HC Value Analysis and Utilization Management Magazine_Volume 12 Issue 1

By

Healthcare Value Analysis & Utilization Management Magazine

Healthcare Value Analysis & Utilization Management Magazine is published Bi-monthly by SVAH Solutions®

Box 939, Skippack, Pa 19474 Phone: 610-327-4820 bobpres@ValueAnalysisMagazine.com

Editorial Staff Publisher

Robert T. Yokl bobpres@ValueAnalysisMagazine.com

Managing Editor

Robert W. Yokl ryokl@ValueAnalysisMagazine.com

Senior Editor

Patricia A. Yokl

Editor and Graphic Design

Danielle K. Miller

Copyright 2023 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: 610-327-4820

E-Mail: ryokl@valueanalysismagazine.com for approval to reprint, excerpt, or translate articles.

Robert T. Yokl

Is PPI Standardization the Answer to More Savings?

Robert T. Yokl, President/CEO, SVAH

I just read an article in one of our industry’s leading supply chain publications touting the benefits of the standardization of physician preference items (PPI) as the next level of supply chain savings performance. This PPI savings is accomplished by reducing the variation or brands of different PPIs (pacemakers, orthopedics, stents, etc.) a healthcare organization is buying. This strategy also reduces the chance of errors by staff who are required to be educated in the use of multiple PPIs with different techniques for the same purpose.

While this strategy is a noble endeavor, it is one most fraught with danger because your surgeons are trained on a certain device (pacemaker, orthopedic, stent, etc.) and aren’t easily dissuaded from changing their preference. A better way is to make sure the average cost of your PPIs is equal to or lower than the national average. For example, if your CRM general pacemaker average is running at $5,200 and your cohort average best practice is $4,200 and both include a lead, then you need to focus on the functional specifications and what the cardiologists are selecting. We saw recently that one client had great selection criteria with two out of their three CRM manufacturers, but needed to address the selection criteria in their third.

The goal is to encourage your surgeons to only use PPIs that fit that cost target or assist you in negotiating with your vendors to lower their pricing to functional requirements matching the national average. It is rare that this strategy doesn’t work since your surgeons have enormous influence over your PPI selection, and your vendors know it.

Another option is to meet with your new surgeons and your medical director to understand their PPI requirements and then to explain your PPI cost strategy. In most cases, your new surgeons can select from a brand that is already under contract. If not, have them negotiate pricing with their PPI vendor to conform with your PPI pricing targets.

The reason I like this PPI pricing selection strategy best is that you aren’t forcing change on your surgeons but partnering with them to find a solution to your cost problems. Remember, people like the change that they make happen!

Solutions

“Remember, people like the change that they make happen!”

Our Time is Now...Are You Ready?

By Robert W. Yokl, Sr. VP, Supply Chain & Value Analysis SVAH Solutions

If you are looking to make a big impact in reducing your organization’s bottom line, there is no better time than the present for you to fully engage in this endeavor. With inflation and revenue challenges due to reduced reimbursement and other market conditions, most healthcare systems are facing budgetary shortfalls. The good news is that the best way to add money directly to your organization’s bottom line is to reduce costs.

There has never been a more perfect time for supply chain and value analysis professionals to fully engage in cost reduction. The savings you and your health system colleagues will generate will not only aid your organization’s bottom line but this profit will be used to improve care, buy better products/services, ensure capital programs are fully funded, ensure better raises and/or bonuses, as well as hire staff. Healthcare organizations are non-profit by nature, but really need to make profits in order to continue to raise the bar on services and overall care.

Value Analysis Led Cost Savings

What other clinically or even non-clinically oriented team-based program in the hospital is built to handle cost management in a 360-degree manner in a healthcare setting? Other than your entire management team engaging at all levels, it is the best process-driven game in town to tackle the next level of cost management/optimization while maintaining quality of care.

Once upon a time, when I first entered into the healthcare supply chain, value analysis teams were used primarily as cost management programs to reduce costs. This should be the goal once again. Use things like utilization management to funnel the proven savings opportunities to your VA teams and let them work through the VA process to drive out the savings.

