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Healthcare
Magazine
Leading Cost and Quality Strategies for the Healthcare Supply Chain
Featured Article:
Blood Gas Analyzer Changeover Helps Improve Quality of Care and Workflow at a Large Urban Respiratory Care Center
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Drills Down from 30,000 Feet to SKU Level Pinpoints Exact Departments Who Waste Provides Trending Graphics & Charts Provides Year-Over-Year Trends
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Contents
Healthcare Value Analysis & Utilization Management Magazine
4 FROM THE PUBLISHER’S DESK By Robert T. Yokl
Are You Attacking Your Value Mismatches to Achieve Even Greater Savings?
Healthcare Value Analysis & Utilization Management Magazine is published Bi-monthly by SVAH Solutions®
6 FROM THE MANAGING
P.O. Box 939, Skippack, Pa 19474
EDITOR’S DESK
Phone: 800-220-4274
By Robert W. Yokl
FAX: 610-489-1073
Rapid Cost Optimization is the Next Generation of Big Savings with a Lot Less Work
bobpres@ValueAnalysisMagazine.com
www.ValueAnalysisMagazine.com ————————————
Editorial Staff
8 FEATURED ARTICLE By Shelly Brown, Candi Curtis, Niccolo Dosto, and Halit O. Yapici
Blood Gas Analyzer Changeover Helps Improve Quality of Care and Workflow at a Large Urban Respiratory Care Center
Publisher Robert T. Yokl bobpres@ValueAnalysisMagazine.com
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18 VALUE ANALYSIS 101
Managing Editor
By Robert T. Yokl
Value Analysis Team Selection
Robert W. Yokl ryokl@ValueAnalysisMagazine.com
24 UTILIZATION MANAGEMENT
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By Robert T. Yokl
Clinical Supply Utilization Management: It’s Easy with the Right Analytics
Senior Editor Patricia A. Yokl ————————————
28 CLINICAL INTEGRATION
Editor and Graphic Design
By Robert W. Yokl
Clinical Integration for Your Value Analysis Program and Supply Chain
31 BENCHMARKING By Robert T. Yokl
Benchmarking is Essential for Your VA & UM Success
34 PERSPECTIVE By Robert T. Yokl
Value Analysis Software Makes Your Job Easier
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Danielle K. Miller
Copyright 2022 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 E-Mail: ryokl@valueanalysismagazine.com for approval to reprint, excerpt, or translate articles. 3
From the Publisher's Desk Are You Attacking Your Value Mismatches to Achieve Even Greater Savings? Robert T. Yokl
One little-known secret in value analysis is that there are more savings to be achieved by identifying your value mismatches (i.e., lower cost alternatives available, but not employed) than in lowering your purchase cost. This is because a value mismatch is equivalent to throwing away money that isn’t needed to perform a desired function. A product, service, or technology’s functions (primary, secondary, and aesthetic) can be defined with an adjective, verb, and/or noun. For instance, the primary function of a vacuum cleaner is to DEEP CLEAN, otherwise it would be useless. A quick Google search shows that a vacuum cleaner’s price range is $125.00 for a lightweight Oreck to $1,225 for a heavy-duty Kirby. Which one do you select as the best value? Well, it comes down to which one meets your customers’ functional requirements reliably. My mother-in-law decided on an Oreck as the best value since her required secondary function was that her vacuum be lightweight. Best value is always in the eye of the beholder or customer, not what you think is best for them. However, it’s your job to help them select the best value products, services, and technologies by performing a functional analysis with them. This naturally leads us to the question, how do you perform a functional analysis? This is accomplished with a series of questions that your customer can answer about the product, service, or technology they desire: •
What is the primary function (or reason for being) that you desire the new product, service, or technology to do?
•
What are the secondary functions (in addition to the primary function, what else do you need) your new product, service, or technology is expected to do?
•
What are the aesthetic functions (nice, but not functionally required, like color, shape, texture, etc.)?
These questions should be the starting point for every request for a new product, service, or technology vs. accepting a brand, catalog number, and description of the commodity that your customer desires. By answering these questions, you can avoid hundreds of costly value mismatches like those that are now in your supply streams.
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From the Managing Editor’s Desk
Rapid Cost Optimization is the Next Generation of Big Savings with a Lot Less Work By Robert W. Yokl, Sr. VP, Supply Chain & Value Analysis — SVAH Solutions Let’s face it, with all the major effort that it takes your supply chain team to manage the group purchasing and contracting process, not to mention the new product request value analysis process, it is no wonder that any further cost management initiatives will be easily ignored. The big issue here is that this is not enough for your CFO because they are dealing with the fallout from the pandemic market conditions as well as all the other cost overruns due to product availability issues and vendor cost increases. This is a perplexing challenge for supply chain leaders as many report directly to their CFO, yet you know the toll that the pandemic has taken on your supply chain team. What is a happy medium that can give the CFO what they want and make it easier on your supply chain team?
There are Still More Savings to Keep Your CFO Happy for Years The good news is that there are plenty of new and robust savings beyond the savings you get from contract pricing and standardization programs. This new savings will even make up for inflation and will more than pay for the new product requests that increase supply chain’s annual budget costs by as much as 1% to 2% annually. Our firm has been tracking and trending savings opportunities beyond price for the past 15 years and we have found that the savings is as high as 7% to 15% in annual supply budget. This is on top of the contract price savings you are currently getting.
