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Description: Special Healthcare Supply Utilization Management Issue - Insights, Best Practices and Advanced Strategies You Can Use To Up Your Value Analysis Game

Healthcare Insights Best Practices and Advanced Strategies You Can Use To Up Your Value Analysis Game FALL 2013 ISSUE Magazine In This Issue Page 9-- Supply Utilization Myths Page 16--Utilization Practice Change Page 34--Is Poor Communication Slowing Your VA Process Special Utilization Management Issue Fall 2013 Published Healthcare Value Analysis Magazine by Strategic Value Analysis in 1 7% to 15% Savings Guaranteed Beyond Price within 12-18 Months savings business easier just got The Just Released Version 5.1 Supply utilization savings detector you can count on at a fee that won t break the bank. Risk Free FREE Test Drive UTILIZER Dashboard Open a Whole New World of Savings Only Pay If It Works Guarantee TRY IT FREE 2 www.StrategicVA.Com Utilizer.htm Fall 2013 Healthcare Value Analysis Magazine contents Healthcare Value Analysis Magazine Healthcare Value Analysis Magazine is published quarterly by Strategic Value Analysis in Healthcare P.O. Box 939 Skippack Pa 19474 Utilization Myths Misunderstandings and Mistakes Phone 800-220-4274 FAX 610-489-1073 bobpres ------------------------ Editorial Staff Publisher 9 Supply Utilization Myths Misunderstandings and Mistakes Why utilization savings are still illusive for most healthcare organizations Robert T. Yokl bobpres ------------------------ Utilization Equals Practice Change Managing Editor Robert W. Yokl ryokl 16 Utilization Practice Change How to change your customers minds and hearts with your Value Analysis Program ------------------------ Senior Editor Patricia A. Yokl ------------------------ 23 How Often Should Your Value Analysis Teams Meet The more often you meet the better for peak performance Editor Danielle DeShong Copyright 2013 Strategic Value Analysis in Healthcare. All rights reserved. Reproduction translation or usage of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without permission of the copyright owner is unlawful. For permission call fax or email Robert W. Yokl Managing Editor Phone 800-220-4271 FAX 610-489-1073 E-Mail ryokl for approval to reprint excerpt or translate articles. How Often Should VA Teams Meet 39 Before During and After The Value Analysis Study Why it is important to merge VA with utilization Fall 2013 Healthcare Value Analysis Magazine 3 From the Publisher s Desk Supply Chain Expense Management It s not about price any longer Robert T. Yokl More and more supply chain and value analysis professionals are getting it It s not about price any longer. After more than 50 years of GPOs systems and IDNs squeezing prices until they squeak there is very little left in price related savings to be obtaining today tomorrow or even in the near future. We are now in a maintenance (i.e. monitoring compliance and vigilance) mode when it comes to prices. It should be our goal to try to keep our new pricing below the rate of inflation for any given year. That s all we can hope for into the next decade to contain our prices. On the other hand there is a whole new world of savings in supply utilization management that most healthcare organizations aren t attacking. Yes some hospitals systems and IDNs stumble over some utilization savings from time to time. However very few are actually scientifically targeting their utilization misalignments as they have been doing for years with their price savings opportunities. It s now time for supply chain and value analysis professionals to change their cost management direction by as much as 360 degrees before your price savings dries up completely Most healthcare organizations shy away from utilization management because they believe it requires more work than their price related projects when it fact most utilization misalignments can be identified and fixed without much effort. For instance we recently pointed out to one of our clients with data from our utilization dashboard that their disposable neonatal Oxisensors utilization was three per neonatal patient day. It was quickly identified that the disposable neonatal Oxisensors their OB department was buying had adhesive strips that weren t holding up during their patients bathing or treatments thereby needing frequent replacement. The solution Reusable Oxisensors that would hold up much better adhesion for many days at half the cost. As you can see you don t need to spend hundreds of hours tracking down and eliminating your utilization misalignments if you have the right data and some commonsense to come up with a lower cost alternative. By the way if this client hadn t fixed this neonatal Oxisensor value mismatch it would have cost them tens-of-thousands of dollars on just one product annually. Robert T. Yokl can be reached by phone (800-220-4274) or by e-mail at bobpres with your questions comments or counter-points to his editorials or anything else that peaks your interest in this issue. Fall 2013 Healthcare Value Analysis Magazine 4 You could be leaving up to 11% to 18% in new supply savings on the table untouched BenchPlusManager Does your team have the visibility and control over your purchase services Three easy steps to quickly ring the towel dry on these multi-million dollar expenditures... 1. Build a case for change Show your C-suite how much they are spending and what the potential savings (11% to 18%) would be if you were to aggressively attack the multimillion dollar expenditures that are ready to be harvested. Or let BenchPlus do it for you 2. Centralize all purchase service contracts We recommend that all of your purchase service contract documents be archived and administered by your materials management supply chain department. If the workload justifies it you will need to hire a contract administrator to manage control analyze bid or negotiate these contracts. However this very small investment if required will yield a high ROI in a very short time. Or archive w BenchPlus 3. Benchmark all purchase service contracts This will ensure that your purchase service contracts total lifecycle costs .com are within acceptable limits. How could you know if there are savings opportunities if you don t quantify them and have a roadmap to start saving This shouldn t be a one time event but instead a continuous process. Or BenchPlus can do this for you too Fall 2013 Healthcare Value Analysis Magazine 5 From the Managing Editor s Desk Utilization is Not a New Concept but How We View and Attack It Is Robert W. Yokl The other day I was browsing through my copy of the Charles Housley (Bellwether League Honoree 2008) edited book Product Standardization and Evaluation which was published back in 1985. This was a compilation of best practice articles from various healthcare purchasing and materials management leaders at that time. What amazes me with these best practices is that many of the strategies tactics and ideas still hold true today and with small modification can be employed effectively. I took notice to a number of articles that pertained to managing usage as it was called back then. Today we refer to usage as utilization . It is fun to have this book in my library and I highly recommend it be in yours too. Just like a good song great strategies and ideas do stand the test of time. Even back in the mid-1980 s our healthcare supply chain leaders were writing articles about managing utilization but when you look at it high utilization in your supply chain has not changed. Yes the product master files have gotten larger and the products more complex but the fact is that using more product than you expect to use is going to drive your costs up. If you project to use 10 000 widgets on your new contract implementation that is going to save you 15% on new pricing but with the new implementation your annual usage utilization increases by 22% I have got news for you your new contract is not saving you a dime but is costing you money Front line strategies have always been to try to knock down as much of the cost overruns with the best prices and contract terms but a good price will only go so far. You need to have strategies and systems in place to attack the usage utilization. First you must come to the realization that utilization is a growing issue that is not going away in our supply chains. I like to use the analogy of the hospital supply chain being a big Victory Garden with the products and services being the various flowers fruits and vegetables that we manage every day. You have to realize that every garden no matter how pretty or well-maintained has weeds. The weeds represent the regression the unforeseen cost overruns the waste the product misuse and alike. Instead of saying that there are no weeds in our garden when every garden has weeds we should put our efforts into picking these weeds as fast as possible and moving on. But we must always be on the lookout (tracking trending and monitoring) for new or old weeds popping up in our value analysis programs. Back in the 1980 s they had weeds (utilization usage misalignments) and in 2013 we still have weeds. Yes I can say with certainty that we have had weeds every year in-between. We need to now take on these weeds as a serious threat to our bottom lines and start eliminating managing and controlling the needless waste of our supply chain dollars. We need to act before we end up having to lay off people when we could save their jobs by eliminating the millions of dollars in utilization cost overruns in our supply chains. Robert W. Yokl can be reached by phone (800-220-4271) or by e-mail at ryokl with your questions comments or counter-points to his editorials or anything else that peaks your interest in this issue. Fall 2013 Healthcare Value Analysis Magazine 6 Value Analysis News Revised FREE Supply Chain Expense Mgt. Book Offer SVAH is offering a newly revised FREE electronic book Your Targeted Blueprint for Supply Chain Expense Management reimbursement of all your products and procedures or you could be losing a bundle of money. (Radiology Today Magazine September 2011) How is Your Hospital Rated Success by Robert T. Yokl. This book will Consumer Reports detailed their surgery teach you the little known secrets to dra- quality ratings on 2 463 hospitals nationmatically reduce your supply chain ex- wide in their September 2013 issue. CR s penses (beyond price) that have been focus was surgeries only not overall outhidden from your view until now. What comes. We wanted to see which hospithis book