Healthcare Value Analysis & Utilization Management Magazine - Volume 5 Issue 3 by valueanalysismag

Healthcare

Volume 5/Issue 3

Magazine

Featured Article:

That Which We Call Evidence

Leading Cost and Quality Strategies for the Healthcare Supply Chain

www.ValueAnalysisMagazine.com

Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

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Volume 5/Issue 3

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Healthcare Value Analysis & Utilization Management Magazine

Contents

Healthcare Value Analysis & Utilization Management Magazine

4 FROM THE PUBLISHER’S DESK By Robert T. Yokl

Evidence Can Be Found from Many Sources with a High or Low Degree of Reliability. Are You Employing the Right Sources?

Healthcare Value Analysis & Utilization Management Magazine is published quarterly by SVAH Solutions® P.O. Box 939, Skippack, Pa 19474 Phone: 800-220-4274 FAX: 610-489-1073

6 FROM THE MANAGING EDITOR’S DESK

bobpres@ValueAnalysisMagazine.com

By Robert W. Yokl

www.ValueAnalysisMagazine.com

Sometimes the Easiest Way is the Simplest

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Editorial Staff

9 FEATURE ARTICLE

Publisher

By James Russell

Robert T. Yokl

That Which We Call Evidence

bobpres@ValueAnalysisMagazine.com

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16 UTILIZATION ARTICLE

Managing Editor

By Robert W. Yokl

It Wasn’t Raining When Noah Built His Ark

Robert W. Yokl ryokl@ValueAnalysisMagazine.com

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20 VALUE ANALYSIS 101

Senior Editor

By Robert T. Yokl

Where Does Evidence Fit Into Your Value Analysis Process?

Patricia A. Yokl ————————————

26 VA Team Dynamics

Editor and Graphic Design

By Laura L. Polson

Clinical Value Analysis: Increasing Your Team Speed!

30 Value Analysis Leadership Interview Hani Elias and Gina Thomas

37 THE LAST WORD By Robert T. Yokl

Moving Beyond Standardization and Best Price

Volume 5/Issue 3

Danielle K. Miller

Copyright 2017 SVAH Solutions®. 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 e-mail 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

From the Publisher's Desk

Robert T. Yokl

Evidence Can Be Found from Many Sources with a High or Low Degree of Reliability. Are You Employing the Right Sources? Robert T. Yokl

I just reviewed the online poll results on our Healthcare Value Analysis and Utilization Magazine website that asked the question, “What strategy do you believe is the big savings strategy in Value Analysis now?” The preponderance of responders (43%) stated that Evidence-Based Value Analysis is now the big savings strategy for their healthcare organization. However, what does this really mean, since evidence can be found from many sources with a high or low degree of reliability? Let’s briefly review four evidence sources and their degrees of reliability: Supplier/Manufacturer Studies: This is the most available and abundant medical device research in the marketplace. Yet, it is also the most subjective, biased, and one-sided evidence that needs to be digested and employed very carefully. This doesn’t mean that it useless or unusable, but always be cautious and skeptical when using it as your only evidence to justify a purchasing decision. Original Scientific Research: This research is highly reliable, when it is not funded by a supplier or manufacturer, and it is peer reviewed by an authoritative journal, such as, the Journal of Clinical Oncology or Journal of Pediatrics. This is high quality research that you should always seek out from the best authoritative source possible. Subscription Research: This evidence can be original or secondary research conducted by third parties as a subscription service which can be highly reliable. The benefits of these services are that they speak in plain language and offer unbiased analysis on the best value medical devices. Your Own Empirical Data: Too often, we overlook or dismiss employing our own hospital, system, or IDN’s empirical data on a medical device under evaluation. This data can be obtained through surveys, focus groups, and statistical studies of the experience your internal peers have had with this same medical device. For instance, if one of your system’s hospitals is using the medical device under consideration and has found that it is costing twice the cost per procedure than was originally estimated, then this is empirical evidence. When combined, these four evidence sources can provide your healthcare organization with high quality data from numerous sources. The secret to having reliable data is to use more than one source in making your decisions. It’s just that simple! As I have outlined above, evidence can be obtained from many sources with varying quality for your value analysis studies. It’s your job as a VA practitioner to ensure that you are obtaining the highest quality data from the most reliable sources for decision making. To paraphrase the old American Express ad, “Don’t make a value analysis decision without the best evidence available to you!” Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Saves Big Dollars and Makes Sense

23% to 46% of All Contract and VA Savings Fall Through the Cracks and Most Organizations Don’t Know It Is Happening Let Alone Why SupplyValidator™ is a major breakthrough in how we validate the savings that are put on your savings reports. With most CFOs now scrutinizing and reducing budgets accordingly with these manual line item spreadsheet savings, it is imperative that all dollars documented now be audited for certainty. Yet, supply chain does not have the time nor the staff to continuously audit savings once a year let alone on a continuing basis. However, it is necessary for these audits to happen in order to capture variances to the line item savings reports, otherwise the savings just disappear without any action taken. Enter, SupplyValidator™! This utilizes a unique volume centric system to capture the actual results and goals associated with any and all savings. Plus, you can view more than high level results to find out what is actually happening when a savings does or does not meet your goals and objectives.

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Learn More About SupplyValidator™ Today www.SupplyValidator.com

Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

From the Managing Editor’s Desk

Robert W. Yokl

Sometimes the Easiest Way Is the Simplest Protecting Your Greatest Asset Robert W. Yokl

It was just a regular working week for me until I received an email from a health system’s value analysis coordinator with a data request. They wanted to standardize all their respiratory products across their health system and needed some reports to help them along to share with their customers and subject matter experts. Before I do anything I quickly bring up their utilization system to see exactly where they stand with at least three major respiratory product categories to see if the juice is worth the squeeze.