How Do You Finally Achieve the Next Level of Big Savings? Believe it or not, there are still a lot of low-hanging fruit left in the healthcare supply chain, but most are not seeing these savings because they don’t have any rapid cost optimization systems in place to show them where the savings are. If you knew where the big savings were you could do something about it, but not knowing just leaves potential harm to your bottom line. I am not talking about where you can get a better price or standardize on a contract here or there; those are price related savings. The reality is that price savings are small potatoes in the big picture.
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From the Managing Editor’s Desk
Robert W. Yokl
Next Level Savings Requires Looking at the Total Cost On a recent rapid cost optimization call, I was talking to a supply chain leader about the total cost of supply throughout the hospital system on a product that was coming up for contract renewal. Interestingly, he did not know what the cost was for this product which was a simple commodity that all organizations use. Because we track that product for them, we were able to show them their total cost of this supply throughout their organization. We showed them not just the total spend, but correlated this to the specific volume metric at each hospital in their system. I shared the report with him that quickly showed him who his best hospitals were with total cost of use of the product and who his worst performers were. We even showed him comparable benchmark ranges for where his hospitals should be to garner the most savings out of that category.
Supply Chain Could Knock Out Any Big Savings Knowing where you are and what best practices are within your organization, plus where your benchmark comparables are taking savings to new levels, don’t you think value analysis and supply chain teams can rapidly effect cost optimization? Of course they can! Remember, sometimes we need to ask the end users to correct wasteful or inefficient use of the products or train them to use it better. But to do this, you must show proof to the department heads and managers so they can self correct their use patterns. By the way, this is a much easier and more rapid way of optimizing costs than to try to find a lower priced product alternative and make changes only in the hope of savings occurring, all while chewing up precious time and human capital of your supply chain and value analysis teams.
Rapid Cost Optimization Saves Time and Brings Major Results The name of the game is to start looking at your supply chain in terms of total cost of products, services, and technologies compared to a volume-based metric (cost per square foot, surgical cases, patient days, lab tests, cath lab cases, etc.) instead of just the price. I must admit, most times, given the committed volume aspects of group purchasing and custom contracting in today’s marketplace, I don’t care what price my hospital health systems are paying because I know I can find bigger savings within their current contracts. If you want to effect a whole new level of savings, you need to think differently and take the next step to look at the total cost of the products, services, and technologies that you buy. My health system clients have come to rely on the next level of savings that we bring to them on an ongoing basis, and best of all, this does not interfere with their contracting programs. If anything, it helps them be more strategic as to the tactics they want to employ to bring about this next level of savings. Let’s make your supply chain more dynamic and start to look at the total cost of your products and where you can rapidly optimize costs for your CFO. I guarantee you, once you go down this road you will exceed your savings goals and objectives for a minimum of the next three to five years!
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Featured Article Blood Gas Analyzer Changeover Helps Improve Quality of Care and Workflow at a Large Urban Respiratory Care Center Shelly Brown, MBA, RRT-NPS, NCTTP, Baptist Health Medical Center Candi Curtis, BS, RRT, Baptist Health Medical Center Niccolo Dosto, MHS, Boston Strategic Partners Halit O. Yapici, MD, MBA, MPH, Boston Strategic Partners
Background Critical care settings such as respiratory centers and trauma wards often rely on quick, accurate tools to help providers make appropriate clinical decisions. Blood gas analyzers are essential in high-volume medical units since they rapidly measure key parameters, including carbon dioxide, oxygen, acidity, and multiple metabolites/electrolytes (e.g., glucose, calcium,and potassium)1. These measurements give clinicians crucial data for diagnosis and treatment. For instance, combinations of blood gas, pH, electrolyte, and metabolite readings are used in respiratory centers to evaluate oxygen delivery efficiency and the presence of a respiratory, metabolic, or kidney disorder1. Laboratory assays have long been considered the gold standard for blood gas analysis. However, core lab equipment is often bulky and takes longer to provide results due to transport time associated with moving samples from medical units to the lab. Handheld and benchtop point-of-care (POC) devices have thus been developed to analyze samples on-site in various medical settings for rapid management and treatment of patients2. The accuracy of POC analyzers is comparable to standard hospital lab equipment. A cross-sectional study comparing arterial blood readings from lab assays and a handheld POC device found statistically similar results when testing for pH, oxygen, carbon dioxide, and lactate levels3. Modern POC devices can also perform oximetric analyses and detect carboxyhemoglobin and total hemoglobin concentrations2. POC devices are commonly used in fast-paced clinical settings, making them particularly prone to testing errors that lead to adverse patient outcomes4. Blood gas analysis requires an invasive procedure to obtain arterial blood; thus, the need for additional needle sticks can be highly unpleasant for the patient and should be avoided. The effect is more severe for older patients or
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Featured Article patients with difficult venous access who must undergo numerous blood draws5. Neonates may also suffer from anemia caused by frequent blood draws because of their relatively low total blood volume6. Therefore, the ideal POC device should be precise and reliable while requiring a minimal amount of sample volume and needle sticks to deliver high-quality patient care7.
The Baptist Health System Baptist Health is Arkansas’ most comprehensive The ideal POC device should be healthcare system, spanning 250 points of access precise and reliable while that include 11 hospitals, multiple urgent care centers, a senior living community, and over 100 requiring a minimal amount primary and specialty care facilities all over of sample volume and needle Arkansas and Eastern Oklahoma. The system has sticks to deliver high- quality six main campuses, the largest of which is in the patient care. heart of Little Rock, supported by satellite clinics scattered throughout the state8. With about 11,000 employees serving several thousand more patients annually, it is essential that Baptist Health maintain a modern arsenal of medical equipment to ensure efficient workflows, especially in its critical care units.