Time Is Money

If you are working on a $220K or a $342K annual savings opportunity but you take six months to find solutions and implement them, then you just burned $110K and $171K worth of valuable dollars. Yes, you have to take some time to perform value analysis but the more efficient you are, the more you will save. Speed to savings is a reality. The faster and better you can accomplish savings, the faster you can aid your organization’s bottom line.

Where is the Low-Hanging Fruit?

We have been through the gauntlet of price savings over the past 10-15 years and are now at the point where it is extremely challenging to gain in an area that has had substantial increases over the past few years. That does not mean that there are still not big savings sitting right there in your supply chain ready to be acted on by your value analysis teams. The big dollars are more than likely invisible to you because they are not price but waste, inefficient use, featurerich products, and value mismatches. You need to see all of your opportunities now.

Clinical Supply Utilization is the Perfect Tool to Fill Your Value Analysis Savings Pipeline

There is no better way to see the invisible savings beyond price than clinical supply utilization volume-centric comparable metrics and reporting. You are flying blind without this type of system to point you in the right direction as overall spend is not an indicator of any true change and your department heads and clinicians can talk you away. You need proof, and the proof that they are running over in multiple key performance indicators will give you the power to allow your value analysis teams to perform the much-needed savings studies.

Are You Ready?

You can go ahead and tell me today that you are ready for this challenge of taking your value analysis program to be the savings led program for your organization, but words only go so far. You need to have all of the key elements in place and people who understand the next level. Take the time to plan out your value analysis led savings program and make sure you are not working with both hands tied behind your back with little or no tools or training for you and your teams. Yes, you can change the focus on any VA team and get some results, but you won’t move the needle much without putting all of your major savings opportunities into your VA savings pipeline.

“The big dollars are more than likely invisible to you because they are not price but waste, inefficient use, featurerich products, and value mismatches.”

STAY CONNECTED HERE

Are You Ready to Join an Elite Group of Value Analysis Professionals?

DONA, FAAPM, FNAP, FACHE, FSHEA, FIDSA

The Association of Healthcare Value Analysis Professionals (AHVAP) has come a long way from it’ s grassroots start in the healthcare supply chain world. Started by a group of like-minded clinicians and professionals who were looking to band together to share knowledge, best practices, and improve the overall patient outcomes driven by value analysis concepts and methods, this unique group managed to start their own association in the early 2000s and we are glad to report that it is flourishing.

AHVAP is Moving the Needle

AHVAP is still moving the needle in the next generation of value analysis education, best practices, and furthering the influence and importance of value analysis professionals at all levels of the healthcare supply chain. AHVAP offers industry standard certification for value analysis and supply

J. Hudson Garrett Jr., Ph.D., MSN, MPH, MBA, FNP-BC, IP-BC, PLNC, VA-BC, BCMSLcert™, MSL-BC, CPHRM, LTC-CIP, CPPS, CPHQ, CVAHPTM, CMRP, CPXP, CDIPC, FAC-

AHVAP Garrett and Niven

chain professionals as well as additional opportunities for advanced education for our members, like micro-certifications and ongoing monthly training programs. AHVAP’s goal is to enable each and every value analysis professional to become an elite value analysis practitioner without having to go through the school of hard knocks which many have gone through over the years.

AHVAP Now Has Their Own Certification Organization

One of the biggest challenges for clinicians and other value analysis professionals has been getting the continuing education credits not only for AHVAP certification but also CEU credits for nursing and other clinical specialties when an AHVAP sponsored educational program qualifies. Now, AHVAP has taken a major step forward and created our own separate accreditation organization to solve this problem once and for all but with the high level of quality and integrity you would expect. AHVAP also has systems to track these CEU credits automatically if you so choose.

Fast-Track Your Results

AHVAP has rolled out a new website which includes improved forums, resources, tools, on-demand video training, and ongoing updates of what is new and exciting in the value analysis world. The goal is to allow each and every member the ability to navigate their unique world within AHVAP’s website and resources to back them and their organizations up in the ever challenging and complex world we call value analysis.

Where Are You in the Value Analysis Continuum?

It does not matter where you are in the value analysis continuum, AHVAP has everything from beginner to intermediate to advanced level practitioner programs as well as a newly added Fellowship program. There is something for everyone to not only learn and share best practices but also to collaborate with your peers to make patient cost, quality, and outcomes thrive for years to come. Are you ready to join this elite group?

