Copyright 2024 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 W. Yokl, President, SVAH Solutions
I often hear Value Analysis and Supply Chain professionals talk about how “mature” their VA/ Supply Chain programs are. This is great to know but I am a firm believer that VA and Supply Chain are still just scratching the surface as to what they can truly do for their organizations. Many are just a few steps away from where they need to be, and others think they are close but don’t know what the next steps to take are in their VA and Supply Chain journey. Lastly, there are those that just follow what everyone else is doing and that is okay as well, but they are always going to be a bit behind.
I have been very lucky to see the best of the best and the worst of the worst and everything in-between in our industry over my 32 years in healthcare. To take you and your program forward you will need a vision for your goals and objectives to perfect your VA and Supply Chain program in 2025 and beyond.
The worst thing you could do is to have a mindset that your VA/Supply Chain program is the greatest thing since sliced bread. You only know what you really know. For instance, a VA program that is 100% focused on new product requests, recalls, and contract conversions is not a completely futuristic program. This may be all that your senior leadership is expecting from you and your teams but there is so much more you can do. Thinking you’re already the best is not going to get you anywhere except in a big rut.
W. Yokl
The best way to make your Value Analysis and Supply Chain programs better in 2025 and beyond is to first take a step back and take a hard look in the mirror. You will need to be honest about your evaluations and where you need to improve, even if you don’t think you can be better. There are lots of ways to find this out like a survey to your senior leadership or to bring in a trusted peer to look at your program without any bias. The bottom line is that this honest look in the mirror should highlight your strengths, weaknesses, opportunities, and threats (SWOT analysis) for the future of your program.
This is a catch phrase that has been created in the past five years which can make it seem as though adding more physicians and nurses to your VA/Supply Chain programs will miraculously start creating next-level results. Let’s face it, nobody has made any decisions or changes without consulting the nurses, doctors, and even line department heads/managers in the past nor can we in the future. You must have some sort of strategy and/or plan for adding more doctors or nurses to your value analysis teams. What will the added clinical capability do in your VA program?
The majority of value analysis teams have little or no training in value analysis strategies and methods let alone training in advanced methods of VA. Why is this? There is a focus on training the Value Analysis Managers/Directors through AHVAP/AHRMM but we fail to realize that they are only just a cog in the value analysis machine that needs to be kept at optimal operating efficiency. How can you expect new and better results from your value analysis teams if you are not giving them the next-level strategies, methods, and tools to make things happen? Don’t just invite new team members to meetings and hope they pick it up along the way. Instead, develop, borrow, or buy a training system you can use to put everyone on the same page while bringing advanced results to your organization.
Find out who the best of the best is in our value analysis world and then ask them what they did to get there. Sounds simple, right? It’s a little more complex when it comes to Value Analysis programs
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as you must truly delve further into what elements you and your benchmarking partners do well and don’t do well. Don’t just take your benchmarking peers' words for it, make them prove that they are doing these great and advanced things, and they should make you prove it as well. Use key performance indicators that make sense, like savings per hospital or health system, number of new product requests per month and per year, number of recalls handled per year, etc. Remember, benchmarking is not just comparing one health system’s VA program to another, it is finding the best practice VA programs that you can emulate.
“Proactively plan on incorporating new modalities into your Value Analysis program.”
Most VA and Supply Chain professionals wait for their C-Suite to drop a bomb on them that they are shifting into cost management mode, increasing their physician involvement, or committing to new levels of organization quality/outcomes. Whatever it is, it puts you on your back foot per say and you have to figure out how to make these new goals and objectives happen in an already complex VA world. Why not just proactively plan on incorporating new modalities into your Value Analysis program whether you are going to implement them today, next month, or next year. It is sort of like contingency planning for disasters except you are planning for your future when you get the go ahead on the next modality, training, or tool you want to implement. Senior leadership like plans and visions for the future and it will help you sell your next steps in your program versus just being told what to do next.
It is Better to Look to the Future Now Versus Someone Dictating It to You Later
There are a lot of advanced strategies, tools, training, and methods that are there for you to incorporate into your health system’s Value Analysis program, but you need to start planning for your future to make these happen. Winging it is just that, and it never seems to bode well for those that like to shoot from the hip on what the next major steps will be for their Value Analysis program. It is better to look to the future now and have full control over where you are taking your program than to just sit back and allow your C-Suite to dictate your next steps. Control your own destiny and start thinking about your VA program’s future!
Danielle Miller, Healthcare Data Specialist, SVAH Solutions
Inflation poses a significant challenge for industries across the board, and healthcare is no exception. Hospitals are particularly vulnerable due to their reliance on complex supply chains that deliver essential medical equipment, pharmaceuticals, and personal protective equipment. As inflation continues to drive up the cost of these items, hospital supply chain and value analysis professionals are under pressure to maintain quality care while managing operational costs. Here are several strategies that can help hospitals combat inflation through improved supply chain management.
One of the keys hospitals can use to counter rising costs is through data-driven decision-making. Advanced analytics allow hospitals to forecast demand more accurately, optimize inventory levels, and make more informed purchasing decisions.
Data-driven insights can also reveal inefficiencies in the supply chain, such as over-ordering or underutilized resources. By addressing these inefficiencies, hospitals can avoid waste and reduce the costs associated with excess inventory. In addition, optimizing the inventory of high-cost, low-use items can free up capital and reduce costs, ultimately softening the blow of inflation.
Inflation can exacerbate the risk of supply chain disruptions, as vendors may raise prices or experience delays due to their own increased costs. A single-source supply strategy, though efficient under normal circumstances, becomes risky during periods of economic instability. By diversifying their supplier base, hospitals can mitigate price hikes and ensure access to critical materials.
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Our contracting aim is to standardize volume across both major and minor categories to secure the best pricing or tier level. This means we are limited to the options provided by the vendors in our contracting formularies.
However, customization is still possible by working within those boundaries to find lower-cost alternatives that meet customer needs with equal or better reliability. The strategy involves using value analysis to study the functional requirements of clinicians, eliminating waste, and identifying unnecessary features, thus fine-tuning products to reduce costs without sacrificing quality.
In an inflationary environment, the cheapest option is not always the most cost-effective. Valuebased procurement focuses on the total cost of ownership rather than the upfront purchase price of a product. For example, a more expensive medical device may have a longer lifespan, lower maintenance costs, or provide superior patient outcomes, ultimately leading to lower costs over time.
Hospitals should focus on suppliers who can demonstrate value in terms of quality, reliability, and long-term savings. Additionally, by adopting evidence-based evaluations of products and services, hospitals can avoid costly medical errors or complications, which can drive up costs and negatively impact patient outcomes.
Benchmarking the hundreds of categories of hospital supplies and purchased services will give you the greatest insight into your performance as compared to previous quarters and even other hospitals. For example, benchmarking can empower you with the knowledge on where you stand in categories such as suture cost per surgery case, balloon catheter per cath lab case, or IV set cost per patient day. This will allow you to see where you may be over-consuming or using feature-rich products.
The hospital supply chain is uniquely vulnerable to inflation, but proactive measures can help combat rising costs while maintaining high-quality patient care. Through embracing data analytics, diversifying suppliers, prioritizing customization, focusing on value, and utilizing benchmarking, hospitals can build more resilient and cost-efficient supply chains. While inflation remains a challenge, hospitals that adopt these strategies will be better equipped to weather economic pressures and continue delivering vital care to their communities.
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J. Hudson Garrett Jr., Ph.D., MSN, MPH, MBA, FNP-BC, IP-BC, PLNC, VA-BC, BC-MSLcert
MSL-BC, CPHRM, LTC-CIP, CPPS, CAE, CPHQ, CVAHPTM, CMRP, CPXP, CDIPC, FACDONA, FAAPM, eFACHDM, FNAP, FACHE, FAPIC, FSHEA, FIDSA, FAHVAP
Karen Niven, MS, BSN, RN, CVAHPTM, FACHDM, FAHVAP
Healthcare value analysis is an essential process that enables organizations to evaluate the cost, quality, and clinical outcomes associated with medical products, technologies, and services. As healthcare systems evolve, value analysis professionals must look beyond financial performance alone and integrate operational efficiencies and clinical standardization into their practices. When these elements are incorporated, organizations can improve patient outcomes, streamline processes, and reduce costs while ensuring a consistent, high-quality care experience.