A Catalyst for Change The flagship hospital in the Baptist System is the Baptist Health Medical Center in Little Rock, AR, which includes a comprehensive respiratory unit, critical care facilities, and a neonatal intensive care unit9. When the contract for blood gas analyzers was due in 2013, BaptistHealth leadership ended up renewing the agreement with the existing vendor; the hospital then received an updated version of the device in use. Before long, the technical issues caused by these new analyzers “created a perfect storm” of clinical, workflow, and cost-related challenges at the health system10 The analyzers’ cartridge supplier was changed soon after the contract renewal, which caused a deterioration in the quality of cartridges that led to multiple issues. First, the devices began taking in samples without providing an analysis (i.e., “eating the sample”), requiring clinicians to perform redraws that are highly undesirable as patients often experience pain and discomfort due to multiple needle sticks. Second, the analyzers tended to provide inaccurate results instead of informing the user about potential issues when samples were contaminated or unfit for testing. Considering its possible impact on clinical decision-making, these inaccurate results can be particularly problematic for patients and providers. Third, the devices routinely stopped working in the middle of analyses, causing the staff to spend valuable time — sometimes 30 minutes or more — troubleshooting the analyzers instead of seeing patients. The interruptions in service regularly caused the respiratory care center to grind to a halt while the blood gas analyzers took time to reboot or be repaired. Spare parts were provided only after the devices stopped functioning instead of
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Featured Article allowing Baptist Health to keep them in stock for emergency repairs. Furthermore, when supplied, the parts were usually refurbished, leading to inefficiencies in the repair process. The lack of adequate vendor support while Baptist Health struggled with an array of device-related issues only worsened the situation. The manufacturer delivered sub-par customer service and failed to respond to the issues outlined above or rectify these problems when staff brought up their concerns. As such, the numerous cartridge-related obstacles led to direct and downstream impacts for various stakeholders. In fact, Baptist Health also incurred additional costs due to the deterioration of cartridge quality since the new cartridges had lower testing capacities and lasted fewer cycles. The increased use of cartridges also generated more hazardous waste that was expensive to dispose of and environmentally harmful. Suboptimal connectivity of the analyzers and a lack of essential software features also led to multiple inefficiencies in the hospital system. The devices did not automatically communicate with Baptist Health’s electronic medical record (EMR) software and occasionally lost connectionwith the hospital servers. Manual data inputs were required for reports to show up on the physicians’ charts, leading to delays in the “effective” turnaround time (TAT, i.e., the time from the analysis until physicians can access the results for clinical decision-making). Staff had to switch between the analyzer and a desktop computer to enter patient information. Clinicians also could not modify records or correct errors without going through a middleware, which demanded additional time and costs from the health system. Workflow efficiency was thus severely affected by a host of connectivity and softwarerelated problems.
Analyzer Selection & Evaluation Considering the clinical, workflow, and cost implications of the issues caused by the blood gas analyzers, the devices quickly became unpopular with stakeholders at Baptist Health, which prompted them to look for an alternative to their analyzers. The health system formed a committee headed by two leaders from its respiratory department to identify and evaluate multiple devices in the market. The committee traveled to conferences, talked to peers in similar healthcare positions, and consulted other members of the Baptist Health network to narrow down a list of potential
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Featured Article replacement options. The committee considered multiple device features in the blood gas analyzer selection process, prioritizing TAT, EMR integration, and product reliability. Another key consideration was the product support provided by the vendor, especially due to their recent experiences with the previous manufacturer that exacerbated the device-related issues. Respiratory care is a small world, and it did not take long for Radiometer America’s reputation to reach the Baptist Health team. Following substantial positive feedback concerning Radiometer’s devices and customer support, the committee decided to bring in the vendor team for a live demonstration in front of a group of stakeholders, several of whom had decades of relevant healthcare experience. The hospital staff was impressed with the analyzer after the presentation followed by an opportunity to run tests on the new device. Radiometer America also offered flexible contract options, clinical representatives to assist Baptist Health throughout the implementation process, and continuous product support post-implementation. Based on a thorough assessment, Baptist Health leadership chose the ABL90 Flex Plus (Radiometer MedicalApS, Copenhagen, DK) for its long-term blood gas analyzer needs.
Device Adoption & Observed Impacts Following the device selection, respiratory care leaders at Baptist Health proceeded to the implementation phase, and collaborated with the internal (i.e., hospital IT team) and external (i.e., Radiometer America team) stakeholders to ensure a smooth transition. The hospital began the adoption of the devices at the flagship Little Rock campus first, followed by other large hospitals, and finally to the other regional hospitals in the Baptist Health System. This approach would allow initial implementation challenges to be addressed at larger hospitals with access to more resources first, then for the process to be streamlined, before smaller facilities transitioned to the new devices. By January 2021, eight devices were introduced to the respiratory care center of the Little Rock campus. Once implemented, Baptist Health stakeholders felt “more confident with the new changes” as the analyzers instantly presented significant improvements in clinical, workflow, and cost-related outcomes10. Improved TAT & EMR Integration One of the most significant improvements with the ABL90 Flex Plus was the faster TAT: The new analyzers could generate test results in 35 seconds. Furthermore, the devices came equipped with AQURE (Radiometer Medical ApS, Copenhagen, DK), a companion software that provided POC data management, direct EMR integration, and convenient updates from the vendor as well as the elimination of the need for middleware. Through this software, the analyzers connected seamlessly with Baptist Health’s EMR system and uploaded analysis results directly without the need for additional data entry. Not only did the connectivity and software features of the analyzers improve the “effective TAT,” but they also saved valuable time for clinicians that could instead be spent on patient care.