Dr. Garrett is the Executive Director and Executive Vice President for the Association of Healthcare Value Analysis Professionals (AHVAP) and an Adjunct Assistant Professor of Medicine in the Division of Infectious Diseases at the University of Louisville School of Medicine.

Karen Niven is the Senior Director of Clinical Value Analysis at Premier, Inc. and serves as the President-Elect for the Association of Healthcare Value Analysis Professionals (AHVAP).

Duvera Solutions Group

How Should KPIs Be Employed to Increase Your Healthcare Organization’s Non-Salary Savings, Quality, and Outcomes?

Robert T. Yokl, President/CEO, SVAH Solutions

Targeted Savings While Improving Quality and Outcomes Can Be a Reality

We are all looking for the “magic bullet” that will generate more non-salary savings for our healthcare organization while improving quality and outcomes. The answer is quite simply key performance indicators (KPI), or a quantitative measure used to identify savings, quality, and better outcome opportunities that are hidden from our view. However, before you can make this happen you need your key performance indicators to be:

Specific: Always identify the specific activity you want to measure vs. a general description, e.g., orthopedic bone cement/orthopedic cases, instrument repair expense/surgical procedures, or postage per adjusted patient days.

Measurable: You must make sure that you are employing a metric that can be compared to other healthcare organizations with the same or similar operating characteristics. Therefore, your KPI must be consistent with industry standards, such as linen pounds processed per patient day. Otherwise, you won’t be able to measure apples to apples.

Time-Based: We would also like to have a database of at least one quarter of historical data (one year is even better). Since things change and people change over time, you want to make sure your data is current.

Relevant: Is it truly a savings or is it a onetime event? Is it caused by faulty data? It is due to changes in policy or procedure? Is the process an outlier? For one hospital we worked with, we identified savings in their disposable bath kits only to find out that they had only one shower per floor, thereby necessitating the use of multiple disposable bath kits daily for patient baths.

Attainable: Even though you might have identified a non-labor savings utilizing KPIs, you must ask the question, is the savings obtainable? For example, if your linen/laundry contract isn’t up for two years, can you renegotiate your contract at this time? Be realistic about your savings goals!

Identifying new savings, better quality, or better outcomes requires operational excellence of the highest order. The only way to reach this goal is to target your savings, quality, and outcomes with advanced tools and techniques that include key performance indicators to measure, monitor, and control your non-labor expense forevermore.

Featured Article

Value Analysis Roundtable Discussion: Clinical Supply Utilization Opening Up Invisible Supply and Quality Optimization Opportunities

Five Leading Value Analysis and Clinical Supply Utilization Experts Share Their Insights, Strategies, and Best Practices on Clinical Supply Utilization

Robert W. Yokl, Sr. VP, Supply Chain & Value Analysis Solutions, SVAH Solutions

Robert has over 31 years of experience in the healthcare supply chain and leads the SVAH Solutions team in day-to-day operations on various clinical supply utilization, value analysis, and savings validation solutions. Robert has worked with over 385 hospitals, IDNs, and health systems throughout his career and has engaged in value analysis and supply utilization at every level in a healthcare organization.

Robert W. is the co-author of Healthcare Supply Utilization Revolution – The Future of Supply Chain Management and the Managing Editor and continuing article contributor for Healthcare Value Analysis & Utilization Management Magazine. He is also the chief software architect for SVAH with many value analysis, benchmarking, supply utilization, supply validation, and purchased services solutions in production.

Anne Marie Orlando, RN, MBA, RCIS, CVAHP, Senior Director, Clinical Programs at Blue.Point Supply Chain Solutions; Treasurer, Association of Healthcare Value Analysis Professionals

Anne Marie has been a critical care nurse for over 19 years with a leadership foundation in the Interventional Cardiology and Interventional Radiology space. During her supply chain tenure, Anne Marie held a dual role of Supply Chain and Clinical Resource Director where she operationalized many clinical initiatives while maintaining fiscal accountability. At the GPO level, Anne Marie served as the Director of Clinical Services for Yankee Alliance supporting member value analysis teams and their work with clinical utilization. Anne Marie is currently the Senior Director, Clinical Programs for Blue.Point Supply Chain Solutions supporting value analysis teams in the use of the Blue.Point platform focusing on aligning product utilization and standardization with evidence-based practice.