Operational efficiency refers to the ability to deliver high-quality care cost-effectively, while making the best use of resources such as staff, equipment, and time. When operational efficiencies are
embedded into the value analysis process, healthcare organizations can reduce waste, streamline operations, and ensure that decisions contribute to overall productivity.
“Incorporating
operational efficiency into value analysis ensures that resources are used wisely, reduces unnecessary costs, and improves care delivery.
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One example of operational efficiency in action is the implementation of an automated inventory management system. Many healthcare facilities struggle with maintaining optimal inventory levels, which can lead to overstocking or stockouts of critical supplies. By automating inventory management, organizations can continuously monitor supply usage in real time, eliminating unnecessary orders, reducing storage costs, and ensuring that essential products are available when needed. As a result, value analysis teams can focus on selecting products that align with streamlined operational workflows and contribute to cost savings without compromising quality.
Another example is workflow optimization in operating rooms (ORs). By analyzing processes and identifying bottlenecks, value analysis teams can recommend improvements such as better coordination of surgical schedules, more efficient use of surgical instruments, and enhanced OR staffing models. These changes can lead to reduced turnaround times between surgeries, improved staff productivity, and more efficient use of costly OR resources. As a result, both patient throughput and overall hospital efficiency are improved.
Incorporating operational efficiency into value analysis ensures that resources are used wisely, reduces unnecessary costs, and improves care delivery.
Clinical standardization involves adopting consistent clinical practices and protocols across an organization. By standardizing care, healthcare organizations can reduce variability in patient outcomes, ensure adherence to best practices, and drive higher quality care.
Consider the example of standardizing wound care protocols across multiple departments in a hospital system. Different clinicians may use a variety of wound care products, leading to inconsistent outcomes and unnecessary costs. Through the value analysis process, the hospital identifies the most effective wound care products based on evidence-based practice, clinical outcomes, and cost efficiency. By standardizing these products across all departments, the hospital reduces variation in wound healing times, minimizes complications, and cuts unnecessary spending on underperforming or duplicative products.
Another example is clinical standardization in cardiac stent selection. In a large health system, different physicians may prefer different stent brands, creating unnecessary variability in patient outcomes and supply chain complexity. By reviewing clinical data and outcomes through a value analysis lens, the system standardizes stent selection across all facilities based on clinical efficacy and cost-effectiveness. This leads to improved consistency in patient outcomes, streamlined training for staff, and bulk purchasing discounts that save the system millions of dollars annually. Through clinical standardization, value analysis ensures that patient care is based on best practices, reducing variation and ensuring consistent, high-quality outcomes.
When operational efficiencies and clinical standardization are combined, healthcare organizations benefit from a powerful synergy that enhances patient outcomes while reducing costs. Together, these strategies allow organizations to optimize resource utilization, streamline care delivery, and achieve consistent clinical results across the board.
For instance, a hospital system that has standardized its protocols for joint replacement surgeries can also implement operational efficiencies by coordinating surgical schedules and optimizing staffing. By standardizing the type of implants used and ensuring efficient OR workflows, the hospital reduces supply chain complexity, lowers procedural costs, and achieves consistent clinical outcomes, such as reduced post-surgery complications and faster recovery times for patients.
In another example, a healthcare facility that standardizes its selection of personal protective equipment (PPE) also implements operational efficiencies by automating the supply chain to ensure just-in-time delivery of PPE. This reduces waste, lowers inventory costs, and ensures that staff always have access to the necessary equipment. The facility not only improves safety for patients and staff but also achieves significant cost savings through bulk purchasing and reduced storage expenses.
“By standardizing the type of implants used and ensuring efficient OR workflows, the hospital reduces supply chain complexity, lowers procedural costs, and achieves consistent clinical outcomes, such as reduced post-surgery complications and faster recovery times for patients.”
Incorporating operational efficiencies and clinical standardization into the healthcare value analysis process is essential for improving patient outcomes, controlling costs, and ensuring high-quality care. These strategies help healthcare organizations reduce variability, streamline processes, and optimize the use of resources, all while maintaining a focus on patient safety and clinical efficacy.
By integrating operational efficiencies like workflow automation and inventory management with clinical standardization in product selection and care protocols, value analysis teams can help healthcare organizations achieve sustainable improvements in both care delivery and financial performance. Ultimately, the combined approach of operational efficiency and clinical standardization ensures that healthcare organizations can thrive in an increasingly complex and resource-constrained environment. The Association of Healthcare Value Analysis Professionals (AHVAP) has extensive resources to assist healthcare value analysis professionals with improving both clinical and operational efficiencies. To learn more, visit www.ahvap.org.
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 is the Senior Director of Clinical Value Analysis at Premier, Inc and serves as the President of the Board of Directors for the Association of Healthcare Value Analysis Professionals (AHVAP).
Darin Hammers, President and CEO, Minerva Surgical
HVAUMM: Could you tell us a little about your history with Minerva Surgical and your journey into the world of healthcare supply chain and value analysis with your innovativedevices?
D. Hammers: Minerva Surgical was founded by a team of experienced serial entrepreneurs with over 30 years of expertise in Women's Health. Throughout their careers, they have developed medical devices such as NovaSure, EnSeal, and Symphion, among others. Their core philosophy is to ensure that each innovation represents a significant advancement, providing a noticeable improvement in safety and efficacy compared to existing solutions. Minerva Surgical's current product portfolio reflects this commitment,
offering top-tier solutions aimed at addressing the causes of abnormal uterine bleeding.
HVAUMM: What most people don’t realize about manufacturers like Minerva Surgical is that you follow Value Analysis and Value Engineering techniques when designing and building your devices even before you engage with the healthcare marketplace. Can you tell us how your design team works through their value analysis process to bring these breakthrough devices to healthcarepractitioners?
D. Hammers: The development of a new medical device extends far beyond identifying a technical solution for an unmet need. It’s a highly complex process that considers various factors, such as the potential difficulty of use in relation to the typical skill set of the end user, the projected cost of the device, and its environmental impact throughout its development, manufacturing, usage, and disposal, among others. While creating the technical solution may be a straightforward engineering task, these additional considerations act as crucial constraints that the solution must adhere to.
At Minerva Surgical, we take a more holistic, comprehensive, and long-term view when it comes to cost. We focus not only on the initial purchase price of a product, but also on the true cost of its usage for both the customer and the healthcare system. Often-overlooked expenses such as time, device reliability, the potential need
for future surgical reinterventions, additional consumables (like distention media), and disposal costs are all factored into our planning from the outset of every project. This ensures that our solutions consistently meet and exceed rigorous value analysis standards.
HVAUMM: It is challenging for Value Analysis Teams to approve new products for existing cases, but they will consider new and innovative devices that solve problems they are experiencing and/or greatlyenhancepatientoutcomes.Canyou explain what problems your devices solve andhowtheyimprovetheoutcomes?
D. Hammers: It's true that many medical conditions already have reasonably effective surgical management options. However, the use of technical innovations to address the safety and efficacy gaps in existing solutions is a key driver of medical device evolution. At Minerva Surgical, our philosophy revolves around developing solutions that significantly improve safety and efficacy.
Let me provide a few examples:
Take the Minerva ES Endometrial Ablation System, for instance. It incorporates a unique two -stage uterine integrity safety check alongside an innovative approach to tissue ablation. Unlike any other system, the Minerva ES employs three different methods of tissue ablation simultaneously: Bi-polar RF, direct thermal energy transfer from the membrane into the tissue, and ablation through intracavitary fluids. When heated, these fluids achieve ablative effects in areas not in direct contact with the device. During the 2-minute ablation, all three methods work in tandem, with each method’s prominence
Darin Hammers
adapting to the specific anatomy of the uterine cavity. This multi-faceted approach has demonstrated statistically significant superiority compared to other solutions and results in the lowest rate of long-term reintervention.
Looking at the Symphion system, its use of bi-polar RF current dramatically accelerates tissue resection while simultaneously coagulating the microcirculatory bed. This reduces bleeding and lowers the risk of fluid intravasation. Additionally, the closed-circuit distention media filtration and reuse system virtually eliminates the risk of fluid overload one of the most dangerous complications in hysteroscopic surgery.
These are just two examples, but they highlight how Minerva Surgical's range of devices is meticulously designed, with patient safety and procedural efficacy as our top priorities.