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Featured Article Robust Reliability & Minimized Redraws
The ABL90 Flex Plus provided accurate results using a single sample without the need for additional needle sticks. The analyzer performed measurements on 17 different parameters reliably and did not consume samples without providing a result, unlike the previous devices. When there was a samplerelated issue, the analyzer informed users that the blood specimen was contaminated or otherwise unfit for analysis, then urged providers to investigate the errors further. Moreover, the reliability of the analyzers helped minimize the need for redraws, preventing significant discomfort for the patients. Hospital staff also did not have to allocate valuable patient-care time to device maintenance and troubleshooting because of the increased reliability of their analyzers. Enhanced Clinical Efficiency Implementation of the ABL90 Flex Plus provided significant benefits to the workflow. Staff appreciated that they could modify patient data using the analyzer’s easy-to-use interface without having to operate a separate computer or middleware. Respiratory leads could monitor the status of devices and troubleshoot issues from the comfort of their home or office thanks to the connectivity of the analyzer and the software features of AQURE. Instead of cartridges, the analyzer featured a cassette system, which estimated how many more samples the cassettes could run before needing to be replaced. Respiratory leads also appreciated the analyzer’s mobility; the device could be unplugged, wheeled to a new location, then plugged back as needed. The wire adaptability removed concerns about battery life, and the analyzer was large enough not to get lost in fast-paced, high-volume settings. Finally, the staff appreciated not needing to file extra paperwork considering the devices’ exemption from Individualized Quality Control Plan regulations. Decreased Costs Since the ABL90 Flex Plus did not require cartridges for sample analysis, the hospital realized significant cost reduction from the disposal of hazardous substances. The cassette-based system produced less waste and could process more samples before needing to be replaced, which considerably helped increase efficiency. Software features of AQURE also eliminated the need for middleware, potentially leading to additional cost savings. Baptist Health also experienced further convenience and cost reductions from the “all-inclusive, long-term contract”that Radiometer offered to support its analyzers, which differed from the charge-per-service practice of the previous devices10.
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Featured Article Vendor Involvement One of Baptist Health’s chief considerations in switching analyzers was a lack of vendor support from the previous manufacturer, which amplified the device-related issues. Radiometer America’s approach before, during, and after the implementation process provided a refreshing change from this experience.
Organizations may significantly improve their clinical practice, workflow efficiency, and patient-provider satisfaction by transitioning to medical devices that effectively meet their needs.
Before device adoption, Radiometer America offered Baptist Health a reasonable, cost-effective five-year contract option that included servicing and technical support. The vendor also worked with various stakeholders at the health system to enable a smooth transition. For example, vendor representatives and hospital IT staff collaborated to build additional network capacity to improve the analyzers' connectivity and ensure that the AQURE software was able to integrate with the EMR system.
During the implementation process, a Radiometer clinical application specialist was directly involved in planning, calibrating, and verifying the analyzers. Staff members reported Radiometer America representatives to be prompt and attentive, noting that they came ahead of time to observe the hospital’s workflow and determined how their analyzer can best provide value. Furthermore, representatives were also present for on-site service as soon as the analyzers went live for any troubleshooting that may have been necessary. Even after device adoption, the Radiometer America teams continue to maintain constant technical support for Baptist Health. The vendor provides a sales representative solely dedicated to the hospital, as well as a technical helpline and weekly phone call check-ins, to ensure the quality of care at the health system. From planning stages to device adoption and continuous product support, Radiometer America's commitment assured Baptist Health administrators that they had made the correct choice for their new blood gas analyzers.
Overcoming Hurdles Though the ABL90 Flex Plus provided significant benefits to the respiratory department at Baptist Health, the adoption of the new device did not come without challenges. The global COVID-19 pandemic severely affected delivery and supply chains, which delayed device implementation efforts. The hospital thus was not able to install the new analyzers as quickly as it wanted. The pandemic made in-person meetings difficult, leading to barriers in coordination between the vendor and Baptist Health teams and a lapse in time between training and rollout. Organizing testing and
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Featured Article training sessions with staff was also time-consuming and entailed a learning curve. Despite these challenges, the teams at Radiometer America and Baptist Health were able to work together to tackle these hurdles and successfully install the new blood gas analyzers within a few months.
Final Thoughts and Next Steps This case study suggests that organizations may significantly improve their clinical practice, workflow efficiency, and patient-provider satisfaction by transitioning to medical devices that effectively meet their needs. Extensive vendor involvement and customer service proved valuable during the pre-and post-implementation processes. After fully transitioning to the new analyzers at its largest campus, a key stakeholder at Baptist Health commented that they were “extremely likely to recommend” these new devices to similar institutions mainly for their “reliability and user friendliness”10. Currently, the health system is in the process of employing these new analyzers in its regional hospitals with Little Rock campus staff members leading training and adoption efforts.