The Best Measure for Any Product Category First, I look at their cost per adjusted patient day on endotracheal tubes, then breathing circuits, and finally ventilator masks, which quickly gives me the confidence that their costs are okay but could be better and that there are in fact standardization opportunities on a number of these major categories. I see the win that they see when they requested the special reports. Right away I can tell that if accomplished correctly, this standardization product will bring them the reduced costs and perhaps help them negotiate better pricing in the very near future. Always good to know at the start of a project that you are working on a winner. That is a plus for my customer’s value analysis team and customers as we can’t afford to have dry holes on any project anymore, let alone waste our time working hours, weeks, and months to find out our project results equal little or no gain. Or worse, cost us more!

The Best Evidence That Can Be Used In Every Situation Is Your Own! Now if I saw that their costs were below industry and historical best practice levels for these three major products, I would have suggested that the standardization efforts may not be necessary because of superior cost per metric levels. I do this on many occasions when I get similar calls or emails from customers. Whether they are standardized or not, I think the bottom line should be cost levels of any given product should be most important versus just standardizing for standardizing. That does not mean that I am against standardizing, but if your product category is well below cost per metric standards historically and comparing to cohort best practices, why should we care that they are using one or two more vendors? Not all instances happen like the one above but there are many similarities that we face in value analysis that we can take for face value (promises) or we can have our own historical data and comparative systems to make our own judgements. I believe that these simple systems and measures will tell their own stories so that you can make the quality decisions without having to take any leaps of faith or waste precious time in the process. Even though savings and better-quality outcomes is the prize in our industry, to us in the trenches the most prized possession is our time and level of quality work we do for our organizations. We must have better systems to meet these new demands so that we only work on the true winning projects and leave the little or no positive results projects behind. Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

When Automation Makes Sense

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Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Join an Elite Group of Value Analysis Professionals Networking — Best Practices — Data Sharing Member Forums — Education — Mentoring

What Are Members Saying About AHVAP? “Great networking forum!”

“I found the AHVAP Foundation and conference very helpful for me to become successful and more resourceful as a Value Analysis professional.”

“Value Analysis in Healthcare has become the ‘go to’ resource for identifying and realizing savings as evidenced by the sheer number of new conference attendees at AHVAP 2013.”

“AHVAP just keeps getting better and better every year!”

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“So glad that there is education in Value Analysis through AHVAP!” “AHVAP has provided a vehicle to share our daily successes and frustrations. The networking opportunities at the annual conference are invaluable. I am proud to be a member of our growing organization!”

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Healthcare Value Analysis & Utilization Management Magazine

Feature Article That Which We Call Evidence James Russell, RN-BC, MBA, CVAHP, Value Analysis Program Director, UW Health, WI

In our busy, healthcare focused careers, buzzwords, buzz-phrases, and acronyms seem to come and go: Thinking out of the box; TQM (Total Quality Management); PDCA (Plan, Do, Check, Act); DMAIC (Define, Measure, Analyze, Improve, and Control); Six-Sigma/LEAN; Shared Governance; and many, many more. The latest irrefutable trump card appears to be the word evidence. As in evidence-based practice (EBP); evidence-based medicine; evidence-based nursing; etc. Although this mantra is not really a new thing, according to Mackey and Bassendowski in The Journal of Professional Nursing, EBP can be traced all the way back to Florence Nightingale. None of us can remember back that far (although, you have to be really old to remember TQM!), but we can certainly see the application of trial and error involving healthcare practices throughout history, and remembering what works and what doesnâ&#x20AC;&#x2122;t isnâ&#x20AC;&#x2122;t truly a recent concept.

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Healthcare Value Analysis & Utilization Management Magazine

Feature Article

James Russell

Assessment All evidence is not created equal. In our world of Healthcare Value Analysis, evidence has become the secret password to get new products, services, and equipment adopted by clinical leadership. A savvy manufacturer’s sales representative will include the word evidence as often as she can, when trying to entice clinical experts to buy their drug, machine, or widget. It really doesn’t even matter what they’re selling. I have honestly had three different vendor representatives from three different companies use the same pseudo-evidence citations to support three extremely different products for inclusion at our facility! All hospitals have similarities in their challenges. None of us want HACs (hospital acquired conditions) like nosocomial infections, pressure ulcers, DVT/PEs, etc., to be present in our facilities. Anything we can do to decrease these terrible patient occurrences is something we’re interested in. However, vendor representatives know this! One of these “never-events” would certainly be CLABSIs (central line-associated blood stream infections). In fact, the Centers for Disease Control (CDC) reports that thousands of deaths annually are caused by these terrible unintended consequences of being a patient in a hospital. Who wouldn’t want to help prevent thousands of deaths? I have had a central line manufacturer’s representative refer to a clinical study as evidence for her antibioticcoated central line in reducing CLABSIs, and then a different representative refer to the same study as evidence for his specialty coated central line dressing to reduce our CLABSI rates, and finally a third representative tell me we could really cut down on our CLABSIs if only we’d lather our patients from head to toe with his CHG (Chlorhexidine) containing products…again, using the exact same “evidence”! When considering evidence-based practice, we sometimes forget the word, “practice,” and substitute “products.” When examining evidence with a critical eye, some basic statistical techniques are helpful. I say this to clinicians frequently, “If you change five things and study it for 60-days, then determine an outcome, how do you know which of your five things influenced the results? Or, was it a combination of more than one of those five?” When performing clinical evaluations on products (I try not to let clinicians call them trials, trials get published…evaluations don’t), I encourage our clinical experts to focus on one variable and hold the rest as controls. This rigidity doesn’t mean the evaluation can’t be flexible. It may be apparent only a few days in that things are trending the wrong way. It’s okay to Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Feature Article

James Russell

say, “Stop!” Change something else and see what happens. Controlling for variability is an important aspect of ensuring accurate conclusions. Here’s a simple example that I’ll return to later: My hospital purchases a dozen different products to help reduce CLABSIs. How much sense does it make to change three of them at the same time and try to draw any conclusions from the resulting increase or decrease (or consistency) in our infection rates? One thing at a time. If we want to evaluate a new central line dressing, do that. If we want to evaluate a different needleless connector, do that too…just not at the same time. If we want to see the value of alcohol-based caps attached to unused central line ports, okay…but that’s a separate issue. If time is of the essence, then do each evaluation on separate units and watch the trending. This isn’t ideal, I’d much rather have the same caregivers (or at least the same unit) involved with all aspects of trying to assess the value of products designed for one purpose (reducing CLABSIs), but we are often engaged in Rapid Cycle Change (another buzz-phrase) and we just can’t wait!