is not is the kind of warned tals did well across a broad range of surover clich -ridden price-focused advice geries states their survey. The study you have been getting elsewhere. Bob T. was based on the percentage of Medicare Yokl would never have it that way You patients undergoing surgery who die in can obtain your FREE copy by e-mailing the hospital or stay longer than expected. Bob T. Yokl at bobpres Neurovascular Reimbursement Low in Some Cases The Radiology Today Magazine reported that the costs of treatment is higher than reimbursement in some neurovascular cases. In some cases the costs of procedures were as much as 50% more. For instance treatment without complications (coiling) was 25 734 whereas reimbursement for this procedure was only 23 574. This is why you must know the Fall 2013 CR looked at the results of 27 types of surgeries (back surgery replacement of hip or knee angioplasty carotid artery surgery etc.) which they combined into an overall surgery rating. The study s scope was from 2009 to 2011 and included 2 463 hospitals in all 50 states. The top five hospitals were Anne Arundel Medical Center MD Christ Hospital OH Enloe Medical Center CA Greater Baltimore Medical Center MD and Oklahoma Heart Hospital OK. 7 Healthcare Value Analysis Magazine Are You Focusing on What Matters Most Price and standardization are important up to a point but if you aren t focusing your supply chain expense management efforts on utilization management -- where it matters most -- you are losing the opportunity to save 7% to 15% on your total spend...period Insidious Effect This matters because if you have obtained the best price and then standardized on a commodity but your utilization of this same category of purchase is off the charts you are losing all the savings you have gained to date. see your utilization misalignments with the naked eye. Only with advanced technology like our UTILIZER DASHBOARD can you be assured that all of your waste inefficiency misuse and misapplication of your products services and technologies can be captured. Slippery Slope We often talk about utilization Dig and Drill Deeper One of our clients has reduced management in these terms If the usage of their isolation statement because FREE Demo Today not now when We can make this gowns by 112 326 annually by Sign up for a FREE demo today to utilization reining in the wasteful consump- see for yourself how you can fotion on this product. If left unmanaged this product alone management is the only savings area left in your vineyard. Not only has your low-hanging fruit been would have done considerable damage to their healthcare or- picked and standardization sub- ganization s bottom line. stantially achieved but now your pricing is slowly disappearing. This is no longer conjecture it is a What makes this situation worse is that it is almost impossible to cold hard fact. Fall 2013 Healthcare Value Analysis Magazine Technology is the Answer 8 Feature Article Robert T. Yokl Supply Utilization Myths Misunderstandings and Mistakes Why utilization savings are still illusive for most healthcare organizations Although the term utilization management seems to be understood by some supply chain managers and value analysis practitioners in reality there are still too many myths misunderstandings and mis-takes about this new and emerging disciple. They are holding back massive new and better savings for our nation s hospitals systems and IDNs. We need to clearly understand this new savings source if we as an industry are going to survive the winds of change in our healthcare marketplace. Utilization Myths A myth is a half-truth sometimes called fiction about a person or a thing that has gained acceptance over the years as being true. Supply utilization has taken on this mantel in some supply chain circles for the following three reasons Fall 2013 Healthcare Value Analysis Magazine 9 Feature Article ings that isn t price savings. Robert T. Yokl 1. It is believed that supply utilization is a term that can apply to just about any sav- To the contrary supply utilization management is about uncovering specific misuse misapplication and value mismatches in your supply streams that requires a new vigilance on how your customers are employing the commodities you are buying for them. 2. Supply utilization isn t something new since supply chain managers and value analysis practitioners have always looked for waste and inefficiencies in the products services and technologies we have been buying. If this statement was true why aren t there more savings identified as utilization savings in this category Over the last few decades we have reviewed hundreds of savings reports and can tell you that only a handful have reported utilization savings. The truth is As an industry we are not focusing on this savings category as of yet 3. There are very little savings opportunities to be uncovered in this supply chain expense operational area. Since very few healthcare organizations are actually measuring the savings opportunities of their product service and technology utilization there is no way they can state that there is very little savings in this category. However we know from our own utilization savings measurement over the last two decades that there is 7% to 15% to be saved at any healthcare organization in the country. Fall 2013 Healthcare Value Analysis Magazine 10 Myths die a slow death but eventually expire when the irrefutable facts are laid out for all to see. Feature Article Robert T. Yokl Myths die a slow death but eventually expire when the irrefutable facts are laid out for all to see. If you believe any of the myths about supply utilization management we have just debunked please look at the cold hard facts that refute these claims. It is to your advantage to do so Utilization Misunderstandings Beyond myths there are other erroneous misunderstandings about supply utilization management that need to be clarified and dispelled as follows Supply utilization management is someone else s job. Misunderstanding 1 Supply utilization management is someone else s job. Supply chain management s job is to manage and control all products ser- vices and technologies from acquisition to disposition . When you buy into this definition of supply chain management you can easily see that utilization management falls under the realm of supply chain management. This is because supply chain management is the only hospital department that has (or should) have unlimited visibility over its hospital s supply chain expenses. No other hospital department has this visibility Misunderstanding 2 Value analysis teams are focused on utilization management. It has been our observation from working with hundreds of hospitals systems and IDNs over the last three decades that value analysis teams whole focus is new product requests and or GPO contracts. They aren t looking at the utilization of the products services or technologies their hospital system or IDN is buying. Due to this fact millions of dollars are lost each year at facilities that are ignoring this new and better savings source. Fall 2013 Healthcare Value Analysis Magazine 11 Feature Article Misunderstanding Robert T. Yokl 3 Spend managers can identify my utilization misalignments. Spend managers were developed to benchmark your prices to uncover your competitive gaps not your hospital s supply utilization misalignments. Therefore this one tool is useless in managing and controlling utilization of your products services and technologies. That s why you need more than one power tool like a master carpenter to get the job done right the first time Don t get caught in this cycle of misinformation get the facts from credible sources. All new disciplines like supply utilization management are misunderstood at first until more accurate information is provided to the marketplace to clarify and dispel misinfor- mation that has arisen over time. Don t get caught up in this cycle of misinformation get the facts from credible sources to keep your supply utilization management program on track and on target. Utilization Mistakes When contemplating your own supply utilization management program it makes sense to avoid the three biggest mistakes supply chain managers and value analysis practitioners make in establishing their programs Fall 2013 Healthcare Value Analysis Magazine 12 Feature Article 1. Robert T. Yokl Not utilizing technology to ferret out supply utilization savings. We have found that you can t uncover your supply utilization misalignments with the naked eye. It requires specialized technology built to classify identify and root out the cause of waste and inefficiencies in your supply streams. Spreadsheets won t help since they are a static tool too labor intensive and cumbersome to be helpful in your search for new and better savings. 2. Not shadowing your customers to understand why your hospital practices are different. Too often hospitals will identify a supply utilization savings but not know why it is happening. This is when you need to visit the customers that are using the commodity and then observe how they are employing the product service or technology. Without fail this exercise will lead to answers to your questions about utilization misalignments. Sitting at your desk or discussing this anomaly at a value analysis team meeting won t get you the answers you need to solve this problem. You need to be proactive in doing so 3. Not using data (charts graphs and benchmarks) to convince your customers to change their costly behaviors. When you do identify verify and observe a supply utilization misalignment you then need to convince your customers and stakeholders of the need Fall 2013 Healthcare Value Analysis Magazine 13 Feature Article Robert T. Yokl to change their costly behavior. This is most successfully accomplished by using charts graphs and benchmarks to show your customers that they re an outlier. Since no department head or manager likes to be considered an outlier they will quickly conform their behavior to that of their peers. This tactic works 98% of the time Learn from the mistakes of others to shorten your learning curve. We all make mistakes slipups and gaffes in our supply chain business but why not learn from the mistakes of others as we have outlined herein to shorten your learning curve. It s the fastest way we know of to become an ror. expert in supply utilization management without the slow painful process of trial and er- Illusive Savings As your price savings dissipate over the next few years you will need to