HVAUMM: Could you give us an example of how you worked through a value analysis review that provided thought provoking insights you didn’t even realize about your devices that the VA Team uncovered?
D. Hammers: That's an interesting question, and the answer highlights that even the most comprehensive analysis can still lead to unexpected outcomes. Fortunately for Minerva Surgical, these surprises turned out to be positive ones.
During one of the assessments of the Symphion system, we realized that its small number of components required for a procedure, though initially underappreciated, became a significant advantage. This simplification of internal
inventory logistics proved to be a considerable benefit. While this aspect was not fully recognized in our initial evaluations, its impact was highly positive.
As a result, Minerva Surgical has now incorporated this design input as a priority in the early stages of future device development, ensuring that inventory simplicity and efficiency remain key considerations in our innovation process.
“Minerva Surgical’s range of devices is meticulously designed with patient safety and procedural efficacy as our top priorities.”
HVAUMM: Value Analysis is the study of function of products, services, and technologies. What are important functional attributes, or should we call them X-factors, that Value Analysis Professionals should know about Minerva SurgicalDevices?
D. Hammers: I believe that members of the Value Analysis Committee should approach the review process with a structured, methodologically sound framework, incorporating variable weighted factors to minimize or eliminate subjectivity. When evaluating the Minerva Surgical portfolio, several key criteria should be considered:
1. Safety: The groundbreaking safety features of both the Minerva ES and Symphion, combined
Darin Hammers
with the proven safety record of Genesys HTA, make these technologies strong contenders. It is crucial to evaluate safety not only under ideal usage conditions but also in scenarios where unintended or uninformed deviations may occur. The question should be: do these systems have built-in safeguards to maintain patient safety even under such circumstances? For Minerva Surgical devices, the answer is a clear yes.
2. Efficacy: Minerva ES has demonstrated superior short- and long-term outcomes compared to other endometrial ablation systems, excelling in rates of success, amenorrhea, patient satisfaction, and long-term re-intervention avoidance. Genesys HTA stands out with its ability to treat patient populations that other technologies cannot. Symphion offers the highest tissue removal rates, resulting in less bleeding, reduced fluid intravasation, shorter procedure times, and numerous other advantages.
3. Clinical Data Credibility: It’s vital to rely on objective, verified data rather than manufacturer-driven or marketing-sponsored studies. Only FDA-approved data, as available in open-source formats, and credible peer-reviewed publications should be used in the evaluation of these devices. This ensures that decisions are grounded in unbiased, validated information.
4. Cost: Despite their superior safety and efficacy, Minerva Surgical’s solutions remain cost -competitive, with increasing adoption across the U.S. However, a comprehensive cost analysis should go beyond device pricing to consider the overall cost of the procedure. In many cases, older technologies may have a slightly lower upfront price but end up consuming more resources during the procedure. Therefore, it’ s
essential to focus on "procedure cost" rather than just "device cost" for a more accurate assessment.
5. Reputation: Reputation is a critical factor for medical facilities, which often promote their use of the most advanced, safe, and effective technologies. Offering Minerva Surgical’s product line enhances this reputation, providing institutions with a competitive edge in delivering cutting-edge care.
While other factors may also play a role, the fundamental truth remains: Innovation drives progress, and the adoption of new technologies is inevitable. The choice is whether to lead the charge at the forefront of this advancement or lag behind as a follower. Personally, I prefer to lead.
Darin Hammers
DarinHammers,PresidentandCEO,MinervaSurgical
Darin Hammers is a strategic senior executive with vast leadership experience in the medical device and business-to-business arenas with global companies such as Cogentix Medical, CR Bard, Boston Scientific, Johnson and Johnson, and NCR Corporation.
Experienced in leading organizations that have spanned over nine segments within the medical device field, Darin draws upon an expansive network of contacts that include key opinion leaders, hospital executives, and group purchasing organization leadership.
A strategic thinker, he is adept at sales strategy development and execution, strategic planning, process management, and the development and retention of people.
Anne Marie Orlando, RN, MBA, RCIS, CVAHP, Senior Director, Clinical Programs at Blue.Point Supply Chain Solutions; Treasurer, Association of Healthcare Value Analysis Professionals
In a rapidly evolving healthcare landscape, achieving clinical value through value analysis (VA) is more crucial than ever. Complex VA initiatives, often involving multiple stakeholders and intricate decision-making, require a strategic and collaborative approach. The key to success is clearly defining the clinical value objectives, engaging stakeholders effectively, and ensuring project success is well-defined and measurable.
Defining what project success looks like is one of the most critical elements in a complex value analysis initiative. Clear success criteria provide a common understanding for stakeholders, ensure alignment, and allow for consistent measurement of progress. A clear definition of success creates clear expectations and establishes a common understanding of the project's goals. It reduces ambiguity and ensures that all stakeholders work toward the same objectives.
Stakeholder engagement is a foundational aspect of any successful VA initiative. You must engage them early and often. It’s essential to identify key stakeholders, and since each may have different priorities, it is critical to create a stakeholder map that outlines their roles, responsibilities, and influence on the project. By fostering open communication and establishing regular touchpoints, you can build a platform for collaboration and ensure everyone is in alignment with the initiative's goals and objectives.
These objectives should be clear, attainable, and aligned with organizational priorities. By setting SMART goals (specific, measurable, attainable, relevant, and time-bound), you provide a clear roadmap for success. Consider clinical, financial, and operational outcomes such as improving patient safety, reducing unnecessary product variation, and achieving a specific cost savings target. These are examples of measurable goals that contribute to defining success in VA initiatives.
A data-driven approach is imperative for making informed decisions throughout any complex VA initiative. Leverage data analytics in addition to evidence-based practice when establishing the project plan. Analyzing product utilization and clinical outcomes helps identify areas for improvement, while evidence-based practices ensure that product selection and process changes have a solid foundation in clinical research. Consider piloting new products or processes in a controlled environment to gather data and mitigate risks before full-scale implementation.
Lastly, the initiative must be monitored and adapted through continuous feedback. Success in a VA initiative is often a moving target. Continuously track key performance indicators (KPIs) related to clinical outcomes, cost savings, and operational efficiencies specific to the initiative. An adaptive approach allows the team to refine processes and strategies in response to challenges, maintaining alignment with the overall objectives.
This approach to achieving clinical value success in complex VA initiatives will help your healthcare organization navigate challenges, drive positive outcomes, and reinforce the importance of value analysis. Following the suggestions above creates a strong foundation for any VA initiative. Clearly defined success criteria ensures everyone is aligned, progress is measurable, and decision-making is streamlined. Ultimately, this approach enhances clinical value and contributes to the organization’s larger goals of quality care, operational efficiency, and cost savings.
Anne Marie Orlando, RN, MBA, RCIS, CVAHP, Senior Director, Clinical Programs at Blue.Point Supply Chain Solutions; Treasurer, Association of HealthcareValue AnalysisProfessionals
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.
Jonathan Jarashow, CEO and Chief Supply Chain Officer, OmniChannel Health
Hospital supply chains often turn to substitute medical products too quickly, primarily due to various pressures and system limitations. Below is an expanded discussion of why this happens, with real-world examples, expert opinions, and references.
Hospitals prioritize uninterrupted patient care, and supply shortages are particularly disruptive. When key products are on backorder, the urgency to maintain operations often leads supply chain teams to choose available substitutes instead of taking the time to source original OEM products, which can be a longer process.
For instance, at an east coast University Hospital, supply disruptions occur weekly, especially in specialized areas like the OR and Cath Lab. These settings rely heavily on OEM products to ensure optimal patient outcomes. One real-world example involved a 7Fr biopsy sheath, which went on backorder several times. The team initially held back OEM products for specific patients but eventually had to use substitutes, which raised concerns due to anatomical differences. The alternatives performed below the original OEM product’s standard, increasing the risk to patient safety.
Distributors often promote substitutes when OEM items are unavailable, and in some cases, automated substitutions are triggered by the vendor. This limits a hospital's opportunity to check for the original OEM product. Hospitals may rely on these vendor suggestions, skipping the process of searching alternative suppliers that may still have the OEM product.
Hospitals sometimes lack visibility into the broader market of available OEM products. Supply chains are often fragmented, and procurement teams may not be aware of secondary markets or vendors. This is where companies like OmniChannel Health play a key role by offering hospitals access to hard-to-find OEM products through an extensive network of distributors.