Planning I’d like to set a goal for future conversation by looking back at the beginning of this article. I think we’re focusing on the wrong word. Instead of evidence-based practice…let’s call it evidence-based PRACTICE! As one of my favorite professional basketball players once lamented, “We’re talking about practice!” Below, under “Implementation” are a couple of examples of what I mean.

Implementation In LEAN terminology, “Going to the Gemba,” is a strategy where you physically go to where the actual work is being performed…and watch. It’s a great opportunity to check yourself. Is what you think is happening really happening? Do practitioners follow protocols only when someone is looking? Is there a Hawthorne effect present when change occurs? Hawthorne is actually quite interesting in terms of Value Analysis. It is named for a study in which factory employees’ output was compared using different environmental factors (low lighting vs. bright lights, etc.). The Hawthorne effect is that the different factors didn’t improve the employees’ performance nearly so much as the fact that someone was paying attention to them. In short, when you make a change in one area, people tend to focus on the whole operation for a time, but it is usually short-lived. You are less likely to leave your clothes on your bedroom floor just after you’ve cleaned your house. In Value Analysis, you will see improvement in overall clinician compliance with a protocol right after you change to a new product that requires comprehensive education on it. In fact, improvement will occur in areas very unrelated to the product in question.

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Healthcare Value Analysis & Utilization Management Magazine

Feature Article

James Russell

Example 1: I went to a few clinical areas and hung around for a while. My peers call this “making rounds.” I don’t make rounds. I hang out. In one area, while gently prodding my customers for ideas that could improve their work lives, I stumbled upon an “aha” moment. Actually, I didn’t stumble, a nurse slapped me with it. Here’s how our conversation went: Nurse:Let me explain to you how some CLABSIs might occur. Me:

Okay, go for it.

Nurse:Okay, when I change a central line dressing, sometimes, I don’t wash my hands. Me:

What? Are you nuts?

Nurse:Here’s what happens. I put on a pair of gloves, peel off the old dressing, take off my dirty gloves and put on clean gloves before cleaning the site and placing a new dressing. I don’t wash my hands between the dirty and clean gloves. Me:

Why not?

Nurse:Because the sink is nowhere near my patient’s central line! And I’ve just uncovered it and left it open and vulnerable. I don’t want my patient reaching their fingers up and contaminating the site while I’m 8 feet away washing my hands. Me:

So use alcohol sanitizer.

Nurse:That’s 10 feet away, even farther than the sink. Me:

Well then…

Nurse:Yes? Me:

Maybe we should put a little bottle of sanitizer in our kits, on top of the gloves, so you almost have to use it before donning the clean gloves.

Nurse:Now you’re paying attention! Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Feature Article

James Russell

This is exactly how we got alcohol sanitizer into our CL dressing change kits. Before making the change, I asked several nurses to walk me through the scenario painted by this wonderful bedside nurse (with several years of experience) and each one was convinced that handwashing wasn’t a problem, until they got to the part about donning the clean gloves right after handling a dirty dressing. They didn’t see the issue until it was pointed out. I didn’t either. This wonderful nurse changed not only her practice, but the practice of our entire facility. How cool is that? We didn’t change (or add yet another) product…we changed our practice. Many of my best ideas come from the bedside, just like this one. Example 2: One of my favorite Nurse Managers spent some time spying on her staff. She wouldn’t use that term, but it’s what she did. While on her unit working, she’d make a special effort to pay attention to something most of us ignore. One week she’d focus on the noise level of her unit. Another week she’d focus on the conversations she (and therefore the patients and their families) could hear. Another time she’d watch how often a “handwashing encounter” (another buzz-phrase) would occur and be skipped. Her tactic took some courage. She had to resist the urge to correct what she saw immediately (and therefore let her folks know what she was really doing), unless it was something egregious. In short, she examined her staff’s practice with a critical eye for detail. How’s that for evidence? It might not be citable as a reference, but that’s only because it’s actually an observed behavior, not just one that was read in a journal. Objective occurrences, rather than subjective articles, can be very powerful. I’m not discounting the importance of journal articles…I’m writing one! I’m simply pointing out how impactful “local” data can be. What this nurse leader learned was important. What people think they do may not actually be what they do. In her later interactions with her staff, many of them would firmly deny that what she’d seen had actually occurred. Statements like, “I always wash my hands before leaving a patient’s room,” were common, even though the manager had seen it with her own eyes. Her tactic was excellent, I thought. She’d send these folks away with the task of watching one of their peers for the next shift and trying to spot an “encounter” that didn’t go as planned. Each of them would return with evidence of someone else breaking a protocol without realizing it. Some of them would admit that perhaps they could be guilty of the same thing. There was nothing punitive about this. It was simply performed as an education exercise, for all involved. It worked.

Clinical staff began pointing out these occurrences to each other, not as a “gotcha”, but as, “I bet you Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Feature Article

James Russell

think you washed your hands before coming out of that room, but you didn’t.” And, “Did you know that your voice carries all the way over here? I could hear you talking about your patient’s test results. If I could hear it, so could other patients.” By “monitoring” each other, they tightened up their own ship. How great is that? It’s too soon to tell if this has resulted in sustainable improvement in things like HCAHPS results, or HACs, (remember Hawthorne?), but we’ll be watching the data!