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Shaneka

Demps, RN, BSN, MHSc, CIC, CVAHP, Manager, Value Analysis, BayCare Health System

Shaneka Demps is a clinician with vast expertise in healthcare including critical care nursing, value analysis, infection prevention, contract negotiation, data analytics, quality improvement, and numerous scientific abstract/poster presentations and publications. Shaneka takes a multifaceted approach with healthcare advocacy, awareness, and promotion, with the goals of improving the quality of healthcare, decreasing associated costs, and promoting health.

Tracey Chadwell BSN, RN, CVAHP, HACP, Value Analysis

Recall Management Advisor and Owner, TACH Consulting

Tracey has 30 years of clinical and supply chain experience driving clinical and operational performance improvement, demonstrating significant returns on investment through clinical utilization management of resources and operational cost savings. Her experience covers aspects of supply chain including data analytics, operational efficiencies, internal and external customer relations, GPOs and contracting, and consulting in these areas. Her experience in value analysis includes leading a program, developing or refining existing programs, and implementing millions of dollars in savings through various healthcare organizations. This included operational and clinical process improvement programs which contributed to cost savings in both labor and non-labor expenses.

Tracey has also been active with state healthcare organizations in all classes of trade, providing educational presentations and advisory services. She has appeared on several podcasts, such as Power Supply and The ASC Podcast as well as several industry blogs. She is a member of the Association for Healthcare Resource and Materials Management (AHRMM) and the Association of Value Analysis Professionals (AHVAP).

Andrew Kaiser, RRT, MBA, CVAHP, System Director, Clinical Quality Value Analysis, UW Health

Andrew Kaiser has over 13 years of experience in value analysis and currently serves as the CQVA Director within the Supply Chain Department at UW Health in Madison, Wisconsin where he partnered with clinicians across the enterprise to transform the Clinical Quality Value Analysis program into a fully integrated clinical service line that prioritizes patients into their decision-making matrix. Andrew’s past work experiences include serving as a Value Analysis Director, Clinical Operations Manager, Business Operations Manager, and Contracting/Implementation leader. Prior to his work in supply chain leadership, Andrew worked as a registered respiratory therapist and ECMO specialist.

Andrew is a member of AHVAP, NBRC, ACHE and has been involved in many AHVAP planning committees. He is also actively engaged in the alumni board for Viterbo University and currently serves on behalf of the engagement committee. He is currently working toward his fellowship status with ACHE and is running for board president of the Viterbo Alumni Association. In his down time, Andrew enjoys singing with the Madison Opera Company and spending time with his 4 dogs!

Featured Article

We are all looking for new supply chain expense savings beyondpriceandstandardization to help our healthcare organizations weather this perfect storm (high inflation, high labor costs, and shrinking bottom line) we all are experiencing. With this in mind, Healthcare Value Analysis & Utilization Management Magazine asked five experts their views on Clinical Supply Utilization Management as one solution to generating more savings.

HVAUMM: What exactly is Clinical Supply UtilizationManagement?

R. Yokl - The old adage that (the) supply chain’ s job is to deliver the right product at the right price at the right time to the right place has been a stalwart in our industry but there is more to managing the overall total cost of supplies and purchased services. How much we consume will have a greater effect than any price or standardization initiative. The selection of the exact requirements of the products that we buy is also critical because if we overshoot, we have feature-rich costlier products that needlessly increase costs. If we undershoot the requirements of our customers, then we have them using two or three products per instance when they should have only used one or two. The bottom line is that these are invisible to supply chain (professionals) right now in the price world.

Clinical supply utilization management (CSUM) allows supply chain and value analysis leaders to see invisible savings opportunities with the use of patient volume centric metrics comparing key performance indicators and cohort benchmarks. CSUM hierarchical systems then allow supply/ value chain to strategically target the best opportunities that can result in up to 7% to 15% in overall budget savings.