Many hospitals work closely with local hospitals and companies like OmniChannel Health to ensure they avoid the premature use of substitutes. The operations team makes proactive decisions about checking OEM availability before switching to substitutes.
Locating original OEM products can require extensive time and expertise, which many hospital supply chain teams may not have, especially during widespread shortages. Hospitals are often managing shortages across multiple product categories, leaving them with limited bandwidth to perform exhaustive searches for OEM items.
When substitutes are introduced, they often require new workflows or clinician training, which can increase the potential for errors. Hospitals might find substitutes easier to procure but risk inefficiencies or patient care risks due to the unfamiliarity of staff with the new products.
An example from a University Hospital Cath Lab highlights this issue. They had long used the Terumo TR Band, but due to shortages, they brought in the Teleflex Vascband as a substitute. Unfortunately, the substitute caused issues such as air leaks, leading to complications like patient bleeding and longer recovery times. This increased the workload for nurses and posed safety risks.
A long time OR supply chain expert points out that managing medical products effectively is critical to ensuring smooth surgical procedures. Even minor delays in receiving critical supplies can cause significant strain on surgical teams, leading to delayed procedures. By maintaining relationships with reliable backup suppliers, hospitals can improve their supply chain resilience and ensure timely access to necessary supplies.
Jonathan Jarashow
The financial costs of using substitutes are significant. Substitutes can be more expensive than OEM products, and expedited shipping adds to the cost. Overstocking in anticipation of future shortages increases inventory value, and once OEM products are available again, substitutes often go to waste. Additionally, substitutes may require new workflows, leading to inefficiencies in both time and resources.
While the goal of hospital supply chains should be to prioritize OEM products for optimal care, the realities of supply disruptions force many to rely on substitutes. Hospitals can mitigate these issues by partnering with specialized companies like OmniChannel Health to source OEM products more effectively and avoid premature reliance on substitutes.
1. MarketScale. (2024, August 30). Hospital Supply Chain Management: How to Find Scarce Equipment and Supplies. MarketScale. Retrieved from https://marketscale.com
2. Advisory.com. (2023, April 20). Hospitals Are Facing an Uphill Battle Against Supply Chain Shortages. Advisory Board. Retrieved from https://www.advisory.com
3. Healthcare Value Analysis and Utilization Management Magazine. (2024, July 9). OmniChannel Health: Solving Sourcing Problems and Saving Big. Value Analysis Magazine. Retrieved from https://valueanalysismag.com
JonathanJarashow,CEOandChiefSupplyChainOfficer, OmniChannelHealth
In 1995, I founded what would become the nation’s largest diabetes magazine. Over two decades, we published over 100 million copies, distributing them through major pharmacy chains such as Walgreens, Walmart, CVS, and Costco, as well as other leading retailers. Our magazines were also sent to diabetes centers in hospitals nationwide. The connections we built with hospital leadership were invaluable, and when the print magazine industry began to decline, we leveraged these relationships to meet the sourcing needs of hospitals.
We recognized the difficulty hospitals faced in sourcing original/OEM backordered, allocated, and low-stock medical products and supplies, and the headaches caused by having to settle for substitute products. These insights led to the creation ofOmniChannel Health.
As an SBA-certified small business, OmniChannel Health prides itself on being small but nimble and highly responsive. We are a trusted, reliable, and AHRMM-vetted secondary distributor that steps in when primary distributors and suppliers can't meet hospitals' urgent needs.
by Medpaper®
In an era where the convergence of technology and environmental responsibility is paramount, eco·pí®️ stands as a pioneering solution at the forefront of sustainable innovation in the healthcare sector. Functioning as a comprehensive platform, eco·pí®️ seamlessly integrates into various facets of medical workflows, optimizing processes and enhancing efficiency. Beyond its technological prowess, eco·pí®️ distinguishes itself by prioritizing eco-friendly practices. From green infrastructure and energy efficiency to substantial waste reduction, eco·pí®️ addresses the urgent need for sustainability in healthcare. This abstract encapsulates eco·pí’s®️ commitment to advancing patient care while significantly reducing the industry's environmental footprint, positioning it as a transformative force for a greener, more efficient, and future
Eco·pí®️ is designed with a focus on the patient experience, aiming to restore dignity and independence in the process of urine sample collection. Whether it's a 3-year-old girl or a 72-yearold woman with Parkinson’s, eco·pí®️ has demonstrated its ability to provide a simple and mess-free solution, giving individuals control over the traditionally challenging task of leaving a urine sample. The device has proven particularly beneficial for patients facing unique challenges such as pregnant or obese bellies, dexterity issues, disabilities, or injuries. In these situations, holding a cup to the urethra can be nearly impossible, creating barriers to the sample collection process. Eco·pí®️ effectively eliminates these obstacles, offering a solution that accommodates a diverse range of patient needs. By empowering patients to gather their urine in a straightforward and hygienic manner, eco·pí®️ contributes to an improved overall healthcare experience. The device ensures that individuals of varying ages and health conditions can maintain independence and control, ultimately fostering a more positive and respectful approach to urine sample collection.
Eco·pí®️ is ingeniously designed to seamlessly accommodate a wide range of cups utilized in the medical field. Its versatile structure includes a bottom part crafted with precision, specifically engineered with two slits to securely hold a small pediatric cup, and effortlessly adapt to a larger cup by tearing along predetermined lines. This thoughtful design ensures adaptability to diverse cup sizes, catering to the varying needs of healthcare settings. The user-friendly process involves the patient or caregiver positioning eco·pí®️ under the urine stream, allowing the urine to flow directly into the lab cup. The innovative design, featuring strategically placed slits, ensures a snug fit for the pediatric cup and effortlessly adjusts to accommodate larger cups. Once the urine is collected, the patient or caregiver can effortlessly remove the cup, facilitating swift and efficient placement wherever necessary. As an eco-conscious solution, eco·pí®️ is crafted from paper, allowing for easy disposal after use. This simplicity not only ensures hygienic urine collection but also contributes to a seamless and sustainable healthcare experience.
Eco·pí®️ has proven its efficacy across a diverse age spectrum, catering to a wide range of patients needs. Acknowledging the challenges associated with providing urine samples, we are driven by a deep commitment to offer a solution that transcends age and health conditions. We understand that leaving a urine sample can be daunting for a myriad of reasons, and our passion lies in providing a device that seamlessly assists anyone in need. Eco·pí®️ stands as a universal aid, ensuring a user-friendly and empathetic approach to urine collection for individuals of all ages and health circumstances.
**Annually, approximately 7 million office visits are attributed to potential urinary tract infections (UTIs), with an estimated cost of urinalysis and treatment without complications reaching $847 million. Considering a reported 15% contamination rate, around 1.05 million cases are potentially contaminated, resulting in additional costs of $127 million due to over-reporting and unnecessary treatment of UTIs. However, by integrating eco·pí®️ into at least 25% of all office visits related to UTIs, accounting for the cost of eco·pí®️, the projected savings amount to an impressive $31,412,500. Beyond direct financial savings, the utilization of eco·pí®️ offers additional medical benefits, including reduced instances of severe kidney disease and related conditions necessitating hospitalization, prevention of catheter-associated urinary tract infections (CAUTIs), and a decrease in various other direct medical care costs. The adoption of eco·pí®️ not only yields significant cost reductions but also contributes to improved patient care and health outcomes.
**This data is the opinion of Barbara Strain and her 43+ years in the lab industry.
Robert W. Yokl, President, SVAH Solutions
Supply chain and value analysis seem like an endless world of projects, initiatives, conversions, problems, recalls, and new product request evaluations that just go on and on. Once you think you have everything taken care of, other problems or initiatives show up. One thing is for sure, there also comes a lot of uncertainty with all these initiatives, projects, and new product requests. You need to know with confidence how you are going to handle these situations strategically to meet your goals and objectives.
Should You Trust Your Gut or Rely on a Proven Benchmarking System?
One of the best tools that I have used over the past 25 years and continue to use is benchmarking. Benchmarking can answer all of your questions as well as show you the right direction you need to be taking your organization. Gut feeling is great, but at the end of the day you will need to know that your gut feeling is in fact correct and that you are not leaving money, performance, or life cycle results on the table needlessly. Plus, you don’t need your Senior Leadership to hire some consultant who comes out of left field and makes you look bad when you should be the one reporting all aspects of benchmarking of your department back to your leaders.