Evaluation When engaging in evidence-based practice, evaluating the quality of that evidence is always a good idea. I think most of us are now used to searching PubMed for articles and trying to determine if the authors had anything to disclose related to gifts from the companies involved in the studies they wrote about. I think we’ve all seen the evidence pyramid in Figure 1. Personally, I’ve had it shown to me on more than one occasion to show me how much weight my “expert” opinion carries. This isn’t to say we shouldn’t evaluate the evidence we use to support our practice. Quite the opposite. I’m a proponent of full transparency when it comes to evidence. Did you know that as a result of the Patient Accountability and Affordability Care Act, you can read a clinical study authored by a physician extolling the benefits of product (or medication) X and look that physician up on the Open Payments website to see if they’ve received money (transfers of value) from the makers of product (or medication) X? This level of transparency has traditionally been difficult to uncover. Now, it’s right out there in the open, on a publicly searchable website. I tell our doctors that their patients can

search them…and will! Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Feature Article

James Russell

Whenever I receive a request for a new product from a physician, one of my steps is to see if there could be any appearance of impropriety by having significant dollars exchange hands (from the company to the physician) and if the physician has listed the transaction on their conflict of interest statement. Transparency is my favorite word! However, I am also an advocate of not solving clinician practice problems with new products. As my nurse manager friend learned, new products aren’t the answer for poor handwashing. Earplugs may be of some benefit for some patients, but clinicians can also talk in more appropriate tones (and not violate patients’ confidentiality while they’re at it!). Learning what clinicians actually do, not what they think they do, and not what they say they do, can have an extraordinary impact on outcomes. Not just clinical outcomes, but financial outcomes as well. Even patient satisfaction can improve when we all pay attention to our practice. So remember, next time you hear, “At our hospital, we follow evidence-based practice,” hear an emphasis on the word practice. Question what you’re hearing, not just in terms of published peer-reviewed journal articles, but also in terms of the power of first-hand objective observations. You may be surprised at what you find.

Conclusion You may have noticed that I used the Nursing Process as an outline for this article. Why would I do that? Because, in its own way, it’s evidence-based practice. There’s nothing wrong with using “old” techniques and terminology, when they’ve been shown to be effective. The nursing process is a great example of a well-used template for project management that has stood the test of time. I’d call it evidence AND practice.

James Russell, RN-BC, MBA, CVAHP, is the Value Analysis Program Director at UW Health (the University of Wisconsin). Jim has 3 decades of nursing experience; a third in critical care, another third in psychiatry, and the last 10 years in healthcare value analysis. He’s been in both staff and leadership positions in the for-profit, community healthcare sector, as well as in several Academic Medical Centers. Jim has published dozens of articles on value analysis and nursing leadership, and speaks regularly at national conferences. You can contact Russell with your questions or comments at jrussell@uwhealth.org Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Utilization Management

Robert W. Yokl

It Wasn’t Raining When Noah Built His Ark Foreseeing the Future but Reaping the Benefits Right Away One of my company’s most popular podcasts over the past 11 years is “It Wasn’t Raining When Noah Built His Ark.” Whether you are a believer of this story or not, it is still a strong metaphor for where we need to be with our healthcare savings, quality, and sustainability programs. The whole premise is that Noah, foreseeing the coming storm, was being proactive in building his ark and gathering all the animals and succeeded in his quest before the storm hit.

Look to Proactively Develop New Savings Avenues Before the Storm Arrives Versus Haphazardly Attacking Costs During a Crisis As a value analysis or supply chain leader, you must be thinking about areas in which you can be proactively developing systems, methods, and reporting, as opposed to quickly and haphazardly trying to reduce costs while in crisis mode. The worst place to be is in crisis mode, as you are under extreme pressure to deliver results. In most cases, because of the rush to put savings on the board, we inevitably leave big dollars still on the table because we are forced to move on to the next big thing our management wants us to work on. Some of you reading this are experiencing this right now and are riding out the storm, while some of you are starting to see the beginning of the storm.

Extreme Budget Tightening and Shoring Up National and Regional GPO Partners is a Great First Step Things like extreme tightening of non-salary budgets as far as they can go are always a good first measure but that may only work for the first year of a crisis. We are seeing more hospitals switching Group Purchasing Organizations and/or joining regional cooperative groups to further push their price savings to new levels. This is the ultimate goal for a hospital’s group purchasing model, yet once all the volume has been committed and contracts implemented the savings diminish dramatically and trickle in instead of flood in when you first join. The end result is that at best you may be saving 1% to 2% in total supply budget in subsequent years, so this model should be in your plans, but like tightenVolume 5/Issue 3

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Utilization Management

Robert W. Yokl

ing the budgets you may only get a one-year effect in overall savings. Plus, there is a cost to converting to new contracts and you do not always get the full worth of the promised/guaranteed savings until the second year of converting to a new GPO.

What is the Biggest Bang for the Buck We Should All Be Striving For? This takes us to two areas that have the biggest potential if calibrated and attacked appropriately: Value analysis and supply utilization. I will make no bones about it, I see these as the biggest savings opportunities by 7% to 18% of total supply budget; 3% to 5% in VA alone and 5% to 15% in supply utilization, and if you combined the two together which is the ultimate model, you will save 7% to 18% of total supply chain budget!

Underused, Underappreciated, and Missing Huge Opportunities Let’s look at value analysis. If you are looking for big savings from VA, you will need to ascertain how you are using your VA program and whether you are tapping into the true potential of what VA can do for you. If you are only using VA for new products, contract conversions, and the occasional quality or cost problem, then you may only be getting marginal, if any, savings when you net out the cost increase from new products to positive savings implementations. This is wasting the potential of value analysis. You should look to focus at least 50% of your value analysis efforts on proactively attacking your high dollar and high utilization categories, while the other 50% can handle new products and contract conversions. If you want to be successful, then you will move towards this model.