A. Kaiser - This is a great question, and it depends on who you ask. Hospital-based, clinical quality value analysis (CQVA) professionals who work with a team of value analysis (VA) coordinators and committees define it as:

Defining CSUM in the Eyes of Andrew Kaiser’sVALeadersatUWHealth:

“Quantifying the use of a product or service,” Amanda Hasburgh, Surgical Tech, Anesthesia/ RT/New Technology CQVA Coordinator, UW Health

“How products are used to fill a clinical need, by who, where and how often,” Melissa Meister, RN,Med/SurgCQVACoordinator,UWHealth

“

Amount of time a product is used for a clinical application. It could be used to show the variance of products within the same specialty,” Sarah Richards, RN, Surgical CQVA Coordinator,UWHealth

As clinical supply utilization becomes more patient-focused, our work encapsulates clinical practice standardization. Clinical supply utilization management is dependent on the culture of an organization. We, at UW Health, are currently building dashboards to demonstrate the monthly utilization of key initiatives within clinician utilization to help identify variances as well as compliance. Clinical utilization is all-encompassing for anyone utilizing a product to care for our patient populations.

A. Orlando - At its core, clinical supply utilization management is a concept that centers around aligning the right product for the right

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patient. Of course, this is a very simplistic view, but the conceptual foundation rings true. I equate it to a 360° review of the products used. This includes elements such as standardization, evidence-based decision-making, vendor and contract management, education and training, and continuous improvement. The overarching goal is to ensure the right supplies are used efficiently and effectively to provide high-quality patient care while minimizing waste and unnecessary costs.

T. Chadwell - In a nutshell, CSUM is the appropriate product with the appropriate functionality used on the appropriate patient at the appropriate time. The concept involves making sure there is not over utilization, misalignment, or inefficient use or value mismatches. Additional objectives would be the pursuit of appropriate standardization and waste reduction.

HVAUMM: Why have we taken so long to recognize Clinical Supply Utilization as a highly useful tool/strategy to take our organizations to new levels of value analysis, cost optimization, and quality success?

S. Demps - CSUM, in my opinion, is the continuous assessment and management of supply usage and clinical criterion. We’ve become great at cost savings using historical utilization figures and contract renewal strategic savings, but now is the time that we strengthen the focus on eliminating waste, removing inappropriate utilization, and stratifying outcome improvement which may lead to a specific subset of patients that may benefit from the use of a superior product choice. The best way to think of CSUM is that not all patients require the ‘Rolls Royce’ for great clinical outcomes and superior quality care the ‘Honda’ will work for the majority. Creating, advocating, and managing the selection criteria for when/where/who the ‘Rolls Royce’ product will be utilized is where you will find the greatest reduction of waste and cost reduction potential…CSUM.

R. Yokl - There is a matter of maturity of the healthcare supply chain, and value analysis programs within healthcare organizations have come to the point where they have driven out all major savings in pricing and standardization. Thus, the normal next level of savings is to attack what we call savings beyond price which is CSUM. It is part of the evolution of the supply chain program and maturity of value analysis to be the action tool to drive out the savings once they are found through your CSUM reporting tools.

A. Kaiser - I think there are two major components to this: Data management and the approach to change management with your clinicians. They both relate to the culture of the organization. I work and assist our CQVA team in compiling the data across five facilities and three enterprise resource planning systems that have different approaches to clinical documentation. Understanding a baseline and then operationalizing key metrics in that baseline is very challenging when the data is coming from multiple sources with different fields. And as we

“Now is the time that we strengthen the focus on eliminating waste, removing inappropriate utilization, and stratifying outcome improvement.” S. Demps

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know, healthcare is becoming the “melting pot” of integrated delivery networks, so we see more and more of these systems having significant variations in their clinical and business practices.

Change management refers to the desire to shift how people think or approach a topic. People often think clinical supply utilization can be done overnight, but this mindset shift can often take years to become rooted in business and clinical application. Change management is done best in small tests of change through data sharing, and the “ask offer ask” methodology, helping people see benchmarking (cost and utilization) of their peers at the same organization but also across the region at comparable organizations.

to adopt a comprehensive approach, considering factors such as product quality, clinical outcomes, patient safety, and satisfaction of both patients and clinicians. The emphasis shifted from isolated cost-driven decisions to a holistic view that emphasized optimizing patient care and clinical outcomes through better supply selection.