Robert W. Yokl
Below are a few reasons that might make you think further about planning to implement a benchmarking system or enhance your existing system.
The time has come for all Supply Chain and Value Analysis Leaders to employ their own strategic patient volume centric benchmarking system to cover all the bases and then some. What if in everything you did you had multiple angles (reports) to view strategically before you even lifted a finger one way or another? No whims, no guesses, just real facts based on real data - your data!
I sit in VA meetings all the time and when I see a new product request for any given category, I pull up that hospital/health system’s category benchmarks to see where they stand. If they are high in the cohort benchmark range and a surgeon is again asking for additional instrument spend, I let them know this as that is important information for a VA team to know.
Another organization was about to perform a system-wide value analysis review of endomechanical products because their lack of standardization was costing them as they could not attain the best tier pricing. Instead, by using their benchmarks we were able to figure out that it was only one of their facilities that was causing the issue and the rest were close to best practice levels. We even helped them using product level benchmarking on cost per surgery case to show which products were causing the problems (endo-reloads). This saved so much time and effort as nobody had to do any major value analysis review but instead were able to jump right to the root cause at the problem hospital in their health system. It could have taken a VA team months to figure out what their benchmarking system told them in just a few days.
As mentioned earlier, your gut feelings are great, but at the end of the day Supply Chain is a multi-million-dollar business and we need to be more certain about our GPO telling us what tier we are at and that we feel good about our costs in any given category. We need to know where we stand in the over 750 major categories of products we purchase and over 500 of the purchased service categories. Remember, you may have the best pricing in most of your purchase categories, which is great, but there is more to keeping costs in check than the almighty price. We call this savings beyond price which includes managing things like waste, inefficient use, feature-rich products, life cycle cost issues, and value mismatches that can keep your costs high even with the best pricing. Why not uncover the hidden gems right in your backyard?
When you start a new initiative, there is what we call the “Before, During, and After Effect” of what you are about to undertake. As the example above on the endomechanicals highlighted, you will want to check your benchmarks before you take any action to spare yourself unforeseen issues or to
Robert W. Yokl
validate your next steps. Time is too valuable when it comes to making sure you are engaging in the right areas and have the right stakeholders for your initiative.
“A large health system was working on a $650K savings opportunity but took over eight months in their value analysis process. They were not aware that the costs had gone up another $280K in that category during that time frame.”
Don’t disregard the “During Effect” while you are working on an initiative. Things don’t stop happening in the weeks or even months that you are performing a review. Make sure things aren’t getting worse or better during a review. For example, a large health system was working on a $650K savings opportunity but took over eight months in their value analysis process and were taking their time being deliberate, all the while the category’s cost was continuing to increase rapidly during those eight months of analysis. They were not aware that the costs had gone up another $280K during that time frame. If they had been tracking the “During Effect,” they would have been able to prevent that huge increase from occurring. It’s always better to know than to not know.
Lastly, you want to know what the results are after the fact on any change or implementation. There is no better way than to use your benchmark/key performance indicator measures before your initiative starts and then continue to measure against that moving forward, well after the implementation has taken place.
Other than working on contracts before they expire or bidding out categories to gain better pricing, you might think there is not much more proactive you can be versus the normal reactive world we live in in the healthcare supply chain. But if you had measures and benchmarks, you could trend and track your major and minor spend categories and quickly have them tell you where you are trending too high or even trending too low. Using too much product could be a sign of waste, inefficient use, value mismatches, or even product failures that will affect costs and quality. In turn, trending too low in a particular product category could uncover other issues like quality and life cycle optimization. The advantage of being proactive with your benchmark trending and tracking is that it allows you to solve small issues before they become major issues months or even years down the line.
Supply Chain or Value Analysis does not buy anything - it is the department heads and managers whose departments specify the products, services, and technologies that are procured. With any supply chain or value analysis initiative, you are going to need proof that any savings, quality improvement, or conversion’s juice is worth the squeeze. Yes, these department heads and managers
Robert W. Yokl
sit on your VA teams and are all for saving money or improving quality, but at the end of the day, everyone is for change until it comes to their department. Benchmarking gives you proof that will gain the buy-in of your department heads and managers and not allow them to “talk away savings” which they are very good at.
The healthcare supply chain is constantly changing, adapting, growing, and even shrinking in some respects, and it all comes down to the patient volumes that are coming through your doors every week, month, and year. It is important to be constantly measuring and benchmarking your supply chain today and on a continuing basis to in order to know exactly what is changing and how you will address or not address these changes.
It’s impossible to be a subject matter expert in every category of purchase in the healthcare world but benchmarking levels the playing field a bit for you in the sense that you will know a lot about your organization and your benchmarked trends for all of your categories. You can then talk intelligently about these trends and what is and what is not included in your data and even enhance the benchmarking even further with feedback from your true clinical subject matter experts. Everyone wins here and it quickly allows you to engage in a value analysis initiative without having to be that expert every time.
There is nothing better than having full confidence in your supply chain and value analysis efforts as well as the sustained results that you have brought about. I cannot tell you how many times our clients have reached out to us or just went in and ran their latest benchmark report when they had questions about costs being too high or quality being off, etc. This happens often and just telling your leaders that your price is the best is a great thing but being able to tell them that your overall total cost and quality is also excellent is a relief. Some may wonder whether they want to go to this level of detail and perhaps scrutiny on their supply chain and value analysis initiatives. To this I say, wouldn’t you want to know all you can know and use this as a forever insurance policy moving forward? You should know all you can before anyone else even thinks of challenging you.
Benchmarking your own health system at all levels is the best evidence you could ask for as it is your own data formatted in a way that your leaders, department heads, and managers will buy into. Yes, you can benchmark with organizations outside your health system as well, but you can do a whole heck of a lot of good benchmarking and analysis with just using your own data with historical and periodic benchmarking as well as cohorting within your system. As a provider of these solutions, you
Robert W. Yokl
do also have the option to be benchmarked against cohorts that will give you a good idea of where you stand in the marketplace. This is great knowledge and evidence that cannot be disputed because it is yours.
We often talk about seeing the invisible or opportunities beyond price that reside in your supply chain purchases, but how do you really see them? Remember, just because a spend is high in a particular area does not necessarily mean that it is not just a reflection of your patient volumes. When you marry patient volumes to your supply chain in the form of an automated benchmarking system you can then see where the invisible opportunities are hiding in many ways such as year over year analysis, 6- and 12-month trends, cohort benchmarks, system level benchmarks, etc.
These will show you where something different is happening in your 750 major supply categories that you should be aware of. Savings beyond price requires looking at the total cost divided into your patient volume metric, e.g., Balloon Catheter Cost Per Cath Lab Case. If your cost is up year over year but your case volume is flat, then you know you need to initiate a value analysis review.
Believe it or not, supply chain benchmarking tells you about the good, the mediocre, and the bad of what is going on in your supply chain purchases. This is very helpful as you will know what products and services fall into each category so that awareness permeates through your supply chain organization. Granted, there will be major savings opportunities down to minimal savings opportunities, but there will also be areas where you are best in cohort, best in system, and/or are making major strides year over year. The good news far outweighs the bad, but you need to know about the challenges and where you need to do better. Plus, you don’t need to have a contract manager turning a vendor’s screws to weed out an extra 8% to 10% savings that may not be there because you are already 33% better than the next best hospital. On the other hand, if a contract manager knows that you are running 25% higher than your cohort average, they can use that information to really push for better price savings.
Last but not least, in my 32 plus years in the healthcare supply chain and benchmarking for over 25 years, I have seen what is called the Hawthorne Effect when you introduce a health system-wide benchmarking system. In a nutshell, the Hawthorne Effect is that when everyone knows that “big brother” is watching, they tend to pay more attention to things like eliminating waste and featurerich products. They know that Supply Chain and Senior Leadership are now tracking these things and are paying closer attention to this and thus savings happen miraculously in many cases. I have seen this many times, and it can be a reality for you if you implement a benchmarking system.