pick up the slack with new and even better savings to fill in your savings gaps. There is no better way to do so than with supply utilization management. First you need to clear away the myths misunderstandings and mistakes that are holding back your supply utilization savings. We hope this article goes a long way in helping you on this journey to utilization management success. Fall 2013 Healthcare Value Analysis Magazine 14 Sign up for your FREE Subscription to Healthcare Value Analysis Magazine Today Receive the Digital and Now Print Version of the Magazine Click Here to Sign Up for Digital and Print Versions Now Please Include Your Full Address to Assure that You Will Receive Your FREE Print Version Mailed to You Quarterly Fall 2013 Healthcare Value Analysis Magazine 15 Clinical Value Analysis Utilization Practice Change James Russell RN-BC Value Analysis Facilitator VCU Health System Richmond VA What do we mean when we talk about Value Analysis projects that focus on utilization We re talking about practice change. To a clinician asking them to change their method of practice can be a bit threatening. The way they ve always done it has been working just fine in their eyes so why change something that isn t broken Our task in Value Analysis is to provide a convincing argument for change that supplies sufficient motivation and reward. Clinical Evidence By training clinicians are scientists to a great extent. They are trained in a myriad of scientific disciplines from Anatomy and Physiology to Biology and Microbiology to Chemistry and Pharmacy. This training includes a great deal of statistical analyses and a heavy reliance on the scientific method. When seeking to influence a clinician s practice use of these tactics can dramatically assist in breaking down barriers and clearing up misunderstandings. At the Virginia Commonwealth University Health System (VCUHS) the Value Analysis Facilitators (VAFs) rely heavily on the examination of clinical evidence to support proposed change. Our Chief Nursing Officer and Vice President of Patient Care Services Dr. Deb Zimmerman has a very predictable line whenever an idea involving practice change is pitched What does the evidence show It s become so predictable that others ask it before getting in front of her. How can we convince her that changing the current practice effecting utilization will be beneficial Evidence Fall 2013 Healthcare Value Analysis Magazine 16 Clinical Value Analysis Case Study A recent example at VCUHS involved Sequential Compression Device (SCD) sleeves. Through networking at a UHC (University HealthSystem Consortium) conference the VAFs heard about a potentially significant ROI (Return on Investment) by converting from the higher cost thigh-high sleeves to lower cost knee-high sleeves. This ROI was primarily financial although a clinical component existed. The first step What does the evidence show By examining several published clinical studies a hypothesis was formulated and presented to the clinicians. Chief among their concerns were the proposed change s effect on DVT PE (Deep Vein Thrombosis Pulmonary Emboli) rates. These untoward events are serious and can be potentially fatal and are the reason SCDs are used in the first place. An increase in these clinically dangerous outcomes would be unacceptable and the clinicians (rightly so) would be unwilling to experiment and see what happened. They d need evidence to convince them changing their practice would be safe. The hypothesis therefore became Conversion from thigh-high to knee-high SCD sleeves will decrease VCUHS supply costs increase patient compliance (due to knee-high being more comfortable) and will not adversely affect DVT PE rates. Presenting a Value Analysis project in the form of a hypothesis can be very helpful in explaining the rationale for a project and providing measurable benchmarks to follow up on later. In this presentation the goal of cost savings is not hidden. In order to maintain (or establish) credibility with clinical experts it is important to be upfront about a project s goals and projected benefits. Transparency is a popular word in Value Analysis and rightly so. Decisions involving clinicians Fall 2013 Healthcare Value Analysis Magazine 17 Value Analysis will never get away from price negotiations but you can only lower a price so far. Utilization is where the greater impact can be made. Clinical Value Analysis should be clear and undisguised providing both defensibility if needed and inclusion of eclectic opinions and ideas. There was convincing evidence from several sources to show that the use of knee -high vs. thigh-high SCD sleeves showed no statistical difference in DVT PE rates. Some studies also showed an increase in patient compliance with the knee-high sleeves as the thigh-high sleeves can be quite uncomfortable. After presentation to many clinicians the project was approved by most but not all and conversion occurred except in select areas. Twelve months later the project s repercussions were shared with the clinicians. This is an important step in the process. If the clinicians are going to support a practice change they should be included in the follow up whatever the outcome. In the SCD project VCUHS experienced a cost savings that was nearly six-figures and our DVT PE rates not only didn t increase they went down It is possible that increased patient compliance played a part in this decrease. After presentation of the follow up data those clinicians who were reluctant to convert at the beginning of the project were convinced of the benefits and agreed to do so. Improving patient outcomes by decreasing untoward events can definitely provide compelling motivation for clinicians to change their practice. Summary A project like the one described above is the very definition of a win-win. Supply costs are decreased negative clinical outcomes are decreased and patient satisfaction improves. Accomplishing all of this without changing the price of the items being purchased may be different for many Value Analysis programs that are intensely pricefocused. As VCUHS s Director of Materials Management Timothy Wildt points out Value Analysis will never get away from price negotiations but you can only lower a price so far. Utilization is where the greater impact can be made. Fall 2013 Healthcare Value Analysis Magazine 18 Clinical Value Analysis A few projects like the one described here can enhance future clinician participation in utilization-based projects. Asking them to change their practice by providing sufficient evidence and motivation will be met with less skepticism and resistance when successful projects can be used as primers. It may even motivate them to generate project ideas on their own and bring them to Value Analysis Jim Russell is a Value Analysis Facilitator for Virginia Commonwealth University Health System and has more than 25 years of nursing experience specializing in critical care and psychiatry. He s been a Staff Nurse Charge Nurse Clinical Coordinator Nurse Manager Director and Chief Nursing Officer. He worked for many years in the for-profit community healthcare sector and also has several Academic Medical Centers on his resume. Jim sat for 5 years on the Nursing Advisory Board for a HealthTrust performing Value Analysis for nursing related products and represented more than 70 hospitals. He is currently on several Advisory Councils and Special Interest Groups for UHC and Novation. When not at work he can be found rolling around with his hyperactive rescue Husky. You can contact Russell with your questions or comments at jrussell2 Learn More Here at Fall 2013 Healthcare Value Analysis Magazine 19 Limited Time 90 Day FREE Trial Could Make Your VA Job A Whole Lot Easier How can you organize your Value Analysis paperwork projects and details so you can gain quality time to get your real VA job done right The answer is to automate your value analysis process so you will never worry about overload again. That s what our CliniTrackTM Value Analysis Manager can do for you. Here are some features that can make your VA job a lot easier and more productive Requisition Manager All of your new purchase requests will be completely automated and then triaged to the appropriate responsible party for action. Thus eliminating the hassle of dealing with dozens of unwieldy and non-conforming (e-mail fax and phone calls) new purchase requests that flow through your office annually. Value Analysis Advantage Library (27 Years of VA Tools & Experience at Your Fingertips ) Benchmarks best practices case studies value analysis study success models product and service specific value analysis checklists video training program (certification program included ) evidence links forms policies and procedures and much more VA Project Manager All relevant product evaluation project management documentation will be housed in this module. It will make it easy for you to keep track of your VA projects (project status agendas minutes savings reports etc..) and paper work. No more spreadsheets list servers or communication gaps to complicate your already busy life. Clinical Trial Manager This module will provide your clinical supply trial team with a step-by-step process to follow to manage and control all aspects (project manager trial location length training cost benefits analysis survey forms etc.) of your clinical trials. We can almost guarantee more consistent credible and exact trials are completed. Ensure Your Success Today with CliniTrack Value Analysis Manager Sign Up For Our FREE 90-day TRIAL OFFER at Fall 2013 Healthcare Value Analysis Magazine 20 AHVAP Perspective Dee Donatelli 2013 2014 President AHVAP Celebrating 10 Years of Service and Vision to the Healthcare Industry As AHVAP begins its 10th year the board is focused on providing strategic clarity around committee goals and structure. It is our belief that our committees will provide our members the tools and process to innovate and lead value analysis through the next 10 years. One thing is for sure the challenges will not lessen. As we look around and see our government our healthcare system and our hospitals struggle we must work together to overcome the immensity of challenges or better said - maximize the opportunities VA is clearly the foundation upon which our organizations must embrace change. It is a process that should drive change to deliver the highest outcomes and value at the lowest possible cost. This continuous process improvement IS value analysis and the focus of AHVAP is for our members to be leaders in the most