Citations 1.Hill, J. (2007). Blood Gas Analysis. Biomedical Instrumentation & Technology, 41(1), 55–56. doi:10.2345/0899-8205(2007)41[55:bga] 2.Acute care testing handbook. Radiometer Medical ApS, 2700 Brønshøj, Denmark, 2014. Asaccessed on http://www.radiometer.com/en/knowledge-center/handbooks/acute-care-testing-handbook. 3.Indrasari, N. D., Wonohutomo, J. P., & Sukartini, N. (2019). Comparison of point‐of‐careand central laboratory analyzers for blood gas and lactate measurements. Journal of Clinical Laboratory Analysis, e22885. doi:10.1002/jcla.22885 4.Dukić L, Kopčinović LM, Dorotić A, Baršić I. Blood gas testing and related measurements:National recommendations on behalf of the Croatian Society of Medical Biochemistry and Laboratory Medicine. Biochem Med (Zagreb). 2016;26(3):318-336. doi:10.11613/BM.2016.036 5.Awasthi S, Rani R, Malviya D. Peripheral venous blood gas analysis: An alternative toarterial blood gas analysis for initial assessment and resuscitation in emergency and intensive care unit patients. Anesth Essays Res. 2013;7(3):355-358. doi:10.4103/0259-1162.123234 6.Hinds, L. E., Brown, C. L., & Clark, S. J. (2007). Point of care estimation of haemoglobin inneonates. Archives of Disease in Childhood - Fetal and Neonatal Edition, 92(5), F378– F380. doi:10.1136/ adc.2006.107771 7.Kapoor D, Srivastava M, Singh P. Point of care blood gases with electrolytes and lactates in adult emergencies. Int J Crit Illn Inj Sci. 2014;4(3):216-222. doi:10.4103/2229-5151.141411 8.About Baptist Health of Arkansas: Our History of Caring. Baptist Health. https://www.baptist-health.com/ about-baptist-health-arkansas/. Published 2021. AccessedSeptember 7, 2021. 9.Baptist Health. Encyclopedia of Arkansas. https://encyclopediaofarkansas.net/entries/baptist-health-5118/. Published 2021. AccessedSeptember 7, 2021. 10.Data on File. Interviews conducted at Baptist Health of Arkansas by Boston StrategicPartners, Inc. July 2021. Radiometer, the Radiometer logo, ABL, AQURE are trademarks of Radiometer Medical ApS. © Radiometer Medical ApS, 2700 Brønshøj, Denmark, 2020. All Rights Reserved.
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Value Analysis 101 Value Analysis Team Selection Robert T. Yokl, President/CEO, SVAH Solutions
The Secret to High-Performance Value Analysis Teams All winning teams are a combination of attitudes, talent, and traits matched with the right leadership to give them the vision, values, goals, and a “can do” attitude; a team that takes responsibility for its actions and pride in its accomplishments. Over the last 30+ years, we have documented and observed the ideal competencies or what outstanding value analysis team leaders and team members do more often, in more situations, with better results. To identify the individuals in your healthcare organization who also exhibit these same winning competencies, we would suggest that you employ a 360-Degree Feedback System in assessing your value analysis team leader and team member candidates’ qualifications prior to full membership on your value analysis teams.
The 360-Degree Feedback System Is The Solution The first step in your selection process for new or replacement team leaders and team members is to have your Value Analysis Steering Committee (I hope you have one) appoint a team leader, administrative representative (CFO, COO, or VPs), facilitator, recorder, and team members for each of your value analysis teams as shown in figure 1.
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Figure 1: Value Analysis Surgical Team Membership TEAM LEADER
Martha Jones
*Director of Laboratories
ADMINISTRATIVE REPRESENTATIVE
Ted Justine
*Vice President of Professional Services
FACILITATOR
Mary Cummings
*Staff Facilitator
RECORDER
Pat Ford
*Administrative Secretary
Team Member
Cindy Wright
Operating Room Manager
Team Member Team Member Team Member Team Member Team Member Team Member Team Member
Ben Pierson Charley Thompson Dr. Henry Pitman Edna Stevens Edward Dempsey Jules Reddington Peter Cummings
OR Head Nurse Anesthesia Head Nurse General Surgeon Circulating Nurse Respiratory Therapy Manager Lab Manager Accounting Manager
Team Member Team Member
Ted Billings Ester Pickings
Infection Control Nurse Outpatient Supervisor
As a general rule, your value analysis coordinator, manager, or director would recommend your team leaders and members composition to your Value Analysis Steering Committee for their approval. Your facilitators should be selected from your healthcare organization’s pool of supply chain professionals. Fifty percent of your team membership and team leaders should be selected from areas other than the product line or functional area that they will be investigating to avoid territoriality and group think. Your value analysis coordinator, manager, or director should attend all VA team meetings as a resource to your team leaders and members. Step two in the selection process is to send a questionnaire (Figures 2 and 3) to these individuals’ direct reports, one customer, and one colleague to rate them (on a scale of 1-10) on their ideal VA competencies. Give the rater one week to respond to the questionnaire. The questionnaire should be prepared by and returned to your value analysis coordinator, manager, or director. Naturally, a Value Analysis Steering Committee member can be one of your raters, if they have direct contact with any of these individuals on a day-to-day basis. The reason for doing this is that you only see one face of these individuals, but by having them assessed by numerous other individuals with whom they interact daily, in many different venues, you can truly identify the right candidate to be involved as a leader or member of your value analysis teams.