When Are We Going to Learn that We Need to Throw a Blanket Over Our Total Costs to See All and Know All at Any Point in Time? Now, let’s look at supply utilization management. Supply utilization management in concept is really throwing a blanket over all of your “Total Cost of Products” and tracking these using a volume centric methodology (activity-based costing) to show you the highs, lows, and mid-ranges of your supply chain monthly, quarterly, and by fiscal year. As we always say, supply chain costs are always a moving target but with supply utilization this levels the playing field on volume fluctuations. This then tells you which products/categories are running high and need to be addressed by value analysis, standardVolume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Utilization Management

Robert W. Yokl ization, or perhaps a new contract. Simple, right? From there, we use our supply utilization reporting to power the value analysis engine. Where are we getting 50% of the new high value analysis candidates that are 80% to 90% supply savings winners every time? From supply utilization reporting!

Before, During, and After Should Be Important to Everyone in Supply Chain Without supply utilization management, we may think that we just improved our price position by 12% on a contract and projected out big savings based on the past 12 months of spend. But was that last 12 months on the upswing, downswing, or something else? Was it at a fiscal year high, low, or mid-range level? If we implement a 12% savings on a category and the category was already starting to increase costs by 15% every fiscal year, then the 12% savings in the base 12-month projection period does not mean much. The hospital will still be faced with an ongoing cost increase but may not revisit this area because they think they saved 12%, when in fact the costs are still rising. We can no longer have this occurring without contracting, sourcing, and value analysis knowing.

Save Big Now, Not Later, When It Comes to the Next Biggest Bang for the Buck There is an adage in healthcare that I have heard many times from supply chain directors, CFOs and VPs, and that is to focus on the biggest bang for the buck. My goal with this article is to spell out the next biggest bangs for the buck, or next generation of savings that you should not only plan for but simultaneously work on while you are still joining that regional cooperative, GPO, or other supply chain initiatives. The opportunities are there now to start to plan out and add new elements to programs that you have in place to be more proactive in gaining the next levels of big supply chain savings. Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

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Healthcare Value Analysis & Utilization Management Magazine

Value Analysis 101

Robert T. Yokl

Where Does Evidence Fit Into Your Value Analysis Process?

First, I hope all of our readers have a set value analysis process (i.e., defined number of steps to be followed by you or your value analysis team members with their evaluations), like Six Sigma or Lean Management. If you don’t have such a VA process, then you might want to develop your own unique VA process (like SVAH’s Value Analysis Funneling© Model shown in Figure 1) so you or your VA team members can have a consistent roadmap to follow when conducting a value analysis study that is repeatable, trainable, and is an auditable scientific process. This VA process requirement shouldn’t be optional for you and your VA team if you are striving to have the best value analysis program in your region. A defined VA process needs to be mandatory! When is the Right Time to Gather Evidence? With that said, where in your value analysis process should you gather evidence (pro or con) on the

Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Value Analysis 101

Robert T. Yokl

product, service, or technology under investigation? In SVAH’s Value Analysis Funneling© Model (Figure 1) we require VA teams that we train and facilitate to gather this evidence early in the Understanding or Investigative Phase of the Value Analysis Funneling© Process. Why? Because if you or your VA team members uncover that the product, service, or technology under investigation has serious drawbacks you might want to save your limited time by stopping your value analysis study now. For instance, if your hospital is considering buying a new laparoscope manufactured by the XYZ company and early on in your VA study you discover, through your search of scientific literature, that reliable studies have found that the laparoscope under investigation is impossible to clean properly, then why waste you or your VA team’s time on moving on to the next value analysis phases? We call this step recalculating, just like when your GPS tells you if you are off-course. If this occurs, there is no need to go further with your VA study!

Figure 1

Where Should You and Your VA Team Find This Evidence? Paul Levett of George Washington University tells us that, “No one database can search all the medical literature. Searching is an iterative process, and you will need to search several different databases. That being said, if you want to do a very quick search for existing systematic reviews on

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Value Analysis 101

Robert T. Yokl

your topic, search PubMed Clinical Queries using simple keywords and look in the center column of results for a list of recent systematic reviews.” At a minimum, Levett says, you need to search MEDLINE, EMBASE, and the Cochrane CENTRAL trials register to conduct a thorough search of medical literature. This all sounds simple until you try to do it! Based on a few quick searches, as recommended by Levett, I found myself utterly confused over the amount of data available to be researched. In fact, I concluded it would take hours or even days to research even the simplest medical device, such as a thermometer. Therefore, it is my recommendation that your hospital, system, or IDN subscribes to a medical device research service like Procured Health, Hayes Inc., or ECRI who have already done the hard work of researching, cataloging, and documenting this evidence for you in a searchable database. Otherwise, you or your VA team members will never have the time for this important research for your value analysis studies. Sometimes, it makes economic sense to outsource the hard work.

Just One Piece of The Value Analysis Puzzle In conclusion, gathering high-quality reliable evidence for your value analysis studies is just one piece of the value analysis puzzle. You and your value analysis team members also need to: • • • •

Brainstorm to identify at least three additional lower cost alternatives compared to the product, service, or technology under investigation. Analyze the lifecycle cost of all your alternatives and identify the best option. Plan for the deployment of your best value alternative with a pilot study. Execute your plan of action to include in-service training, return of old stock, and updating policies and procedures to seamlessly deploy your new medical device.

While evidence is the linchpin for all value analysis studies, it can’t be the only criteria for purchasing a new modality. The commodity also needs to be vigorously debated by your value analysis team with all the above information in hand before it can be considered a done deal. That’s why evidence is just one piece of the value analysis puzzle. Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

What is Value Analysis?....Itâ&#x20AC;&#x2122;s All About Perspective

Learn How to Get More Value Out of VA at the Value Analysis Academy Website Now Open! atHealthcare www.ValueAnalysisMag.com/Academy Value Analysis & Utilization Management Magazine

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Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

VA Team Dynamics

Laura Polson

Clinical Value Analysis: Increasing Your Team Speed!