rapidly changing industry in the nation. To be a part of AHVAP is to be a part of change for the betterment of the healthcare system in the United States Join AHVAP Today Fall 2013 Healthcare Value Analysis Magazine 21 Healthcare Supply Chain Best Practices Podcast Now Over 170 000 Listens SVAH Podcas ts THESE SPECIAL AUDIO PODCASTS HELP Y O U S AV E D O L L A R S A N D M A K E S E N S E Generate Actionable Bottom Line Savings Open Up a Whole New World of Savings Beyond Price Lead your Organization to the Next Level of Supply Chain Performance Purchase Cost Is Just the Tip of the Iceberg Reining in Your Multimillion Dollar Purchase Services Comparative Value Analysis Analytics Will Maximize Your Performance 5 Biggest Myths About Healthcare Supply Utilization Management 4 Things to Make Your Cost Management Job Easier Listen online at podcast.htm Or Find Us On ITunes Fall 2013 Healthcare Value Analysis Magazine 22 Value Analysis Teams Robert T. Yokl How Often Should Your Value Analysis Teams Meet The more often the better for peak productivity and performance. The healthcare industry norm for the frequency of value analysis team meetings seems to be once a month. However this meeting schedule can cause communication gaps delays in making important decisions and eventually loss of interest by team members. It ALL comes down to out of sight out of mind for most team members. Frequency is Critical We recommend that value analysis teams meet weekly or bi-weekly if there are enough agenda items for teams to be productive. Otherwise your teams will lose their momentum. Don t set the expectation that your VA meetings aren t important Frequent meetings also prevent team members from doing no work during the month and rushing to complete their projects (if they take the time to do this at all) on the last day before your next monthly meeting. This behavior leads to poor quality project reports that are rushed to the point where they are worthless. The worst VA team meeting schedule is ad hoc (or calling a meeting when there is something to talk about) which is missing the point of value analysis teams VA teams are an extension of the supply chain department and should be actively involved in almost all supply chain expense management decisions. Fall 2013 Healthcare Value Analysis Magazine 23 Value Analysis Teams Robert T. Yokl When we hear a hospital s value analysis team meets ad hoc we wonder how a supply chain manager or value analysis coordinator can make valid and informed decisions about the products services and technologies they are buying. Communication is Critical Department heads managers and clinicians have the expectation that their requests will be expedited in a timely manner. If your value analysis teams are only meeting monthly then there is a minimum of a 30-day (more likely a 90-day) delay in getting these individuals an answer to solve their supply chain problems. We hear about clinicians that don t get an answer (positive or negative) to their product request for well over a year. This is unacceptable unnecessary and unprofessional That s why it s critical for your VA teams to meet more frequently to provide your healthcare organization s staff with more timely communication on their requests. It is also important to improve communication between your VA project managers and your VA team leaders by having frequent VA meetings. If you don t meet for a month your VA leaders have no idea how their project managers are progressing with their projects. On the other hand if you are meeting weekly your VA leaders know in real-time how your VA projects are developing. Why keep your VA leaders in the dark month to month when frequent VA meetings will solve this common communication problem Productivity is Critical VA teams that meet weekly or bi-weekly are more productive more focused and more accountable than VA teams that meet monthly since they fall into a routine that they become comfortable with and it quickly becomes part of their regular duties. Whereas monthly VA meetings are even forgotten about because they aren t frequent enough to imprint them on an individual s brain. Additionally VA teams that meet more frequently than monthly naturally complete more VA projects on time on budget and on target. This means more savings for your healthcare Fall 2013 Healthcare Value Analysis Magazine 24 Value Analysis Teams organization and more credibility with your senior management. Robert T. Yokl Peak Performance VA teams are no different than your own supply chain department s team in that they need to be managed effectively if you desire peak performance from them. To do so efficiently with your VA teams requires the proper structure policies procedures and rules that promote accountability and instill discipline in your VA methodology. Speeding up your VA meeting schedule is one way to obtain the peak performance you and your senior management are looking for in your value analysis team in the new healthcare economy. 1 Ingredient to Improve Your Value Analysis Teams Michael E. Porter and Thomas H. Lee in a recent Harvard Review article put it this way Teams improve and excel by tracking progress over time and comparing their performance to that of peers inside and outside the organization. This measurement process goes beyond just tracking savings although this is what value analysis is all about. It is paramount that you also track and benchmark your Team s attendance It is an established fact that when more of your team members show up for meetings more work gets done. Tracking this metric and acting on it can greatly improve your outcomes. Projects completed on time Teams have a tendency to take forever to get projects completed. It shouldn t take more than 90 days for most proFall 2013 jects. You need to know this information to understand the root cause of your project s delays. Time to complete projects This gives you a benchmark to compare to your peers. If you find that your project managers are falling behind on their project timetables compared to your peers you need to find out why. Rejected savings If a project is rejected by a customer you need to document this fact so you can revisit this project at a later date. From our experience these savings can be achieved within 2 years by revisiting them so don t ignore them. Projected vs. actual savings per project You should have an estimate on the savings to be achieved on each of your projects. Then you can measure whether you hit your target or not. If you didn t hit your target savings - why not I m sure you could add a few more measurements that are important to the performance of your value analysis team to this list to measure your team s progress. What is important to remember is that your value analysis team(s) won t improve or excel if you don t track their progress over time and then benchmark how they measure up to your peers inside and outside your organization. This is an immutable law of team management No measurement no progress Don t let anything get in the way (i.e. time resources or deadlines) of the measurement of your team s progress especially since technologies on the market today can ease the pain of measuring and managing your team s activities. Healthcare Value Analysis Magazine 25 It s a Fact.... The More Organized You Are with Your Value Analysis Program... ...the More You Save CliniTrackTM Value Analysis Manager gives you the automated tools reporting and knowledge library to help make the savings game much easier for you and your Value Analysis Teams See how CliniTrackTM Value Analysis Manager can help take your Value Analysis Program to a whole new level Fall 2013 Healthcare Value Analysis Magazine 26 Leadership Interview Value Analysis Leadership Interview Barbara Strain Director Supply Chain Analytics University of Virginia Health System Charlottesville VA B a r b a r a St r a i n i s a g r adu at e of C a l i f o r n i a St at e U n i ve r s i t y an d o n e of t he f o u n d i n g m e m b e r s p a s t p r e s i d e nt a n d B o a r d Me m be r o f t he A s s o c i at i on o f He a l t hc a r e V a lu e A n a ly s i s Pr of e s s i o n a l s . S he i s a l s o a f r e qu e nt c on t r i but o r t o he a l t hc a r e s u p p ly c h ai n m a g a z i n e s on v a lu e a n a ly s i s t o p i c s . (HVAM) Can you give us a little bit of history about your healthcare career and how you got involved with value analysis (BS) My 35-year career can be divided into 3 phases laboratory scientist specializing in clinical microbiology laboratory management and value analysis all overlaid with non-profit professional organization governance experience. Performing analytical work in clinical microbiology helped to prepare me in making the leap to value analysis. In clinical microbiology we handled each patient specimen knowing that it may be our only chance to do all we could to provide the information to rule a diagnosis in or out. Collaborations with the patient s care team Fall 2013 (physician nurse pharmacist and respiratory therapist) were crucial to that patient s outcome and prepared me for those hard healthcare discussions as I transitioned to value analysis. When the University of Virginia Medical Center formed its own supply chain department independent of the university the leadership had the foresight to include a position for a clinical FTE to be part of their organization. The job description called for the clinical person to have experience in nursing laboratory respiratory therapy or other clinical discipline. I was lucky enough to be chosen and set on the course of developing a value analysis program. 