Robert W. Yokl
In Today’s Supply Chain World, It Is Important to Track Everything and Benchmarking Allows for This
Tracking everything could be viewed as swatting the hornet’s nest that will in effect cause multitudes of new work that needs to be addressed immediately because a CFO wants savings like yesterday. This has not been the case for any of our clients and thus will not be the case for you when you start out with this benchmarking system. But it will give you a whole new level of strategic thinking that you have never had before, which is invaluable. You will then be able to pick and choose the best candidates to start a value analysis review on or decide that you will throw back the high benchmark issues on the department head and manager experts/stakeholders to address. It is that simple, you control the process moving forward. To me, the best part is that you have a benchmarking system with the process you will control on an ongoing basis!
Robert W. Yokl, President, SVAH Solutions
Running a value analysis team or multiple teams can be very challenging to handle but not impossible. Meeting management is an art and science and when you add the element of value analysis into the mix it could become even more challenging. We have developed a simple list of dos and don’ts that you should consider in order to make your own VA team meetings hum.
Take Attendance at Your Meetings – Attendance may seem like a very mundane task that is not necessary in the value analysis world, but it really is. If your team members drop below the benchmark 80% attendance for the year in value analysis team meetings, then are they really an effective team member? Probably not. Even worse, you may have team members that are hovering around 40%, 50%, or 60% attendance. You will want to consider replacing team members who are not going to attend. We found out a long time ago that poor attendance equals degraded engagement which is not what you need in a thriving value analysis team.
Robert W. Yokl
Do Utilize Value Analysis Workflow Software – The time has come to retire the VA team spreadsheet and move on to true value analysis workflow software to manage all of your new product requests, value analysis spend and utilization analytics, VA project management, and your team/ meeting management. Trying to squeeze all these elements into a spreadsheet is nearly impossible but database VA workflow solutions can do all of this and keep everyone on the same page. Look for quicker, better, faster results and get more done in less time with less effort.
“Unburden the VA teams so that they can focus on the most important value analysis work.”
Do Limit the Time of Your Meetings to No Longer Than 60 Minutes – This is going to be tough for many of you, especially with the amount of new product requests that tend to dominate your entire agenda and push it from a 1-hour meeting to over 2 hours. Remember, VA team meetings are not working meetings and instead should be geared toward status updates and decisions. Even if you have a packed agenda, you should be able to roll through it pretty quickly if all of the updates are done quickly and concisely. This may take some training for your team members, but it is not impossible.
Do Always Work to Limit the Amount of New Product Requests – New product requests can become overwhelming for VA professionals and their teams. I have spoken to VA professionals who have stated that they handle over 80-150 new product requests in a year. That is just too many. The moment this VA Pro told me that, my mind started thinking that we need to assist them with reeling that number of NPRs in. There are a number of ways to do this, like limiting the dollar amount that you can submit. For example, it must have at least a $30K annual spend, otherwise it gets handled through normal channels (with some exceptions). What I am saying is that you need to unburden the VA teams so that they can focus on the most important value analysis work, not the $6K annual change on your enteral feeding tube connector.
VA Team Don’ts
Don’t Invite Vendors to Present to Your Value Analysis Team Meeting – The salespeople all think that if they could present to the actual value analysis decision making body in the healthcare organization that they will somehow be able to convince everyone on the team to agree to their offering. However, this is not the case. Your true subject matter experts and stakeholders may not even be on the value analysis team and thus you are going to chew up valuable time of the VA team with these presentations. It is also important to consider how many presentations you could allow with an already full agenda. These presentations need to be made in meetings other than the VA team
Robert W. Yokl
meetings with the true customers, stakeholders, and subject matter experts. Then and only then should the offering move to the VA team in the form of a VA project or new product request.
’t Talk Away Viable
The worst thing that can happen to any optimization is for a department head or manager in a value analysis team meeting to have a kneejerk reaction to a proposed change or initiative and shut it down before any investigations. Remember, some of these department heads and managers also sit on the VA team to watch out for their turf, so they will be the first ones to nix a change just so that no changes are made in their departments. Also, they are leery of looking bad. Remember, the louder the knee-jerk reaction is in a VA team meeting, the more you may want to delve into the initiative further as there may be something there. Don’t let lip service knock out viable initiatives without proper value analysis reviews performed.
Don’t Be One of the First to Have the New Instrument or System – I cannot tell you how many times I sit in VA team meetings and a new product comes along which is totally new to a clinical modality, but the surgeon wants it. There may be an upside if the surgeon helped develop the product, but this is most often done at larger university teaching facilities. There are too many x-factors that could happen with adding a brand-new system/instrument that may or may not have reimbursement in place in your state or with your insurers. It is better to let these brand-new products go until there is more usage, more reviews, and more FDA MAUDE (adverse events) reported before your organization considers adding it. It should not be a no to the surgeon, but a wait to gain more valuable insights.
These dos and don’ts may seem obvious, but we see them happening often. Take a step back and see what is challenging your VA team’s productivity and performance. Even if it is not one of the actions listed above, you can still do something positive about it now. It is always better to adjust, fine-tune, and optimize how you run your VA team meetings.
Grant Luke, Strategic Account Manager, CapExpert
Hospitals and surgery centers operate in a complex environment where delivering exceptional patient care must be balanced with stringent financial constraints. A crucial factor impacting both, which is often overlooked, is the effective management of capital equipment lifecycle data. These facilities rely on a vast and intricate network of technology, ranging from advanced imaging systems and surgical robots to essential patient monitors and infusion pumps. However, outdated or inefficiently managed equipment can trigger a cascade of problems that negatively impact both the financial health of the institution and the safety of patients.
Many healthcare facilities still rely on outdated, manual methods for tracking and managing their capital equipment. This reliance on spreadsheets, paper records, and fragmented systems can create a number of significant challenges:
Reactive Maintenance: Without a centralized system for proactive maintenance, equipment is often only addressed when it breaks down. This reactive approach leads to costly emergency repairs, disruptions to workflows, and potential delays in patient care. Imagine a critical piece of imaging equipment failing mid-diagnosis, forcing rescheduling and potentially compromising patient outcomes.
Compromised Patient Safety: Aging equipment can pose significant safety risks. Malfunctioning devices can lead to inaccurate diagnoses, treatment delays, and even medical errors. Manually tracking safety inspections and preventative maintenance across a wide range of equipment is inefficient and prone to human error, increasing the likelihood of overlooked maintenance needs and potential safety hazards.
Missed Financial Opportunities: Hospitals may be missing out on substantial cost savings by not optimizing their equipment’s lifecycle. This includes failing to identify redundant equipment, neglecting to explore trade-in options for older models, or missing out on valuable tax benefits associated with depreciation. Without a comprehensive overview of their equipment inventory, hospitals may be losing valuable financial resources.
Inefficient Resource Allocation: Without a clear picture of equipment usage patterns, hospitals may be over- or under-utilizing certain devices. This can lead to unnecessary purchases of redundant equipment, increased storage costs, and inefficient scheduling that impacts patient flow and operating room utilization.
Compliance Risks: Healthcare facilities must adhere to strict regulatory requirements regarding equipment maintenance and safety. Manually tracking compliance-related data is time-consuming, prone to errors, and makes it difficult to demonstrate adherence to these regulations during audits. This increases the risk of non-compliance, potentially leading to hefty fines and damage to the institution's reputation.
Modern technology solutions offer a powerful antidote to these challenges, providing the tools to transform equipment lifecycle management. Here's how these solutions can bridge the gaps and optimize efficiency:
Proactive and Predictive Maintenance: Sophisticated software allows for automated preventative maintenance scheduling, reducing downtime and extending the life of equipment. Real-time alerts ensure timely service and prevent costly breakdowns. Advanced systems can even leverage data analysis and machine learning to predict potential equipment failures before they occur, allowing for proactive intervention and minimizing disruption to patient care.
Optimized Utilization: By tracking usage data across the facility, technology can help identify underutilized equipment that can be repurposed to other departments or sold to recoup costs. This data-driven approach optimizes resource allocation, avoids unnecessary purchases, and ensures that equipment is being used to its full potential.
Streamlined Compliance: Automated systems help healthcare facilities meet regulatory requirements by simplifying documentation and providing audit trails for all equipment-related activities. This reduces the risk of errors, ensures compliance with industry standards, and facilitates a smooth and successful audit process.
equipment, hospitals can make strategic decisions that optimize their capital expenditures.