Our Clinical Value Analysis (VA) roles are evolving. Every day healthcare leadership struggles to improve the quality of care and reduce supply expense. This is nothing new. So whatâ&#x20AC;&#x2122;s driving this evolution? Speed. Plain and simple. Before, like any bureaucracy, we held meetings upon meetings. We planned capital expenses and budgets well in advance, put off replacement decisions for years, and tried to recruit the finest clinicians new toys could attract. Through years of mergers and acquisitions we lost the ability to be flexible, to make decisions our clinicians found trustworthy from manual chart reviews. We made money, but change took time. A typical VA Director completed all steps of any conversion project, from idea and analysis to training and distribution implementation. With the speed required to deal with declining inpatient admissions and value-based purchasing penalties weâ&#x20AC;&#x2122;re seeing all sorts of new VA roles. Financial analysts, clinical resource specialists, Lean team green belts, and clinical quality implementation managers are some of the new support staff required to keep multiple projects and conversions on track and sustainable over time.

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Healthcare Value Analysis & Utilization Management Magazine

VA Team Dynamics

Laura Polson

Today, the EHR (electronic health record) rules the financial hierarchy of healthcare as surely as the defense budget commands our taxes. We invest exorbitant fees for software, capital, training, and upgrades and still struggle to obtain the information within. Legacy systems with historical data were rarely integrated for comparative analytics. We continually search for data software system tools to extract files and examine purchase history, benchmark spend, and utilization trends. Group Purchasing Organizations (GPOs) flock to offer resources and systems at a premium price. (Your Supply Chain department clinician who was the original VA Director must not only have clinical expertise, but extensive business, legal, regulatory, and computer system skills!) That still leaves clinical outcome data and standardization opportunities as the holy grail of VA information needs. We are sifting through mud for grains of wisdom, and ever glancing backwards through time. By the time decisions are made, the information is obsolete.

Speed. How do we catch up with changing reimbursement strategies? Where do we look for answers to variable spend which must match value-based rather than fee-for-service structures? We’ve got to be proactive…and FAST! There has to be a value analysis review up front on every dollar spent. We are no longer looking at buying the cheapest product. We examine the value of every available product, its equivalent function and contribution to overall quality outcomes, as well as true necessity. The days of buying “nice to haves” are over. We look at procedure reimbursement and clinical requirements tying these products to revenues such as an inpatient status.

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Healthcare Value Analysis & Utilization Management Magazine

VA Team Dynamics

Laura Polson

Speed. We have to be nimble and quickly consider all stakeholders affected. Value Analysis resides between all the silos which historically have made decisions on their department equipment and supplies with minimal consideration to the overall picture. Administrators considered requests whose ROI information rarely reflected a standard approach to system needs. Leaders with strong negotiation skills and great analysts often spent most of the available funds whether or not it was patient centered or the best value to support the organization’s overall mission. Now a Value Analysis Steering Team combines information after it’s reviewed by various specialty VA teams whose expertise can make informed decisions on services, supplies, and equipment. With VA Team leaders and administrators working together as a team, all players can have input on key decisions which everyone can support. Speed. We’re running out of time to waste. Invest in your VA structure to speed up your team!

Laura L. Polson, BSN, RN-BC, CVAHP has 35 years of nursing and management background in multiple specialties (certifications include CVAHP, ACLS, BCLS Instructor, CCRN, CVN, RCIS, CVT) including cardiac cath, electrophysiology, and surgery. Laura held corporate director and consulting roles in one of the largest healthcare organizations (Columbia/HCA had 396 facilities at the time) with focus on cardiovascular care, wound care, quality, lean six sigma, risk management, regulatory compliance, and emergency medicine. She helped pioneer the value analysis role as Product Utilization Director for a multi-hospital market in the early '90s and continues in value analysis at her current role as Clinical Quality Value Analysis Facilitator with Kentuckiana Baptist Health. Polson volunteers as the AHVAP Northeast Region Board Director and Marketing Committee Co-Chairperson, MDIC Consortium FDA/AHRMM Committee, and the Premier Continuum of Care and Value Analysis Councils.

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Leadership Interview

Value Analysis Leadership Interview Hani Elias, JD, MPH, CEO and Co-Founder of Procured Health Gina Thomas, RN, MBA, Procured Health Chief Development Officer

Hani Elias is the CEO and co-founder of Procured Health.

Prior

starting

Procured,

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

www.procuredhealth.com/knowledge. Gina Thomas, RN, MBA â&#x20AC;&#x201C; Procured Health Chief Development Officer, Gina spearheads commercial strategies and helps guide product vision. With over 35 years of healthcare experience, starting as an emergency room nurse and later

becoming a nursing executive, she brings a wealth of knowledge to the company, including strong expertise in preparing for new payment models, aligning

clinicians, service line best practices, and executive-level approaches

to resolving fragmentation in healthcare. She is passionate about patient advocacy. On a personal note, she has been married 32 years to her #1; has 2 daughters who she adores; and she says they have even found great guys who they married!

Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

Leadership Interview

Hani Elias and Gina Thomas

(VAMag) Could you tell us a bit about your background and how you got into value analysis in healthcare? Hani: I came to value analysis without really knowing much about the discipline. I was previously a management consultant at McKinsey & Company, and while there, I worked with a client that struggled to gain market awareness in the US for a less expensive, clinically equivalent medical product. That experience led me to critically examine how hospitals and clinicians made decisions in various parts of the world. It was striking to me that, in the US, clinical preferences were often the result of a sophisticated sales team rather than a thorough analysis of the product. That’s how I was introduced to value analysis and variation reduction. I saw a huge opportunity to improve our healthcare system.

clinicians are left making decisions based on what they have available: Marketing materials and personal experience with the product. Unfortunately, marketing materials are inherently biased and incomplete and personal experience is inherently limited. Evidence allows for much more confident decision making. It shouldn’t be the only information source, but it is a key one that has been missing from most product use and value analysis decisions.