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Value Analysis 101
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Figure 2: Team Leader Competency Questionnaire Competencies
Rating
Motivator Organized Team Builder Enthusiastic Results Oriented Communicator Welcomes Challenges and Change Anticipates Problems & Resolves Them Acts as Role Model Overall Rating: Figure 3: Team Member Competency Questionnaire
Competencies Analytical Thinker Organized Reliable/Dependable Enthusiastic Takes Initiative Computer Literate Welcomes Challenges and Change Looks for Growth and Recognition Acts as Role Model Overall Rating
Rating
On the following page, we have shown in Figures 4 and 5 sample consolidated rating sheets for value analysis team leaders and team members that are to be completed by your value analysis coordinator, manager, or director once they received the questionnaires back from your raters. These questions need to be tallied to reflect three ratings for each candidate. Then, average the ratings for a final total to be calculated for each candidate. The ideal team leader and team member candidate will have an overall rating of 8 or higher.
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Figure 4: Team Leader Consolidated Rating Sheet Ideal Competencies Motivator Organized Team Builder Enthusiastic Results Oriented Communicator Welcomes Challenges and Change Anticipates Problems & Resolves Them Acts as Role Model Overall Rating:
Rating 1 8 9 7 10 9 8 9 6 8 XXXX
Rating 2 7 9 6 10 7 8 9 7 7 XXXX
Rating 3 6 7 8 10 9 8 7 9 9 XXXX
Avg. Rating 7 8 7 10 8 8 8 7 8 8
Figure 5: Team Member Consolidated Rating Sheet
Ideal Competencies Analytical Thinker Organized Reliable/Dependable Enthusiastic Takes Initiative Computer Literate Welcomes Challenges and Change Looks for Growth and Recognition Acts as Role Model Total Rating
Rating 1 9 10 8 8 9 8 8 9 8 XXXX
Rating 2 7 10 9 8 9 8 7 7 8 XXXXX
Rating 3 8 10 9 8 8 8 7 7 6 XXXXX
Avg. Rating 8 10 9 8 9 8 7 8 7 8
If for any reason your value analysis coordinator, manager, or director doesn’t receive a response back from a rater, they are required to call raters to obtain a rating. If all else fails, then your value analysis coordinator, manager, or director must send a new questionnaire out to new raters, until you have three ratings for each candidate for team membership. If any candidate has a total overall score below eight, then you need to start the selection process all over again until you have identified team leaders and members that have a rating above eight.
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Value Analysis 101
Robert T. Yokl
Avoid Selecting The Usual Suspects Over the years, we have seen value analysis team leaders and members selected because of their title (director of nursing, operating room supervisor, infection control nurse, etc.) or influence in their healthcare organization, as opposed to their unique competencies, with disastrous results. For instance, once a CFO client asked me to assign his medical library director to his new value analysis team because he thought she would be a good team player, which I acceded to. Unfortunately, this individual turned out to be one of the worst value analysis team members in my memory because she wasn’t an analytical thinker, not computer literate, and didn’t take initiative on any of her value analysis projects. That’s why we developed the 360-Degree Feedback System. We found it to be the solution to selecting the right people with the right competencies that are needed to have high performance value analysis teams. We have done the research for you so that you won’t make the mistake that we have made in the past of selecting the wrong team leaders and team members for your value analysis teams.
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SUPPLY CHAIN
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Utilization Management
Clinical Supply Utilization Management: It’s Easy with the Right Analytics Robert T. Yokl, President/CEO, SVAH Solutions
If you are honest with yourself, you know that your price and standardization savings are slowly disappearing. Yet, your healthcare organization still needs to save millions of dollars annually just to keep pace with inflation. With this said, I’m sure you realize that your hospital, system, or IDN’s senior management is looking to the supply chain for even more savings this year due to the negative effects of the pandemic on their bottom line.
Moving To The Next Level Of Savings Performance Unfortunately, these new supply chain savings won’t be achieved with price and standardization alone. New sources of savings must be discovered to bridge your savings gap created by the erosion of your price and standardization savings. To this end, it’s been our observation that most healthcare organizations are throwing darts at an elusive and moving target to find their clinical supply utilization savings, and with meager results. This is because most hospitals, systems, and IDNs aren’t employing a scientific approach to identify their clinical supply utilization misalignments (CSUM). That’s where
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Utilization Management
Robert T. Yokl
clinical supply utilization analytics come into play. It’s the art and science of measuring trends, patterns, anomalies, and variations in your supply stream to quickly identify your CSUM savings opportunities, thereby, moving to the next level of savings performance.
Competing With The Right Analytics Thomas H. Davenport, the author of Competing on Analytics, describes analytics as “the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions.” What Davenport is saying, in layman’s terms, is that if you organize your supply spend into standardized descriptive categories (e.g., IV sets, dressings, Oxisensors, etc.) and then measure these same commodity groups by their Activity-Based performance, your CSUM savings opportunities will quickly appear before your eyes. For example, we identified that one of our client’s wound care utilization was 34% over their peer’s metrics (or $51,000) on an annualized basis. It’s no accident that we uncovered this wound care savings and 96 other utilization misalignments for this same client. It’s because we employed Activity-Based Analytics to do the difficult work for us that never would have been uncovered by the naked eye or intuition.
Since things change and people change, this always brings about new CSUM savings opportunities.