S. Demps - I believe we have always known the concept of CSUM, but the conversation requires high level clinical engagement components inclusive of risk stratification, when it comes to supplies, at the highest level of the value analysis structure, physician-driven service line committee and/or C-suite. At the root of each product must be an agreement amongst your key stakeholders regarding supply efficacy, differences, and the potential of similar case use. This is tough in many IDNs purely based on strong clinical preferences, even with commodity items. It was not until we were ready to have those pressing but necessary conversations that we poised for a new concept which at the root is in many ways avoiding waste.

A. Orlando - Historically, supply chains were very transactional and siloed from the clinical areas. Purchases were driven by cost and contracts, not always quality and outcomes. The value analysis process was in its infancy and clinicians often did not have a seat at the table. This all changed with value-based purchasing and subsequent hospital acquired conditions (HAC) scores. This program and its associated performance-based penalties incentivize hospitals to prioritize patient safety to deliver high-quality care. Consequently, this alignment catalyzed the advancement of clinical supply utilization. Hospitals could no longer solely rely on price or contractual considerations when selecting products. Instead, they were compelled

T. Chadwell - The continual changes in reimbursement have driven organizations to seek out more opportunities to streamline expenses, putting supply chain and clinical value analysis activities at the forefront. Focus had been on purchase price and standardization for a long time. Lack of actionable data has hindered deeper dives, and healthcare organizations have been slow to put resources into data collection and interfacing disparate data sources. Data on the clinical and operational impacts was not readily available to the supply chain. Organizations are now starting to recognize and acknowledge the weighty impact that value analysis, and by extension, clinical supply utilization can have on the operational and financial success of a

“The emphasis has shifted from isolated cost-driven decisions to a holistic view.” A. Orlando

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healthcare organization. As clinical integration into value analysis has been embraced by many healthcare organizations, the scope of value analysis team initiatives has also shifted to include clinical as well as financial outcomes in their decision making.

HVAUMM: What are some things that Healthcare Supply Chain Leaders and their C-Suite should know about Clinical Supply Utilization that they may not know orbelievetoday?

R. Yokl - We have been studying and tracking clinical supply utilization savings for over two decades now and have found that there is still 7% to 15% in overall supply chain savings available to healthcare organizations. Getting a better price cannot fix the fact that three of the hospitals in your health system are consuming more PICC lines than the rest of the seven hospitals. You must have CSUM.

A. Kaiser - Clinical supply utilization isn’t just a process done by clinical quality value analysis. It is a collaborative and cross functional approach to manage data, monitor for trends, and collaborate to understand the variations in the data to ensure we understand any differences we may see in purchasing, logistics, distribution, and most importantly the actual clinical utilization.

A. Orlando - Clinical supply utilization and evidence-based decision-making are not mutually exclusive. They, indeed, are symbiotic. It is essential to dispel the misconception that clinical supply utilization solely involves opting for the cheapest options. On the contrary, evidencebased decision-making plays a pivotal role in clinical supply utilization and guides supply selection to ensure that the chosen supplies align with patient needs and outcomes.

S. Demps - I believe that each Supply Chain Leader and C-suite should know that CSUM is necessary. Period! Regardless of how well we believe that we are doing, utilization practices have vast variation across enterprises which will continue to bleed unless managed closely as a collaboration. Our team scans usage patterns quarterly and engages projects with the key stakeholders as necessary to bring awareness to the dichotomy on a timely basis.

T. Chadwell - The investment in managing clinical supply utilization can pay for itself over time, and its impacts go far beyond the supply chain. Standardization of products and procedures/processes reduces variation, which in turn, reduces opportunities for the introduction of errors. It makes staff training and cross training easier, especially now that the use of travelers and PRN staff has increased. In some cases, it can lead to increased income and improved margins when the efficiencies free up OR or procedural time and other resources. Supply SKUs and inventory expenses are reduced, which can improve the organization’ s balance sheet. Improved staff and customer satisfaction can result when clinical supply utilization is optimized.

HVAUMM: Adding a new modality to a value analysis program can sound daunting at this point. How can it make value analysis and supply chain professionals’ jobseasier?

“The investment in managing clinical supply utilization can pay for itself over time, and its impacts go far beyond the supply chain.” T. Chadwell

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R. Yokl - Setting up a CSUM system will start the funnel and make the saving come to you as a supply/value chain professional instead of endlessly chasing savings that may or may not be there. If the savings come to you and you get to control which projects and how you want the savings addressed, then this is a major plus. You will need to set the expectation that you will be starting out slow and handling 3-5 utilization opportunities at a time and then as those are implemented you will bring on more.