27 Healthcare Value Analysis Magazine Leadership Interview I have been very lucky during my career and was given several opportunities to expand my knowledge base. One of the most valuable was participation in a green belt six sigma training program. This process improvement skill set as well as other management tools have translated seamlessly to operationalizing value analysis. I have a detective-like nature to begin with so gleaning information from those closest to the patient is invaluable in identifying where the next best idea might come from to improve patient care or enhance the staff practice experience. I live by these two mottoes that have served me well during my career People make problems people can solve problems and to win you have to have a system. (HVAM) Could you share with us your perspective on healthcare value analysis In addition explain your outlook before you became a value analysis professional through to your current viewpoint now that you are a senior value analysis leader. (BS) When I started my career hospital departments were called revenue centers. They did not focus on the number of FTEs and how Fall 2013 Healthcare Value Analysis Magazine 28 to lower spend they invested in research and other infrastructure and niceties no matter whether they were not for profit or private. When DRGs were formulated all that changed. Doing more with less working smarter not harder and departments now called cost centers were all concepts we had to Department heads managers and clinicians have the expectation that their requests will be expedited in a timely manner. get a firm grasp on before they overran finances. Even though we may not have called it value analysis we looked at why we had certain processes and how could we do it better while keeping quality healthcare at the center of all we do. Now the healthcare mind set is infused with value analysis. Using systematic proven processes we look at all aspects of a product life cycle product standardization ROI safety effect on procedure times or length of stay reimbursement. As Bob Dylan the ultimate poet of our generation sang The times they are a-changin . Leadership Interview The mission of AHVAP is to assist the value analysis professional. (HVAM) You are a recent past president and founding member of the Association of Healthcare Value Analysis what impact has AHVAP had on your career To be a part of a grassroots effort starting an organization with fellow healthcare value analysis professionals has been and continues to be personally and professionally enriching. From day one when we were eight people on e-mail asking each other about using certain products and sharing our experiences introducing new technology continues to be one of the best learning environments I know of. Additionally my time on the board involved in nonprofit organizational governance was one of the greatest honors. To work with the other board members to strategize how to serve the AHVAP membership build upon the fertile foundation of previous leadership and to promote the proFall 2013 Healthcare Value Analysis Magazine 29 fession and professionals of healthcare value analysis was most rewarding. (HVAM) Why is it so important to have a strong organization like AHVAP for Value Analysis professionals (BS) Value analysis has long been associated only as a term defining a process. While by definition is true it does not embody the trained professional that identifies recommends and implements savings cost initia- tives. The mission of AHVAP is to assist the value analysis professional. It is devoted to the professional and is represented in its membership qualifications that members shall be involved in value analysis and employed by a hospital or health system . Leadership Interview (HVAM) What role do you see for value analysis professionals with the implementation of the Affordable Care Act and all the cost cutbacks and new quality requirements (BS) The value analysis professional will continue to play a crucial role in contributing to the financial success of healthcare organizations. The difference as we begin to enter the age of Accountable Care is the grander scale of the initiatives and the speed in which they need to occur. Informed senior leaders are providing support to existing programs within their organizations or are establishing programs to be front and center. The time is right for value analysis professionals to contribute as many never have before. (HVAM) With your experience not only in value analysis but also supply chain analytics how do you see the synergy between the two working successfully for value analysis professionals to reach their cost and quality goals (BS) Data or should I say accurate source of truth data is the grand neutralizer required to legitimize initiatives gain support and measure success. Reporting to and having other responsibilities within supply chain Fall 2013 provided insights into the entire cradle to grave experience as products move throughout the healthcare environment. It made me a better well-informed value analysis professional. The best example I have of the synergy between supply chain and value analysis is rooted in a question that was posed to me that went something like this Who decided what products would be stocked and used in my unit My immediate answer was A group of your peers which was followed by an explanation of our value analysis program and how they could provide input. Contrary to popular belief supply chain does not decide what products will be used in bedside care but plays an integral role in providing the data to arm the value analysis professional with the quantities that were purchased the price of the goods and the contract details as well as data to audit success of the initiative. By understanding the logistics post supply decision a realistic time line could be set in motion to operationalize the successful introduction of the supply. Understanding the necessary steps from in-service training establishing par levels determining who would use the product how it would be stocked 30 Healthcare Value Analysis Magazine Leadership Interview and entering information into the materials computer system are all keys to success. As Helen Keller so aptly said Alone we can do so little together we can do so much. (HVAM) Could you share with us a recent success that you have had with a value analysis project at your organization This success story involves collaboration between nursing the wound ostomy team supply continence lent of preventing 577 HAPU (hospital acquired pressure ulcers) with a related savings of 5M. Each member and department involved in the success of this project were publically praised for the collaboration toward improving patient safety. chain operations and value The value analysis professional should take stock of where in their organization structure they and their department reports. right direction (HVAM) As a senior value analysis leader what advice would you give a new value analysis professional to help them advance their career in the analysis. One of the patient safety initiatives is reducing pressure ulcers. We tackled this in a coordinated team fashion including evaluation of products use of products for extended time on pilot units to determine efficacy and costs patient reviewing bed making linen guidelines turning and mobilization of patient and administrative support for dedicated skin champions in each nursing unit. The project started in 2010 and final products and skin integrity guidelines were rolled out in summer 2012. This is an example of an initiative that increased overall product costs but decreased the hospital acquired pressure ulcer rate to 1% which is the equivaFall 2013 The value analysis professional should take stock of where in their organization structure they and their department reports. If not reporting directly to a Chief VP then they should be reporting to someone who has a position high enough in the organization that can influence senior leadership. Support from senior leadership for value analysis initiatives is key to financial and patient quality successes. Initiatives should range from supply conversions to standardization of supplies and practice as well as physician procedure use items and overall utilization per MS DRG. 31 Healthcare Value Analysis Magazine Leadership Interview This activity requires individuals trained in value analysis who have clinical experience supported by data analysts who mine internal and external sources and a direct link to supply chain management. Finally today more than ever value analysis professionals need to stay in touch with one another through organizations such as AHVAP. Networking and knowledge sharing whether live or virtual is the life line to past present and future strategies that could make a difference in their organization s success. (HVAM) You recently were part of a team of AHVAP Senior Value Analysis Professionals who created a Value Analysis 101 and 201 training program which you previewed at AHRMM 2013. Will this program roll out fully at AHVAP 2013 in October Could you share some highlights or key thoughts about the programs Most of you may know that AHRMM rolled out a new movement centered on cost quality and outcomes. Through organization-toorganization networking AHVAP was asked to participate in their annual meeting by bringing value analysis principles to their healthcare materials and resource management membership. Fall 2013 Healthcare Value Analysis Magazine 32 A team of five AHVAP members developed two half day pre-conference workshops for the AHRMM 2013 annual conference. Gloria Graham and Colleen Cusick led the Value Analysis 101 session outlining the elements of a value analysis program program struc- Today more than ever value analysis professionals need to stay in touch with one another through organizations such as AHVAP. tures and membership as well as basic tools for decision support and other gettingstarted principles. James Russell Terri Nelson and myself led the Value Analysis 201 Advanced Concepts in Value Analysis session where we reviewed strategies in addressing physician preference items product standardization and utilization as well as how to engage physicians in value analysis. Both programs were well received at AHRMM as evidenced by positive comments in their evaluations. Letter To Our Customers and Subscribers Dear Colleagues It has been brought to our attention that our competition is telling our customers and subscribers that SVAH s Utilizer Dashboard is a spend manager. We want to make it absolutely clear to our customers and subscribers that our Utilizer Dashboard isn t a spend manager - not by a mile. To the contrary our Utilizer Dashboard is a utilization manager which differentiates us from the other guys. While spend managers help you hunt for better prices which are slowly disappearing our Utilizer Dashboard is focused on the new low-hanging fruit (utilization management) that we can virtually guarantee a 5% to 7% increase in your supply expense savings within 12 to 18 months. Beware of vendors selling old technology by putting a new face on it and calling it a utilization manager. There is only one utilization management system in the healthcare marketplace today Utilizer Dashboard. Don t be fooled by the misinformation campaigns of imitators Or your utilization savings results will be disappointing at best Sincerely Robert T. Yokl Robert T. Yokl President & Chief Value Strategist SVAH Robert W. Yokl