Cost Reduction: By optimizing equipment lifecycles, technology solutions help hospitals reduce maintenance expenses, avoid unnecessary purchases, and maximize the value of their capital assets. This translates into significant cost savings that can be reinvested in patient care, facility improvements, or other strategic initiatives.
While cost savings are a significant benefit, technology-driven equipment management also contributes to improved patient safety and satisfaction. By ensuring that equipment is wellmaintained, functioning optimally, and readily available, hospitals can provide a higher quality of care and reduce the risk of adverse events. This creates a safer and more positive experience for patients, ultimately enhancing their trust and satisfaction.
“While cost savings are a significant benefit, technology-driven equipment management also contributes to improved patient safety and satisfaction.”
In conclusion, effectively managing capital equipment lifecycle data is paramount for hospitals and surgery centers striving for financial sustainability and optimal patient care. By embracing modern technology solutions, healthcare facilities can overcome the challenges of traditional equipment management, unlock significant savings, and enhance the quality of care they provide. This investment in technology is an investment in the future of healthcare, enabling institutions to deliver the best possible care to their patients while ensuring their own financial health and sustainability.
GrantLuke,StrategicAccountManager,CapExpert
Husband to a surgery center nurse and father of three girls, Grant started in medical device sales before moving to ASC scheduling software, Casetabs, after seeing his wife use the app at her surgery center. Grant then served as the Facility IT Project Manager at SCA Health, with a specialization in EHR evaluation and implementation. From there he worked as the Director of ASC Applications at USPI, serving the 520+ surgery centers and surgical hospitals in their portfolio.
Today, Grant is back in Business Development working for CapExpert, an AI-assisted capital equipment lifecycle management platform. He enjoys problem-solving with his customers, and more importantly, seeing them be successful in achieving their goals and initiatives.
When he's not working, you can find him playing in the backyard with his girls, or driving an ATV on their land in NE Texas.
grant@capexpert.io
Mark Copeland, Vice President, Sales, 3T Medical Systems, Inc.
They can make or break your sales when dealing with a value analysis team in our current healthcare environment. The process is simple, get the VAC pack right and your chances of a sale are that much greater, get it wrong or ignore submitting a VAC pack and your chances will be seriously diminished. There is no getting around the fact that healthcare value analysis teams are requiring that you submit specific information to them in order for them to assess, evaluate, and validate that your product or service is what it should be and that all elements are there in order for them to perform this analysis. That my friends in the briefest terms is a VAC pack and the importance they have for you and your health system customers.
Used when a new vendor or a new product request is submitted, a VAC pack is a package informing a value analysis team about the new product being requested, the new product’s clinical research, and the costs associated with it. Also included should be product part numbers, pricing, and all elements needed for Supply Chain to finish due diligence on the vendor. Think of the VAC pack as a product/ vendor “ resume”, if you will.
ButwhatexactlyshouldgointotheseVACpacks?
Just like in stand-up comedy, the first rule of VAC packs is to know your audience!
Who’s reading these things anyway? Take a step back and think about this concept for a minute. The only people in this account who know ANYTHING about our product might be a few doctors, a couple of nurses, and…us. We don’t ever want to assume ANYONE in our new VAC pack audience knows anything about us, our company, or our product.
“VAC members often prepare and screen for the VAC meeting by reading the VAC pack submission, and if the information is so deep in the clinical “weeds” that it gets lost, they will be confused. When we confuse, we lose!”
Knowing this, the goal of our VAC pack is to allow people who are NOT our clinical champions to understand what our product does and why the health system or Ambulatory Surgery Center should consider our proposal.
However, if we write a VAC pack with only our clinical champion (say, a surgeon) in mind, the value analysis committee is lost three seconds into our document. Most VAC members don't know the difference between subcutaneous wound closure and deep fascial closure, or a video laryngoscope from a duodenoscope. Why would we assume they do? And why should they?
Most VAC members come from different disciplines and often are businesspeople or Supply Chain, versus highly trained and well experienced doctors and nurses.
We want to focus on the problem the health system, hospital, or ASC faces that our product solves. We must fight the urge to talk about our product (it’s hard, I know)!
In simple terms, we should be prepared to describe the issue occurring either for the doctor, nurse, patient, or administrator and how the problem manifests. How many departments does the problem affect? Does it jeopardize patient care? Does it take up a lot of valuable staff time? Frustrate important revenue-generating surgeons?
We want the VAC members to see the problem very clearly in their mind’s eyes!
Copeland
The Third Rule of VAC Packs: Tell VAC the Investment Required to Solve the Problem AND Show Our Work
The VAC team wants to understand the economics of their decision and we as vendors should be spelling those dollars and cents out in detail. Acquisition prices, service costs, disposables, estimated utilization numbers…all of it, out on the table. We make it as clear, accurate, and transparent as possible. Who wants to get a surprise bill at the end of the year? No one.
To be clear, our analysis doesn’t have to be a Harvard Business Review-level deep dive, but our calculations need to be realistic and conservative. Let’s explain the investment or acquisition price is X but the savings of time, labor, patient outcomes, etc. saves MONEY.
We will also be sure to include our appropriate codes (like ICD-10, CPT, and DRG where appropriate), HCPCs numbers, GPO status etc. to make the process easier AND credible. I know that sometimes the regulatory teams of our companies don’t like the coding being included, so we will follow our company’s policy. But whenever possible, we will include what we can to make the revenue integrity team’s job as easy as possible.
And last but not least, we should ALWAYS include our simple economic calculator used to estimate our economics so that the VAC team can check our work or calculate the problem themselves! We are hoping to be a trusted partner with these healthcare facilities, and we are adamant about letting the VAC team review the numbers to the team’s satisfaction!
When speaking about clinical benefits of our product to the value analysis team, our VAC pack should educate on the level we would use for someone who's NOT in the clinical setting. We make our messaging simple, then make it even simpler.
Now we can give our message the real stress test. We talk about our product and what it does at the dinner table with friends who aren't in the business. Can they understand what we are describing?
Our goal is to be brief, clear, accurate, and attention-grabbing. If needed, our clinical champion can go deeper as he or she is the subject matter expert. The clinical champion is usually EXCELLENT at diving deep, because our champion lives the subject matter every day and has years of experience and knowledge.
We stay SIMPLE. Let the champions go DEEP.
Mark Copeland
Copeland
Our VAC pack should have all the essentials needed if the VAC team decides to spend more time or provisionally approve moving forward with our product. But bringing in a new vendor isn’t as simple as we in the medical device industry think the process is.
Remember when you bought your first house? Remember all the documents you needed to sign? Remember all of the background checks, home inspections, mortgage insurance, title reviews, etc.? Remember all the fun stuff?
“There are several important boxes to check before we can be brought in as a trusted supplier. We should be thinking, “What would their team need to do due diligence on our company and product?”
As a new vendor, we need to be thinking the same exact way. There are several important boxes to check before we can be brought in as a trusted supplier. We should be thinking, “What would their team need to do due diligence on our company and product?”
Let’s face facts, value analysis teams need our VAC packs to be accurate, well thought out, and on point on every topic of the sales and value analysis approval workflow process. If you think that a VA team is just trying to be difficult, then think again. They too are required to have all this information by their leaders and internal departments. By following these five immutable rules for VAC pack success, you will not only help yourself but your health systems with smoother, more efficient evaluations of your products you offer.
Mark Copeland is a 28-year healthcare sales professional with the last 20 spent in startup medical device companies.
His company, 3T Medical Systems Inc, manufactures and sells innovative medical devices to health systems globally, and Mark teaches companies how to present their new product requests in a way that meets the value analysis requirements.
Contact Mark at mcope67@gmail.com for more information, or visit ValueAnalysisExpert.com.
mcope67@gmail.com (717) 579-8144
Tim Ingram, Sr. SME, Supply Chain Management, Paradigm Venture Group
I have worked with several GPOs, attended their conferences, presented, and participated in new technology committees, helping create guidelines and policies for regional and national purchasing groups. I have met some interesting people, and they have played an integral role in some of my successes within healthcare.
Throughout the years, I aim to have offered significant insights into the challenges of Supply Chain Management. With more than 43 years of experience in the field, I've observed the increasingly intricate relationship between healthcare and group purchasing organizations (GPOs). There are certain areas that necessitate further examination.