You must start to make room on your (VA) agendas for these 3-5 areas and must also ask your value analysis team members to step up and assist you as customers, stakeholders, and experts to drive out the savings. It would not hurt to give them a little training in this advanced area of savings beyond price which will make your job and theirs much easier.

Analysis Professionals (AHVAP) resource page, that can help guide some of these discussions and assist with this process. Regardless of conducting a formalized gap analysis, both value analysis and/or supply chain should implement programs that address their pain points and effortlessly fill in any process gaps that exist. Having a clear understanding of how these modalities integrate into their current program facilitates smooth implementation. It minimizes potential redundancies, thus alleviating the workload for the value analysis and/or supply chain professional.

A. Kaiser - Anytime we add in a new modality within value analysis, we need to determine if it will add value to the program. Clinical supply utilization can only enhance the process by enabling the users to pivot much more readily, with less variation at the bedside, with fewer category management engagements by clinicians and experts. It can also make the value analysis of a professional’s jobs easier by having a reduction in variation and therefore a reduction in backorders and quality concerns.

A. Orlando - Before implementing any new modality, value analysis and supply chain must take an introspective look into their specific value analysis program and understand current existing gaps. Many tools are available, including those on the Association of Healthcare Value

S. Demps - Eventually, clearly understanding utilization and setting expectations will make everyone ’s life easier by removing guesswork surrounding usage. We created a utilization project around something as simple as dry wipes. We identified that these 100-count pack of wipes were taken into patient rooms, and therefore would have to be discarded at the patient’ s discharge or given to the patient. Instead of changing the item, we went to the vendor and explored changing the count of the item in the pack. The vendor created a 25-count pack wipe for us which allowed us to stop throwing out all of the unused wipes! This was not only a cost savings but a landfill avoidance for us; a win-win which did not change our clinicians’ practice and kept us compliant with regulatory guidelines.

T. Chadwell - Reduction in the number of individual SKUs reduces the workload on all supply chain staff. Less inventory to manage and shipments to receive can free staff up to take care of more patient-oriented tasks. With each successful project, the value analysis team demonstrates its significance to the organization’s mission. As variation is reduced and appropriate utilization is enhanced, strategic sourcing becomes possible. Decisions are based on clinical evidence, best practices, and objective financial data, making value analysis projects more streamlined and decision-making more efficient.

“Clinical supply utilization can reduce variation, backorders, and quality concerns.” A. Kaiser

8 New Rules for New Work and New Performance

Robert T. Yokl, President/CEO, SVAH Solutions

Value Analysis Teams Need to be Designed to Be Effective and Productive

There has been enough empirical data and research generated by team performance practitioners to clearly recognize that high performance value analysis teams, or any teamwork for that matter, does not just happen. It must be designed into a team’s framework to be successful. It all starts with eight new rules for new work as follows:

Rule #1: Teams must have clear goals, clear rules, and a defined process. This starts with establishing annual goals and objectives (savings, quality, and outcomes) to guide your VA team(s), along with rules of engagement and a defined value analysis process (similar to our Value Analysis Funneling ™ process.)

Rule #2: Teams must have a charter to define their scope and boundaries. Although team charters can change depending on the VA project, they all describe the mission and objectives, roles and responsibilities, scope, and milestones.

Rule #3: Team members must be given the time necessary to complete assignments. If there is a conflict due to time restraints between a team member’s job and their teamwork, then your VA Steering Committee needs to provide the necessary resources to assist the team members to complete their assignment(s).

Rule #4: Timetables for completion of value analysis studies must be strictly adhered to. VA projects shouldn’t be open ended. They need to have a completion date. We recommend 90

Value Analysis 101

days. Thereafter, if not completed on time, your VA Steering Committee will need to review the project and approve a 90-day extension.

Rule #5: Team performance must be evaluated holistically. If one member fails the team, this must reflect on his or her overall performance evaluation. If a team member becomes uncooperative, unresponsive, or indifferent, they should be retired from your VA team.