Robert W. Yokl Vice President of Operations SVAH Fall 2013 Healthcare Value Analysis Magazine 33 Value Analysis Techniques Part-Two of Series Is Poor Communication Slowing Your VA Process Tips and tools to enhance your VA communication and productivity By Wanda-Dupree Lane RN BSHA MaED Clinical VA Coordinator The Regional Medical Center Memphis TN The most valuable tool for improving communication is the template. Develop templates like figure 2 for communication tasks based on the feedback from your surveys and productivity spreadsheets. If one of the survey items reveals an information gap regarding time between request and availability develop an email template with specific information included and set a reminder to inform the requestor bi-weekly. Figure 2 Sample Communication Template Good Afternoon _________ The product you have requested has passed Value Analysis. The conversion process began on _________. Our distributor has informed me that we currently have approximately ________days weeks stock on hand based on typical usage patterns. The new product is expected to be available by __________. Education for this product will begin ________________. I will update you regarding this item on ____________. Thanks for working with the Value Analysis Team and we hope we are serving you well. Wanda Lane Fall 2013 Healthcare Value Analysis Magazine 34 Value Analysis Techniques This communication assures the requestor that his product was considered and provides expected dates for completion including an explanation for delayed availability. Clinicians may have no idea that logistical issues determine product availability thus in this culture of immediate gratification this information satisfies the anxiety caused by delay. Another useful template to develop is a conversion table. Developing a template to use during the conversion process promotes accountability visibility to obstacles and challenges and supports transparent conversion processes. Simple formatting and repetitive use of this template will foster a sense of routine alleviating the sense of controlled chaos that often accompanies conversions. Figure 3 Conversion Graphic Graphic tools Develop a conversion graphic (figure 3) that clearly illustrates where a product lies in the process. Consider posting this graphic on the Value Analysis landing page on your facility s internal website or on a whiteboard in an accessible location in the facility. This at-a-glance tool provides assurance that the request is in queue and promotes accountability in managing the process. Fall 2013 Healthcare Value Analysis Magazine 35 Value Analysis Techniques Another graphic tool that assists in communication and defines boundaries with product requests is a Request Cycle Graphic (Figure 4) with dates assigned monthly made visible to clinicians physicians and vendors. This graphic closes the gap on product request deadlines eliminates repetitive questions and establishes guidelines for all parties involved. Figure 4 Request Cycle Graphic Placement of this graphic should not coincide with Conversion Graphic as this pertains to vendors as well as staff. This type of graphic could be placed on the VA web page but also displayed in the Purchasing office or at check-in kiosks. The final graphic is a simple product change poster (figure 5) used to alert all staff members of a product or labeling change. In this case a photograph of the current product is placed next to a photograph of the new product with an arrow and wording to indicate the action. Fall 2013 Healthcare Value Analysis Magazine 36 Value Analysis Techniques Implementation If your facility doesn t have these tools in place consider an implementation strategy beginning with the survey and benchmarking information. Develop the tools approved by your team and begin implementation. After the tools are in place for 90 days track the same information on the tool used for benchmarking. If productive time is increasing and redundancy is diminishing repeat the survey. If not tweak your tools to address the gap that remains. After six months repeat the survey and look for patterns. Compare the results to the previous survey and assess successes and challenges. Position the communication tools as a Value Analysis service upgrade and promote positive response with communication saturation. Starting strong with the tools and templates will bring visibility to your team and the progress made. Conclusion Value Analysis communication is multi-faceted and complicated. By using consistency and simplicity acknowledging the three P s of communication and implementing tools such as the templates included in this article your team will achieve maximum productivity in minimal time. Wanda-Dupree Lane is the Value Analysis Coordinator at the Regional Medical Center at Memphis TN. Wanda has been a registered nurse for 26 years vendor representative for five years and business owner for several years. During that time Wanda has watched healthcare perceptions and actions change with a unique perspective. In her current position Wanda has enjoyed watching her hospital s Value Analysis program grow and develop. The program continues to evolve seeking new and innovative ways to meet customers needs and provide the best possible care in the most fiscally responsible manner. You can contact Wanda with your questions or comments at WLane or call her at 901-545-8662. Fall 2013 Healthcare Value Analysis Magazine 37 The Ultimate Supply Chain Radar System Missing Utilization Savings Opportunities Can Do Damage to Your Bottom Line if Not Detected FINDING THE NEXT LEVEL OF BIG SAVINGS DOESN T HAVE TO BE DIFFICULT WITH THE RIGHT SYSTEM TO DO THE HEAVY LIFTING FOR YOU IV Sets SCD Sleeves Exam Gloves Hand Soaps Lab-Test Kits Blades & Burrs Office Supplies Endomechanical Closers Patient Warming Defib Pads Transcription Pacemakers Oxisensors ISO Gowns Anesth-Spinal Davinci Robot Supplies Laundry Linen Lab-Reagents Orthopedic Softgoods Grafts & Tissues Electrosurgical Supplies Coronary Stents Skin Prep Ablation Catheters Urologicals IV Catheters Respiratory Masks Telecom Services Infection Control Wipes Neurostimulators LET US SHOW YOU HOW EASY THE NEXT GENERATION OF BIG SAVINGS CAN BE WITH A FREE NO OBLIGATION TEST DRIVE OF THE LEADING SUPPLY UTILIZATION MANAGEMENT SYSTEM IN Fall 2013 38 HEALTHCARE TODAY Healthcare Value Analysis Magazine Value Analysis Analytics Robert W. Yokl Before During and After the Value Analysis Study Why it is important that utilization management works in concert with a strong VA program When we engage with a value analysis committee or team we often observe that the VA teams tend to get caught up in an episodic mindset . An episode represents the value analysis study itself. Once a committee or team performs a VA study they are inclined to believe they have completed the study (or finished the episode) and now can move on to the next VA study (or episode). But in today s complex healthcare environment where anything and everything can happen before during and after a value analysis study we must be on guard for the realities that may occur with our value analysis studies after we believe they are actually finished. Unintended Consequences The reality in value analysis today is that no study is perfect no implementation goes as planned and there are always outliers that we need to address to fix the end result of our VA studies. We cannot just implement a new policy and procedure and think that everyone is going to adhere to it. We can t think that everyone is going to use the new recommended product perfectly and in the same usage patterns as its predecessor. We have to assume that there are going to be issues and devise systems to alert us to these issues or endlessly assume that we live in a perfect VA world when the reality is dramatically different. Fall 2013 Healthcare Value Analysis Magazine 39 Value Analysis Analytics Case Study Robert W. Yokl One example of this episodic mindset was a hospital environmental manager who changed from a reusable underpad to a disposable. It s important to note that the practice of using a reusable underpad that is laundered by an outside linen processing company is an industry best practice. But this manager decided to go with a disposable underpad anyway to try to reduce his linen processing costs. He devised a scenario with his underpad representative that he believed would save his hospital upwards of 20% to 27% on his linen laundry processing costs. Contrary to others experience he went ahead anyway and made the change with the episodic mindset that he had just achieved a big win for his healthcare organization. He then tracked his estimated savings by reviewing his laundry processor s monthly reports. As he hoped the reports were telling him that he was saving over 27% on his reprocessed underpad usage. Now here s the rest of the story At this point in time we weren t working directly with this Environmental Manager since he made this change with approval from his Vice President but didn t consult with his hospital s value analysis committee. How I learned of this product change was through the use of the hospital s utilization dashboard which we were facilitating for this client. Employing this technology I observed this hospital s absorbent hygiene utilization category shooting up to over 284k annualized from the two years prior without knowing a change was made in this category of purchase. The Director of Value Analysis who was aware of the change knew his hospital s underpad cost would spike and looked at their linen processing cost that should have been going down dramatically to offset these dollar increases in disposable underpads. What he and I uncovered was that the hospital s linen processing expense was only down by 5% overall. Therefore the savings that was projected by the hospiFall 2013 Healthcare Value Analysis Magazine 40 VA teams tend to get caught up in an episodic mindset . Value Analysis Analytics hospital s absorbent hygiene utilization category shooting up to over 284k annualized from the two years prior. When we spoke to the Environmental Manager about this fact he was a bit incredulous that we were questioning his successful underpad project. He had this mindset because he was only viewing one dimension of this VA study which was only the usage of the reusable underpads that were eliminated from his linen laundry processing reports. He thought he was successful with this project but he was not What he did not anticipate was that the new underpad would be overused wasted and misused