Never Miss a CSUM Savings Again Because some of our clients have employed our Activity-Based Analytics for several years, we are able to trend their expenses over a two or three-year period, thereby identifying additional savings opportunities that they weren’t aware were available to them. Since “things change and people change”, this always brings about new CSUM savings opportunities when you know how to look at your data retrospectively. This was the case with a 98-bed hospital we worked with that reduced their contrast media cost by $42,632 the first year after we identified this utilization misalignment. Then, this same hospital had to revisit this same commodity two consecutive years thereafter when its contrast media utilization cost spiked repeatedly. The reason for these lapse in protocol was that the hospital’s radiology staff kept falling back to their old bad habits and had to be reeducated about the best practices that were keeping their contrast media costs in line in the first place.
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Utilization Management
Robert T. Yokl
It is a worthwhile effort for you to refresh and trend all of your expense data on a monthly basis to ensure that your utilization trends, patterns, and variations are within acceptable limits and have not spun out of control. Keep in mind, the reversal in your clinical supply utilization performance can easily happen, especially when your healthcare organization’s census has large variances.
CSUM Is a New and Emerging Best Practice Clinical supply utilization management is a new emerging best practice you should strongly consider as a new savings source to further reduce your supply costs - beyond price and standardization. All you need to get started is to develop or outsource your Activity-Based Analytics platform to make your savings job easier. It should also be noted that since your value analysis team members have limited time for value analysis and utilization studies, their energies can’t be needlessly wasted on dry holes. That’s why your utilization savings candidates must be real, quantifiable, and irrefutable before you even consider them as targeted savings opportunities. So, if you are looking to up your savings game, Activity-Based Analytics is the correct path to follow on your journey to never-ending and repeatable new savings, now and in the future for your healthcare organization. Volume 10/Issue 1
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Featured Article
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Clinical Integration
Clinical Integration for Your Value Analysis Program and Supply Chain By Robert W. Yokl, Sr. VP, Supply Chain & Value Analysis — SVAH Solutions
With the new term “Clinical Integration in Supply Chain” that has been embraced by many health systems throughout the country, there seems to be a little confusion regarding the actionable steps with this next level modality. You could easily say that you need more physician involvement in value analysis teams or need to add more clinicians to the teams as well. Most value analysis teams are already made up of key clinicians, including some doctors. What exactly are you going to accomplish with just adding these titles to your teams? Let’s face it, we have never ignored clinicians in the value analysis or strategic sourcing aspect of the healthcare supply chain. If anything, there is even more specialized clinical expertise in place on Category Specific Value Analysis Teams (e.g., Cath Lab, Surgical, Radiology, Clinical Nursing, etc.) with mostly nurses now tasked with managing the process. The same goes for the evidence-based processes employed on new product requests which take up a good bit of value analysis agendas. If anything, there is certainly more involvement and more engagement of clinicians with value analysis and strategic sourcing processes in supply chain.
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Clinical Integration
Robert W. Yokl
What Should Be the Primary Objectives of This New Modality, Clinical Integration? Just having the clinicians sit on your VA teams does not always guarantee improved engagement or results. We have found that the best way to support this new modality is to first update or create a formal value analysis strategic plan which will detail exactly what your clinical integration program will look like. This will include training programs, case studies, and software reporting for this next level engagement.
How to Drive Results from a Clinical Departmental Level A great example of this is when we worked with a large university teaching medical center and provided each of their clinical departments with a category-by-category volume centric benchmark report of all of their nursing units including their Emergency Department. Each department then designated a clinical supply leader who was responsible for investigating their top areas of improvement. They were then provided a unit specific category-by-category benchmark report that compared their own historical best practices and also compared them to other like-sized nursing units in the medical center. The clinical supply leader would then identify one or two projects to work on for cost and quality improvement and report the results to the Nursing Shared Governance Council at the medical center. When this was initially rolled out and presented to the Nurse Managers and Directors at this medical center, I thought it would quickly get blown out of the water or ignored altogether. Not only did the Nurse Managers and Directors “get it” but they started asking for changes to the reporting and timeframes for when the data was delivered to their clinical supply leaders. Plus, they made sure that everyone was trained in the process and understood the objectives which refers back to accountability to the Nursing Shared Governance Council.
Nurse Led Improvement at Its Best The end results were amazing as they found out who their best practice nursing units were and their consumption of products such as IV sets, glucose test strips, and every major product used on a unit. They found inventory mistakes, incongruent policy issues, product mismatches, waste, storage issues for products and reusables, as well as how to maximize patient care and life cycle use of their patient care products. This was a clinician-driven system that once trained and coached, they started making major strides toward improving patient care while lowering costs. All this happened with very specific planning, reporting, and accountability which should be the key ingredients of a clinical integration program for your supply chain and value analysis program.
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www.UtilizerDashboard.com
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Benchmarking
Benchmarking is Essential for Your VA & UM Success Robert T. Yokl, President/CEO, SVAH Solutions
Ignore the Value of Benchmarking at Your Own Peril We have found that benchmarking, or the search for all industries’ best practices, is the best technique we know of to improve your value analysis and utilization management performance. Likewise, without benchmarking you will never know if you are at your best in all areas of value analysis and utilization management. For instance, how many hospitals have value analysis steering committees to guide their VA program? What are the ideal number of training hours that our value analysis team requires to be proficient? How many hospitals have bought the medical device we are considering buying? What is the IV set utilization cost of hospitals our same size and with similar operating characteristics? These are just a few benchmarking questions that can’t be answered with any other technique. So, ignore the value of benchmarking at your own peril.