Rule #6: If there is a conflict (time, change in responsibilities, workload, etc.) with team leaders or members, they must be resolved quickly by your Value Analysis Steering Committee. Otherwise, these problems will fester and become obstacles to your team’ s success.

Rule#7:360-degreeevaluationmustbeutilizedto rate team performance. It isn’t good enough to just survey your customers on your VA team’s performance. You also need to have them rated by their peers, vendors, and supervisors.

Rule #8: Must reward, recognize, and compensate teams for their performance. One of the smartest things a healthcare organization can do is link recognition to team performance, since employees expect it, focus on it, and are motivated by it. The rule of thumb is to recognize efforts and activities that exceed expectations by giving non-cash awards. To get results, pay cash!

To summarize, it has been mistakenly believed that if management focuses their efforts on the human relations side of team dynamics or soft skills (cooperation, trust, conflict resolution etc.) this would lead to team success. It has now been carefully documented that these human relation issues will take care of themselves over time. You cannot force them on a team. They will develop over time as the team members work together. On the other hand, to truly have high-performance VA teams, management must quickly focus their efforts on performance elements, such as outlined above, which are measurable, recognizable, and manageable. Focusing on both human relations and performance elements will ensure that you are creating high-performance value analysis teams.

AI and Value Analysis: A Natural Fit

Robert T. Yokl, President/CEO, SVAH Solutions

Embracing the Power of AI to Power Your Savings, Quality, and Outcomes

By now, I’m sure you have heard the debate over artificial intelligence (AI). Whether you consider it your friend or your enemy, the reality is that it will generate data analytics to power your savings, quality, and outcomes in the very near future.

“These supply chain decisions will also be much smarter. Advanced analytics and modeling will help decision makers evaluate alternatives against an incredibly complex and dynamic set of risks and constraints. And smarter systems will even make decisions automatically – increasing responsiveness and limiting the need for human intervention.”

“AI is becoming essential to innovative supply chain transformation. Forty-six percent of supply chain executives anticipate that AI/cognitive computing and cloud applications will be their greatest areas of investment in digital operations over the next three years.”

Adapt To The New Paradigm That’s Becoming A Reality

“Adaptive robotics act on Internet of Things (IoT) device information and a multitude of structured and unstructured data to learn and make autonomous decisions. Natural language processing (NLP) tools can understand human speech and react to what they are being told. Predictive analytics are being applied to demand responsiveness, inventory and network optimization, preventative maintenance and digital manufacturing. Search and pattern recognition algorithms – which are no longer just predictive, but hierarchical – analyze real-time data, helping supply chains to react to machine-generated, augmented intelligence, while providing instant visibility and transparency.”

For example, you will be able to generate a report to identify all of your healthcare organization’ s commodities in which their usage is excessive compared to your cohort group with the same or similar operating characteristics, or those that appear to have quality or safety issues before they become recognizable to the naked eye. This will be a real boost for value analysis practitioners who don’t have the time to generate this information with their limited staff.

Embrace This New AI Technology To Get Better Than Just Good

Larry Page predicts that, “Artificial intelligence would be the ultimate version of Google. The ultimate search engine that would understand everything on the web. It would understand exactly what you wanted, and it would give you the right thing. We’re nowhere near doing that now. However, we can get incrementally closer to that, and that is basically what we work on.”

AI will be one of the answers for value analysis practitioners to save time while improving savings, quality, and outcomes because it enables the execution of complex tasks without excessive cost. Imagine a system that manages recurring tasks, has no human errors, quicker decision making, unbiased decisions, operates 24/7 without human intervention, and augments the capabilities of your limited staff. Best of all, AI isn’t a theory but a certainty that will become incrementally better over time.

Source: Karen Butner, Global Research Leader, Automation, Supply Chain, Virtual Enterprise, IBM Institute for Business Value

Finally, A Proven System

That Engages Clinical Department Leaders to Save Money in Supply Utilization

Why Do Clinical Departments Need More Proof Than Just Total Spend?

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 Adverse

Clinical departments are not cost management adverse. 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.

Only Clinical Departments Can Control Their Clinical Departmental Supply Utilization

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 department 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

• No More Pushback from Nursing or Clinical Departments on Savings

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

Sign Up for A FREE Test Drive Today of the Clinical Department Utilization System www.ClinicalSupplyUtilization.com