on the nursing floors. What we dis- What he did not anticipate was covered was that the hospital s nursing floors were now that the new underpad would posable underpads. Something was clearly missed on this be overused VA study and the Value Analysis Director decided that he wasted and misused on the would now conduct a new underpad study to determine nursing floors. the best course of action going forward. using more bed linens which was caused by the new dis- End Result The good news for this hospital was that because of their utilization management system they realized that they didn t achieve the 27% in Linen underpad processing savings that was projected by their Environmental Manager---it happens. This would have been an even bigger disaster if this hospital did not have a tracking system in place to alert them of the additional unintended 284k utilization cost overrun. Because they had a utilization management system working in concert with their strong value analysis program they avoided this big hit to their bottom line. Once you come to the realization that there is no perfect value analysis study as in this situation you then can see the significance of knowing with Fall 2013 Healthcare Value Analysis Magazine 41 Value Analysis Analytics Robert T. Yokl certainty where you are before your value analysis study begins what is going on during the VA study and what the end result is after the VA study. There is no substitute for this process if you want to get it right the first time To summarize projected savings are only projections. We need to make sure that all projected savings last for the long-term and are sustainable. Therefore they must be tracked trended and monitored. If you don t follow this process you may just be spinning your wheels thinking you are saving big dollars but in reality like the example above with the underpad you could be actually costing your healthcare organization money instead and not even know it. Are You Experiencing Groundhog Day With Your Hospital s Value Analysis Committee and Teams I m sure you remember the movie with Bill Murray called Groundhog Day where Murray is a TV weatherman who is trapped in a time loop of repeating the same day again and again on Groundhog Day in Punxsutawney Pennsylvania. Well we have seen the same phenomenon with hospital value analysis teams who repeat the same team meeting again and again. We have mentioned before how we frequently read the minutes of value analysis teams going back a year and are flabbergasted by how the same items are on their agenda month after month and even year after year. There are three reasons why this Groundhog Day is happening with value analysis teams and they are as follows 1. No time line for completing projects Every value analysis project needs a beginning and an end or it will go on forever. In our value analysis model we give the VA project manager 90 days to complete his or her project. If the project isn t completed in 90 days then the hospital s value analysis steering committee must approve an extension of the project. 2. No accountability for project completions Each VA project should be assigned to a VA project manager who is accountable for its completion. This way there is no buck passing obfuscation or excuses for not completing a project on time and on budget. 3. Lack of urgency to get things done A sense of urgency must be created with your VA team members to get projects completed. As mentioned this can be accomplished with deadlines steering committee oversight or prodding. However if you decide to speed up your projects you must create a sense of urgency to get them done in a timely manner. If you look at your own value analysis team and find that they too are experiencing Groundhog Day you owe it to your hospital and yourself not to repeat this nonproductive behavior. It can be quickly corrected with these three tactics which have worked every time we have employed them. Fall 2013 Healthcare Value Analysis Magazine 42 BREAKTHROUGH GAME CHANGING BOOK IS YOURS FOR FREE THE FUTURE OF SUPPLY CHAIN MANAGEMENT IS ALL ABOUT UTILIZATION BECOME A SAVINGS MAGNET Read this book and in a few weeks save more money than you have in years Sound unbelievable Robert T. Yokl and Robert W. Yokl healthcare s leading authorities in Supply Utilization Management have helped hundreds of hospitals healthcare systems and integrated delivery networks to save close to a half billion dollars by employing the same utilization management strategies tactics and techniques that they will teach you in this book. Understand why you are slowly but surely running out of price savings Learn why utilization management is more important than ever before Hear why a new discipline of utilization management is on the horizon Review 8 categories of utilization misalignments that cost you money Know why value analysis analytics is the new science of savings Grasp the worth of the value analysis utilization management connection The Book is FREE ( 12.95 Value) but the Information is PRICELESS Click Here To Get Your FREE Copy Today Fall 2013 Healthcare Value Analysis Magazine 43 Evidenced-Based Value Analysis Why Are We Ignoring the Common-Sense Solution Dee Donatelli RN BSN MBA Sr. Vice President Provider Services Hayes Inc. As clinicians hospitals and consumers look ahead to 2014 and the full implementation of healthcare reform much discussion centers on ways to achieve clinical quality improvements and cost savings. Achieving certain quality measures won t be easy but I m sure we can all agree that our runaway healthcare expenses need to be corrected. The question is are we ready for the changes that are necessary to rein in costs and realize highquality health outcomes In the ongoing process of executing the Affordable Care Act I believe some providers have overlooked the most commonsense solution Integrating scientific evidence into healthcare decision making especially our purchasing decisions. The consequences of this failure have been overuse misuse and even (in some instances) underuse of the supplies products devices services and interventions healthcare providers use to deliver care to their patients. Fall 2013 Healthcare Value Analysis Magazine 44 Evidence-Based Value Analysis In my previous columns I ve advocated for such an evidence-based approach and some organizations are already doing it. What I want to flesh out in this issue are the reasons more hospitals and healthcare systems aren t embracing such an easy solution. A host of factors create barriers to evidence-based value analysis (EBVA) but in my perspective one of the biggest problems is a lack of understanding about the value of scientific evidence compared with physician preference or opinion. Most value analysis professionals myself included haven t been trained to critically evaluate and apply evidence to the value-analysis process. As a result our attempts at EBVA become stymied by multiple roadblocks such as Strong physician preferences for certain products or management approaches due to physician training and familiarity with the products. Misleading and biased information communicated in the media. Hospitals can t afford to wait any longer to start systematically incorporating evidence into their value-analysis processes. Influential relationships that exist between manufacturers pharmaceutical representatives and clinician users over which we have little control. Competition among practitioners and hospitals coupled with the desire to gain a marketing advantage which is often driven by patient expectations and demands. Conflicts of interest that result when physicians receive royalty payments and consulting fees from companies and higher professional fees associated with using certain products or providing certain procedures. Defensive medicine especially with regard to ordering diagnostic tests. Local patterns of care and peer pressure. Hope and belief that something newer and more high tech must work better than an older approach. Fall 2013 Healthcare Value Analysis Magazine 45 Evidence-Based Value Analysis Nod your head if you ve been guilty of allowing any of these factors to influence your purchasing decisions. Hospitals can t afford to wait any longer to start systematically incorporating evidence into their value analysis processes. Already academic scholars healthcare reformers and consumer advocates are questioning the way we make decisions in healthcare. Consider for example Selling Sickness [http] an alliance between patients and professionals that is calling for the enactment of several reforms intended to improve public health and safety and save money. Some of these reforms include comparative-effectiveness research that evaluates drugs and devices against appropriate controls rapid identification and removal of unsafe or ineffective products and access to raw clinical trial data so that independent analyses can be performed. It s time to move beyond a cost-based SKU approach to systematic selection and utilization that includes patient outcome and safety data. Using this type of evidence will enable your institution to replace confusion with clarity subjectivity with objectivity waste with savings and mediocrity with clinical excellence. Ms. Donatelli has more than 30 years of experience in the healthcare industry with expertise in the areas of supply chain cost reduction and value analysis. Before joining Hayes Ms. Donatelli was Vice President of Performance Services at VHA Inc. where she provided executive leadership and direction for VHA s consulting services including Clinical Quality Value Analysis. She is a Certified Material Resource Professional (CMRP) and a Fellow of the Association for Healthcare Resource and Materials Management (AHRMM). She the current president of AHVAP the Association of Healthcare Value Analysis Professionals. Dee can be reached at ddonatelli for questions or comments. Hayes Inc. (http an internationally recognized leader in health technology research and consulting is dedicated to promoting better health outcomes through Fall 2013 Healthcare Value Analysis Magazine 46 What Are Utilization Misalignments Costing Your Organization Utilization Values Change Quickly. Don t Base Your Cost Management Decisions on Only Price Get a Complimentary Demonstration of Your Utilization Savings Potential Today Stop Guessing and Start Saving More Beyond Price WWW.UTILIZERDASHBOARD.COM Fall 2013 Healthcare Value Analysis Magazine 47 Benchmarking Robert T. Yokl Where Are You Getting Your Benchmarks Multiple benchmarking sources ensure that you