Why Isn’t Benchmarking More Popular? As we see it, benchmarking has been unpopular in supply chain circles because their metrics have too often been wrong for the following reasons:
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Benchmarking
Robert T. Yokl
Didn’t compare apples to apples: We have observed benchmarks that compared a 300-bed community hospital with a 770-bed university teaching hospital, thus, negating the relevance of this data. This can happen when artificial intelligence is employed instead of human intelligence to select the parameters for the benchmarking exercise.
Benchmarking: The search for all industries’ best practices that lead to superior performance
Errors in the data: Many times, there are errors in the hospital’s data that is given to the benchmarking agency. Or the agency doesn’t perform quality control checks on the data given them. Either way, your benchmarks could be flawed. Lack of context: Not knowing how your benchmarking partners or peers achieve their benchmark (i.e., processes, practices, procedures, etc.) makes it difficult to pinpoint meaningful areas of improvement. Measurement issues: Sometimes it is hard to find a match for a benchmark because your metrics are unique. For instance, if you measure your telecommunication cost with a metric of cost by employee, your benchmarking partner or peer hospitals might measure it by cost by (adjusted) patient day. The answer to this dilemma is to change your metric to conform to the industry standards. As these reasons suggest, benchmarking is an art and science. If applied artfully, consistently, and carefully, benchmarking can be of enormous benefit to value analysis practitioners.
Benchmark Triangulation Can Assure The Correct Answers Now that I told you all of the things that can go wrong with your benchmarking, here’s a technique called Benchmark Triangulation (or a series of measurements) that can assure that you obtain the correct answers to your benchmarking questions. Consequently, triangulation requires three consistent benchmarks (historical, peer, and internal) to confirm that your benchmarking exercise is giving you the correct answer. The differences between these three benchmarks are as follows: Historical Benchmark: This is your own year-over-year metric on any parameter you are investigating, such as your own healthcare organization’s cost per lab test per discharge or number of IV sets utilized per (adjusted) patient day. Peer Benchmark: Requesting the same metric from a hospital, system, or IDN that mirrors closely your healthcare organization’s size, type, and with similar operating characteristics.
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Benchmarking
Robert T. Yokl
Internal Benchmark: Requesting the same metrics from hospitals in your system or IDN. It’s something we do with our CSUM software that automatically shows similar metrics from your cohort group. This should be a best practice for you, too. The end result of this three-way comparison is that all three Triangulation Benchmarks should be very close. If not, then you need to question your peer comparison, quality of your data, or measurement issues. Generally, after reviewing these reasons for poor quality benchmarks, you will find the reason for the discrepancy. Based on our experience, it’s a matter of trial and error until you get it right.
Don’t Just Benchmark In Our Industry We have a tendency in healthcare to only benchmark industry leaders and competitors within our own industry, instead of all industries, where applicable. This means that we could be missing some of the best practices in other industries that can be applied to our own healthcare organization. For instance, KPI benchmarks in contract management, telecommunications, inventory management, etc., that could also relate to your healthcare operations.
Achieve Superiority Over Your Peers And Competitors We would all like to think that we have the best value analysis and utilization management program, but have you tested this assumption? Do you know where you stand against your peers and competitors? For example, how many new product, service, and technology requests are you receiving annually per hundred occupied bed? Is it within acceptable limits or do you have requisitionitis? How much are you saving annually per discharge? What is your copier utilization cost per employee? All of these and more questions can and should be answered through benchmarking before you can be reliably assured that you have achieved superior performance with your value analysis and utilization management program. However, to maintain this position, you will need to continuously benchmark with your peers and competitors to maintain that status. Then, and only then, you will be considered best in class!
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Perspective
Value Analysis Software Makes Your Job Easier Robert T. Yokl, President/CEO, SVAH Solutions
Let Technology Up Your Value Analysis Game
The days of toiling with
Value analysis software is here to stay in the healthcare Word documents & supply chain and there are good reasons why. Those spreadsheets can be who employ value analysis software at their hospital, behind you. system, or IDN know that it easily consolidates all of their information in one platform. This aids in vetting new product, service, and technology requests and can provide important resources for evidenced-based decisions. Slowly and surely, the days of value analysis professionals toiling with multitudes of Word documents and spreadsheets that create even more work can be behind you if you embrace and deploy one of the versions of value analysis software on the market today.
There Is Always A Better Way There is always a better way for value analysis professionals if they aren’t stuck in the “this is how we always did it” mode. This thinking is a recipe for disaster for those who don’t know what they don’t know because they are just too caught up in the day-to-day processing of new product requests, recalls, and GPO contract conversions to realize there is a better way. Let’s face it, today’s value analysis professional’s job is much more challenging than it has been in the past. The dynamics have changed, the players are smarter, and your customers want better reports, better decisions, and faster response times on their new product requests. How can you improve when you are still working with spreadsheets, Word documents, or dare I say, paper documentation - yikes!
Case Study: 6,000 New Requests To Control Manually I recently spoke to a Value Analysis Manager whose health system had processed over 6,000 new product requests the previous fiscal year. This number blew my mind since I calculated that it represented 23 new product requests a day. Even worse, this healthcare organization only had three value analysis professionals to manage all of these thousands of requests. I concurred that this task was overwhelming for these value analysis professionals and would have been a heck of a lot easier if this organization had value analysis software. Could your healthcare organization be experiencing this same challenge that value analysis software will solve? By the way, there is a happy ending to the story I just told you. The Value Analysis Manager I just spoke about is budgeting for value analysis software in 2022.
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