Group purchasing organizations (GPOs) have been a part of the U.S. healthcare system for over a century. They gained prominence in the late twentieth century by consolidating hospital purchasing. However, their performance and value have been subject to scrutiny. Let’s explore both sides of the argument:
• GPOs aggregate purchasing power, negotiate contracts, and secure discounts on medical supplies, pharmaceuticals, and equipment.
• Hospitals benefit from cost savings, streamlined procurement processes, and access to a wide range of products.
“Rural systems struggle to obtain competitive pricing compared to larger systems solely because of market share and volumes.”
• The total amount of dollars saved annually by GPOs is reported directly from the GPOs and not specifically from the healthcare systems. The definition of "savings" is very subjective and can be manipulated statistically.
• This figure is debatable when you measure potential savings versus actual savings within healthcare. What GPOs report and what is conveniently omitted is who is receiving the best pricing and why. Many of the largest health systems that command competitive pricing also report higher revenue, whereas rural systems struggle on both sides of the equation.
• When you lump healthcare into one bucket and fail to demonstrate the actual success of rural hospitals vs. larger systems, the data becomes murky and skewed in favor of the GPOs. Rural systems struggle to obtain competitive pricing compared to larger systems solely because of 1) market share and 2) volumes.
• GPOs offer regional purchasing group (RPG) memberships; however, the larger systems within these RPGs receive additional monetary incentives for their participation because of the market size.
• Closer reviews of GPO surveys require more scrutiny and analysis. Many pro-GPO reports are dated and originate from non-healthcare settings (Academia, Consultancies, or the GPOs).
• Some critics argue that GPOs may hinder value analysis by limiting competition and innovation. This debate is written in the fine print of membership agreements and vendor contracts. When vendors are not allowed to negotiate contracts with GPO members, hospitals are isolated from receiving competitive pricing and forced to use GPO contracts or seek out non-GPO vendors.
Tim Ingram
• Allegations of exclusionary agreements and anti-competitive practices have surfaced. Bundling agreements are a perfect example of vendors' and GPOs' anti-competitive behavior. They have a 3 to 5-year commitment, and it is almost impossible to cancel from the customer side of the agreement. These agreements limit innovation and prevent customers from moving to more competitive agreements with other vendors.
• Concerns exist about access to innovative technologies and potential conflicts of interest. Vendors have stated that GPO administrative fee requirements (1.5% to 3%) directly impact unit costs and the bottom line. These additional costs are passed to the user. GPOs are projected to reach a 10% revenue growth by 2029, while many hospitals struggle to forecast 3%. This type of success on one side of the fence raises eyebrows.
No one denies that GPOs play a crucial role in cost management; their impact on value analysis must be considered. Hospitals must weigh the benefits of cost savings against potential limitations on choice and innovation. Collaborative efforts between GPOs, hospitals, and regulatory bodies can help strike the right balance. Customers are rarely included in the strategic awards of contracts, and what is provided online is a truncated version of the much larger relationship between GPO and vendor.
It's important to remember that group purchasing organizations (GPOs) function differently across different types of hospitals, which requires a combined analysis of their impact. Contracts may legally affect specific customers. Non-profit hospitals typically fall under regulations designed to shield industries from anti-competitive practices, but they are not immune to all antitrust examinations. Such scrutiny focuses on HOW contracts are executed and WHY a particular vendor was selected. Customers are assumed to agree to contracts with full knowledge of the Terms and Conditions.
• Value analysis assesses the clinical and economic impact of products. What if a GPO contract contradicts this analysis?
Tim Ingram
• Hospitals evaluate whether a product improves patient outcomes and justifies its cost. What if the GPO agreement does not align with the VA analysis?
• GPOs may limit choice by favoring contracted suppliers, potentially hindering innovation. The value analysis could find a bundle agreement not in the system's best interest.
• Hospitals must weigh cost savings against clinical effectiveness. What is best for the patient and hospital could fall outside the GPO agreements.
• Ensuring access to innovative technologies while managing costs is challenging. There could be non-contracted vendors who meet or exceed the contracted vendor's quality and price.
Hospitals must weigh the benefits of cost savings against potential limitations on choice and innovation. Collaborative efforts between GPOs, hospitals, and regulatory bodies can help strike the right balance. Customers are rarely included in the strategic awards of contracts, and what is provided online is a truncated version of the much larger relationship between GPO and vendor.
The challenge in comparing group purchasing organizations (GPOs) with healthcare value analysis stems from the statistical interpretation of cost reductions. It involves balancing cost savings against clinical effectiveness and innovation and defining what constitutes "savings." Let's delve into this:
• Cost Savings via GPOs: GPOs award and renew vendor contracts every month. Competing definitions/reporting of savings, cost avoidance, cost effectiveness, cost containment, and value analysis can be confusing and contradictory.
• GPOs Negotiate Bulk Purchasing Contracts, Securing Discounts for Hospitals: On paper, the GPO pricing is negotiated below the book price. If vendors increase book prices by 5 to 7 percent per year, is the GPO reducing costs or reporting statistical increases? If hospitals report increased operating costs (supply expenses), how can GPOs report it as "savings?" NOTE: It is neither cost avoidance nor cost-effective; it disguises cost increases as savings.
• Cost Avoidance and Cost-Effectiveness Dilemma: Both concepts are valuable for financial management but should be distinct from actual cost savings or tangible reductions in current spending. Misrepresenting cost avoidance or cost-effectiveness as cost savings can lead to a distorted view of an organization’s financial health and performance.
Tim Ingram
• Hospitals Benefit from Reduced Costs of Medical Supplies, Pharmaceuticals, and Equipment: Again, it is all in how we define savings.
• CostContainmentisCrucialforFinancial
Stability: When compared to cost savings, which is the actual reduction of current spending, it’s clear that cost containment, avoidance, and effectiveness are more about managing and optimizing costs rather than simply reducing them. Cost containment is the overarching strategy to control costs without sacrificing quality. In contrast, cost avoidance and cost-effectiveness are tactics used within this strategy to prevent future costs and maximize the value of current spending, respectively.
“Hospitals must balance cost savings with clinical effectiveness. The optimal choice for both patient and hospital may not align with GPO agreements.”
• Value analysis evaluates the clinical and economic effects of products. What happens when a GPO contract conflicts with this analysis? This can become an epic debate between members and the GPO.
• Hospitals determine if a product enhances patient outcomes enough to warrant its expense. What occurs if the GPO agreement diverges from the value analysis?
• GPOs might restrict options by preferring contracted suppliers, which could impede innovation. The value analysis committee might reveal that a bundled agreement is not in the best interest of the system.
• Hospitals Must Balance Cost Savings with Clinical Effectiveness: The optimal choice for both patient and hospital may not align with GPO agreements.
• Securing Access to Cutting-Edge Technologies While Controlling Expenses is a Complex Challenge: Vendors not under contract might offer quality and pricing that match or surpass those of contracted vendors.
• Risk Mitigation: Local agreements outside the GPO could become risky because they lie outside the protective realm of the GPO and all the relationships (distribution) that come with GPO agreements.
Tim Ingram
Healthcare must reconsider and pose more challenging, insightful questions concerning the definition of savings. Collaborative efforts are crucial for maximizing GPO benefits and value analysis. It's important to remember that the objective is improving patient care while preserving financial viability.
To truly grasp the motivation of GPOs in relation to revenue, one must consider a key question: What incentives exist ( ) to discourage GPOs from steering towards their contracts and to minimize costs and expenditures within their agreements?
Healthcare, it's okay to stand up and say, “Hey GPO, we like what you have done, but it's not good enough. We are seeing staff reductions, hospital closures, increased costs, and reduced reimbursements, but you are reporting record profits............is that fair?”
Think about it.
Tim Ingram has had a remarkable 40-year career in supply chain management, which is marked by his visionary leadership and unwavering commitment to excellence. He has led operations in over 22 hospital systems, setting new benchmarks for success through his strategic guidance and operational skills.
Tim has demonstrated exceptional leadership through team building, achieving national benchmark results, and inspiring his teams to deliver outstanding operational outcomes within the healthcare supply chain.
His expertise in strategic sourcing, contract management, and compliance has been pivotal in his roles. Tim's ability to exceed performance indicators has led to repeated recognition and rewards from his leadership teams for his exceptional contributions.
He is the Sr. Subject Matter Expert in Supply Chain Management for ParadigmVentureGroup.
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