are getting them right the first time. Benchmarking is an art and a science but there are some hard and fast rules that need to be followed to ensure the best results possible. One hard and fast rule is that multiple benchmarking sources ensure that you are getting them right the first time. To this end make sure one of your benchmarking sources is a peer hospital. Benchmarking Sources A study we conducted some time ago shows that most healthcare organizations get 57% of their benchmarks from their GPOs and third parties. However we have found that the best benchmarks are obtained from peer hospitals. This is because you have an opportunity to talk to these peers and discuss what is different about them that makes up their benchmarks. On the other hand benchmarks obtained from your GPO distributors consultants or third parties generally don t permit you to talk to the source of the information that you are being provided. Hence you don t know what is behind the numbers. For instance if you were to benchmark your I.V. sets usage you would need to ensure that you are comparing apples to apples. The only way you can understand what your peers IV practices are is by asking questions of them such as does your benchmark partner have an I.V. start team What IV manufacturers are they using Do they have a closed or open system Fall 2013 Healthcare Value Analysis Magazine 48 Benchmarking comparing apples to apples. Or do you have a mismatch Robert T. Yokl Once answered all of these questions will help you to decide if you are indeed Statistical Profile Another way that we have found helpful to discover good benchmarking partners is to use a survey which we call a Hospital Statistical Profile (HSP) to determine the operating characteristics of potential benchmarking partners. The HSP form requests annual operating statistics (i.e. patient days adjusted patient days discharges operating procedures etc.) along with questions about how potential partners do business such as what departments they outsource to give us a good understanding of how they operate and at what intensity level. Make sure one of your benchmarking sources is a peer hospital We also visit their website to determine their clinical departments and specialties and if they have clinics or a nursing home etc. This gives us additional information that helps us fully understand what our potential benchmarking partner is all about such as are they a trauma center (what level ) and do they have a cardiovascular center of excellence. You would be surprised what you can find out about a potential partner from their website. All of this information put together gives us a clear picture of potential benchmarking partners hospital operations. We then match this partner to clients that have similar operating characteristics when we are benchmarking their commodity groups or anything else. You can do the same. Your goal should be to find a benchmarking partner that looks like your own hospital statistically and operationally to get the best results. For example if you are a community hospital you wouldn t benchmark yourself against a teaching hospital as this would be a mismatch. You need to find a community hospital in your town or region that looks a lot like yours. Fall 2013 Healthcare Value Analysis Magazine 49 Benchmarking Multiple Sources Robert T. Yokl One source or metric compared to itself isn t always a reliable benchmark. That s why we like to have multiple sources and multiple benchmarks in our database to ensure we are getting it right the first time. You too should make this a best practice We are now honing in on blood products as a new source of savings for our clients therefore we have been collecting blood product benchmarks from multiple One source or cles associations etc. to make sure we are getting metric compared this metric right. to itself isn t If we only decided to use for instance a always a reliable benchmark from a magazine article the chances benchmark. are we would be wrong since as I just said every sources - our clients white papers magazine artihospital has different operating characteristics. To hit the bull s-eye you need take this important factor into consideration. To this end we are always refining our benchmarks as we talk to our benchmark partners. Just the other day we asked one of our clients how they got their blood products cost per patient day so low. They told us that they started a blood management program a few months ago. This is how we put context to our benchmarks that give them real meaning and credibility. As you can see there is a lot more to benchmarking than meets the eye but you can never go wrong by having multiple benchmarking sources along with peer hospital benchmarking partners to ensure you are getting them right the first time Fall 2013 Healthcare Value Analysis Magazine 50 The Last Word Robert W. Yokl Why Do We Continue to Ride an Old Tired Horse Price Savings Have Diminished by a Shocking 70% to 80% Overall Many of my peers think I am crazy when I make the statement that price savings is fizzling and that the majority of the bonafide big savings opportunities now reside in utilization management of their supplies services and technologies we are now negotiating best prices for. As I work with organizations throughout the country I see different levels of maturity of Supply Chain Programs and quite frankly it does not surprise me that the mainstream strategy is still price focused. We live in a price centric world from our GPOs in healthcare to Costco Target and Best Buy in our personal lives. We are forever chasing the best price for our organizations and for ourselves. But is that same old tired horse we have been riding for over 40 years in the healthcare supply chain going to meet our savings and cost goals over the next 1 2 or 5 years The answer is a big NO Are there still price savings Yes there are always going to be some price savings from the vendors and manufacturers who can reduce costs and be innovative enough through tough economic times to bring you a lower cost product but to what degree When our price horse was a mature steed about 6-8 years ago we used to find 5% to 7% savings in total supply budget annually but those days are far gone. Now we are lucky to eke out 1% or 2% in savings opportunities each year in price savings. That means that our price savings have diminished by a shocking 70% to 80%. Your price savings are suffering from a serious case of the law of diminishing returns. Utilization is the next strong horse that we need to mount up and start riding if we are going to get back to the levels of savings we once achieved at 5% to 7% or higher Yes they are achievable I have seen utilization savings in the range of 7% to 13% in overall budget achieved at hospitals throughout the country who Fall 2013 Healthcare Value Analysis Magazine 51 The Last Word Robert W. Yokl have committed to utilization management. How could this be possible If you are totally focused on price you are overlooking the opportunity to reduce the supply utilization costs in your organization. If you are not looking for the salt then you will not find the salt and the same If you are totally focused on price you goes for utilization. You must have systems processes and are overlooking the methods in place to find and drive out the utilization cost opportunity to reduce the supply utilization that is the next generation of supply chain savings. costs in your I am not saying you should ignore price savings organization. since it is the first bastion of opportunity and like anything else it is a part of our total supply chain management process just like inventory management and value analysis. We must now add a new systematic process to our departments and organizations and that is utilization management. You can then utilize your value analysis committee and teams to attack these new and better savings. Once your value analysis committee or team has driven out the unwanted and unnecessary costs you can continue to track the utilization of the products on an ongoing basis to ensue these savings stick. Your new utilization management horse is ready for you to mount up and ride to achieve a new level of savings that is certifiably there in your supply streams for you to achieve. This is a different type of savings that you must develop new systems new approaches and refocus your value analysis teams and committees on these new opportunities that your utilization management program will uncover. Traditionally value analysis committees and teams are new product-costquality and conversion focused but now you can add a new element to the mix with utilization management. Specifically driving out the mismatches misalignments failures and waste in your existing products and services in your supply chain. Remember this new horse will deliver you to the next level of savings but only if you mount up and start riding today Fall 2013 Healthcare Value Analysis Magazine 52 Turning Skeptics into Believers Even our Utilizer Dashboard clients were at first skeptics until they saw the results of their new and better savings opportunities. A typical Utilizer Dashboard client can yield as much as 7% to 15% in supply utilization savings in less than one year Are you a skeptic or a believer Over the last 6 years SVAH has helped leading healthcare organizations realize new and better savings - beyond price and standardization - in the range of 7% to 15% from budget. Prove Positive A typical hospital normally saves 1% 2% or 3% on their total spend with price or standardization initiatives but utilization can now explode your savings by as much as 67% to 79% vs. just price savings alone. We have the documented proof to back up this extraordinary claim. Our Clients Were Skeptics All of our Utilizer Dashboard clients were skeptics until they saw the results for themselves and are now experiencing these new and better savings. Breakthrough Savings If you are looking for a breakthrough in your savings yields there is no time like the present to sign up for a demo of our Utilizer Dashboard. We even guarantee up to 3 1 ROI to protect your investment Sign up for a FREE Demo at Fall 2013 Utilizer.htm Healthcare Value Analysis Magazine 53 It s Not Too Late... To Rescue the Supply Utilization Dollars That Are Drifting Away From Your Bottom Line Why Lose Any Dollars If You Don t Have To Learn Today How You Can Rescue All of Your Utilization Dollars and Never Let It Damage Your Bottom Line Again. Fall 2013 WWW.UTILIZERDASHBOARD.COM Healthcare Value Analysis Magazine 54