Gina: In the 1990s, I joined what was then Baxter Healthcare as a consultant, based on my experience in emergency nursing and nursing Administration. I initially focused on driving down costs per procedure, primarily in the OR. Over a span of the next 10+ years, I served both as a consultant and back in the provider space either consulting on or setting up value analysis processes and teams.

Gina: As an avid reader, I believe that knowledge is the key to improving our ability to make decisions. Healthcare is no different, and in this case, knowledge can save lives. Unfortunately, I’ve had experiences both professionally and personally where evidence wasn’t fully leveraged and patients’ lives were jeopardized. So to say I’m passionate about this is an understatement.

(VAMag) As a leader in Evidence-Based Value Analysis, why do you think it is important for hospitals to integrate an evidence-based approach to their value analysis programs?

Providing clinicians with facts optimizes their ability to make truly informed decisions about the treatment of their patients. An evidencedbased approach transcends value analysis programs. Evidenced-based decisions must span all levels and service lines within an organization. It takes an army to sift through all

Hani:

Without

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evidence,

hospitals

and

Healthcare Value Analysis & Utilization Management Magazine

Leadership Interview

Hani Elias and Gina Thomas

At Procured Health, we’ve done our own investigations and have found that clinicians would have to read approximately five hours a day just to keep up with all of the new and increasingly complex information out there. There’s a great video about all the information inundating the human brain today—it’s no wonder that it’s such a challenge to integrate an evidenced-based approach with so much information. (VAMag) The Surgical/Perioperative area of the healthcare supply/value chain has been traditionally known as the “Last Bastion of Supply Chain Savings.” What have we been missing all these years that we can now address today?

decisions. These shifts are affecting multiple areas in the hospital, and supply chain has benefited tremendously. Gina: Utilization should be addressed at a deeper level using evidence, trends, and market dynamics. There are some great articles out there showing that money drives utilization. I don’t embrace the notion that clinicians knowingly perform more procedures when they are paid at a higher rate. However, we do have solid evidence of o v e r - u t i l i za t i o n , over-prescribing, and over-diagnosis which is due to a combination of the no-patience, “justgive-me-a-pill-for-that” society we now live in along with certain payment and incentives structures. It’s time to take a hard look at the utilization issues, but that requires all of us to be diligent or continue to face the consequences. (VAMag) Over the past few years, you have published articles and blog posts regarding doing away with the value analysis committee model in healthcare. Could you explain why healthcare organizations should consider this audacious approach?

Hani: Two macro-level factors are making it possible to address cost in what have historically been “third-rail” categories. First, there is a much greater appreciation across all stakeholders for the need to be better financial stewards for the patient. Sensitivity towards healthcare cost inflation has increased and we’re seeing a desire to deliver value, not just quality. Second, significant technological advances are enabling health systems and clinicians to make better Volume 5/Issue 3

Hani: Too often, I see value analysis teams focused on managing product introductions. They have processes and governance committees in place to conduct due diligence and facilitate the introduction of new products. These groups could have a much larger return on investment if they also tackled existing spend, including eliminating unnecessary variation and ensuring appropriate usage of products.

Healthcare Value Analysis & Utilization Management Magazine

Leadership Interview

Hani Elias and Gina Thomas

find physicians willing to contribute their time. Moreover, several other operational functions within the hospital also require physician time. By looking at all of these topics and issues holistically, physicians can make more informed tradeoffs. For example, they might recognize that a reduction in supply costs can be used to support investment in OR efficiency. Gina: Value analysis as a stand-alone governance process is failing, and many organizations have seen this. It must be embedded within an organization’s clinical care governance as a patient-centered multidisciplinary approach. Unfortunately, many value analysis leaders have been inundated with contracting and sourcing projects rather than having the opportunity to drive true value from a clinical and evidenced-based perspective. In addition, value analysis committees are trying to ‘pull’ clinicians to their committees when it would be more beneficial for value analysis leaders to be invited to a clinician’s conversations about care decisions. Even with the best intentions, starting a conversation with a clinician by talking about contracting and/or cost doesn’t yield effective results. However, clinicians are all concerned with high-quality care; they sincerely want to provide evidencedbased medicine and most truly believe they are doing so. Unfortunately, there’s no practical way for them to keep up with evidence without the intense reading I mentioned earlier. Our own research shows that clinicians don’t become dissatisfied with healthcare organizations because of the treatment options available to their patients, they become Volume 5/Issue 3

dissatisfied when they can’t efficiently provide that treatment. If hospitals could provide clinicians with evidenced-based insights that enhance the time and processes required for patient care, I strongly believe it would lead to better decisions for patients from both a quality and financial perspective. And that’s not even talking about the hospital’s cost burden. This is what it would take to conquer waste in healthcare. To paraphrase an expression from

my nursing days: “The right drug at the right dose would be used on the right patient at the right time for the right care.” (VAMag) In a recent video released on Linkedin.com, you have shared a collaborative roundtable session with an emphasis on Physician engagement and communications. How can this help value analysis, supply chain, and hospital executives meet their value-based goals? Hani: You can’t stamp out unnecessary variation and unwarranted cost without physician engagement. Doctors, as well as nurses, have great ideas, and administrators who harness their input reap significant rewards.

