilization reporting to the departmental level and thus the savings were low-hanging fruit when it was brought to the clinical department leaders’ attention. Clinical Department Utilization Manager software made it easy to pinpoint the exact category in the exact nursing unit and the exact product(s) that were causing the overspend. Prior to this, they did not have any idea where to look or how to prove the savings to the clinical department leaders.
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