Healthcare Value Analysis & Utilization Management Magazine

Leadership Interview

Hani Elias and Gina Thomas

Gina: By taking a patient-centered focus, collaborative roundtables such as ours allow for people from different organizations to talk through their challenges in a safe environment. No matter if itâ&#x20AC;&#x2122;s a clinician or a hospital leader, they not only share strategies but discuss how they might facilitate success at their own respective organizations. (VAMag) Where do you see the healthcare value analysis world going in one, two, or even five years from now and how should hospitals, systems, and IDNs be positioning themselves to maximize value in the era of value-based purchasing? Hani: I can see value analysis evolving in two ways. I can see a world where value analysis is the source for product information. There is momentum to push sales reps out of the OR, and I can see health systems making investments to ensure they have internal resources who can serve as subject matter experts in specific categories. This will require hiring more value analysis leaders, because having the domain expertise necessary to contribute to physician needs in several areas will be difficult. Value analysis leaders will serve as category managers and be responsible for managing new and existing spend, as well suggesting new products to physicians and nurses that improve value, even if they are costlier. I can also see a world where value analysis is subsumed within performance improvement and service line optimization efforts. As health systems look at cost per case more holistically, I

Volume 5/Issue 3

wonâ&#x20AC;&#x2122;t be surprised if there is an organizational shift to align with a new unit of analysis. Gina: The greatest value comes from true integration with clinicians at the bedside around the clinical decisions being made. Giving proactive insight into trends that are occurring within patient treatment decisions will drive greater outcomes for patients and the systems that serve them. Think about the possibilities if information could be shared with a physicianâ&#x20AC;&#x2122;s office or in the emergency department for certain diagnoses instead of waiting for an event to happen. For instance, a patient who has a history of heart disease would be flagged with the latest therapies and applicable evidence, including the trends in efficacy and safety from both a quality and cost perspective. Care coordination rounds with clinicians, pharmacists, service line leaders, and social workers would address the decisions for drugs and devices in the moment of treatment by reviewing the evidence on an iPad or smartphone. We may raise the bar of high-quality care at a more effective cost compared to other countries!

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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.

•

No More Guessing Where Utilization Savings Are Hiding In Your Clinical Departments

•

Goes Beyond Supply Budgets to the Actual Utilization for Each Department by Major Supply Category

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No More Pushback from Nursing or Clinical Departments on Savings

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Drill Down to the Exact Product that is Causing Your Utilization Cost Overrun

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The Last Word

Robert T. Yokl

Moving Beyond Standardization and Best Price Robert T. Yokl, President/CEO, SVAH Solutions

Twenty-five or more years ago, hospitals and health systems (thatâ&#x20AC;&#x2122;s all there was at that time) had committees called Standardization Committees that evaluated and approved the new products, services, and technologies for their hospital or system. The main function of these committees was to limit the number of line items in each category of purchase, keep inventory to a minimum, and of course, obtain the best price through standardization. The committees contained eight to fifteen members and were made up of department heads and managers who represented all the major departments in the hospital or system. This was the model that was adopted and transitioned into Value Analysis in the mid to late 1990â&#x20AC;&#x2122;s. Most of these committeesâ&#x20AC;&#x2122; responsibilities did not change when hospitals and systems started calling their Standardization Committees Value Analysis Committees. In fact, they still did business the same way while adding a few more responsibilities (e.g., recalls, GPO conversions, etc.). The result being that these Value Analysis Committees continue to operate today in much the same manor that they did in the past. The question is, do we need to change this model?

Moving to the Next Level of Value Analysis Performance You might be thinking that I am about to throw a bitter spice into the nicely made recipe for value analysis that we have known for decades, but the reality is that our own supply chain industry is being turned upside down. Therefore, we need to take our value analysis programs to the next level of performance beyond standardization and price to meet this challenge. So, what does the next level of performance mean? Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

The Last Word

Robert T. Yokl

Value analysis committees have been operating as extensions of their purchasing departments with an emphasis on standardization and best price, while not performing functional analysis (the core technique of the value analysis methodology) on the products, services, and technologies they are buying. This should be every value analysis committeeâ&#x20AC;&#x2122;s mandate. By not doing so, these value analysis committees are missing an opportunity to save, on average, 3% to 7% on your hospital or systemâ&#x20AC;&#x2122;s total supply budget beyond price and standardization initiatives.

The Search for Lower Cost Alternatives The classic definition of value analysis is the study of function and the search for lower cost alternatives. As previously stated, standardization and best price should be the province of your purchasing department, once your value analysis committee has decided on the most appropriate lowest cost alternative product, service, or technology. For example, if a department requests a new catheter kit, the first thing that needs to be accomplished by your value analysis committee is to perform a functional analysis of the kit components starting with the highest cost component (e.g., the Foley catheter) which functionally drains the bladder. Then, brainstorm ideas that can reduce the cost of the components or kit that will provide equal or greater reliability and functionality. Maybe you could substitute two sterile gloves for one, eliminate a component, or search for a generic kit versus custom. The result being that you will save, on average, 26% of the cost of the current tray vs. just standardizing and obtaining the best price on the tray that was requested. Standardization and price strategies will only yield 1% to 3% savings on your hospital or systemâ&#x20AC;&#x2122;s overall supply budget.

Follow the Classic Tenets of Value Analysis If you have been paying attention lately, your standardization and price savings is slowly disappearing. Just the other day, we calculated that a respected regional GPO savings for a year for its members was only 1.4%. This is meager savings when you consider that your value analysis savings could be savings and additional 3, 7 or even 15% annualized if you follow the classic tenets of value analysis developed by Larry Miles (the father of value analysis). Leave the standardization and best price responsibilities to your purchasing department. Volume 5/Issue 3

Healthcare Value Analysis & Utilization Management Magazine

CliniTrack™ Value Analysis Software System Finally, a System that is Truly Designed for Managing the Entire Value Analysis Process for Your Hospital, System, and Value Analysis Committees/Teams

CliniTrack ™ is designed to not only take you beyond the world of Word and Excel spreadsheet documents but to give you a decided advantage in managing your projects, data, and teams. CliniTrack™ is based on the combined experience of a 30-year value analysis company with the rock solid feedback of our customers to make this the best and most effective value analysis software for you, the supply/value analysis professional. Key features include: 

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