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Description: Leading Cost and Quality Strategies for the Healthcare Supply Chain -Featured Article - Physician Preference Item Value Analysis and Standardization Success Through Vendor Partnering

Volume 4 Issue 2 Healthcare Leading Cost and Quality Strategies for the Healthcare Supply Chain Magazine A Blueprint for Greater Performance and Focus In Value Analysis and Supply Utilization Management Volume 4 Issue 2 www.ValueAnalysisMagazine.com Healthcare Value Analysis & Utilization Management Magazine 1 RIGHT TOOL makes all the The DIFFERENCE www.SupplyUtilizationAdvantage.com A supply utilization management reporting system is specifically designed to do a particular task. A job that would be a lot tougher to do without it. Now the right tool for supply utilization management is here Supply Utilization Advantage System is designed to help you quickly and effortlessly uncover and resolve savings and quality challenges in your supply chain . This unique system is built on a powerful reporting engine that has shown countless successes in the real world of supply utilization and value analysis management. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 2 SVAH Solutions The Advantage is Yours contents Healthcare Value Analysis & Utilization Management Magazine Healthcare Value Analysis & Utilization Management Magazine is published quarterly by Strategic Value Analysis in Healthcare P.O. Box 939 Skippack Pa 19474 Phone 800-220-4274 8 FEATURE ARTICLE By Robert T. Yokl FAX 610-489-1073 bobpres ValueAnalysisMagazine.com A Blueprint for Greater Performance and Focus in VA & Supply Utilization Management www.ValueAnalysisMagazine.com ------------------------ Editorial Staff Publisher Robert T. Yokl bobpres ValueAnalysisMagazine.com 12 UTILIZATION ARTICLE By Robert W. Yokl ------------------------ SUM Flavor of the Month or the Next Mission-Critical Cost & Quality Control System 24 CLINICAL VA Article By James Russell RN-BC Managing Editor Robert W. Yokl ryokl ValueAnalysisMagazine.com ------------------------ Senior Editor Patricia A. Yokl ------------------------ What s Your Value Analysis Onboarding Process 29 THE LAST WORD By Lynn Everard Editor and Graphic Design Danielle K. Miller Copyright 2016 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 valueanalysismagazine.com for approval to reprint excerpt or translate articles. Products or Outcomes What Are You Buying Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 3 From the Publisher s Desk Robert T. Yokl The Lone Ranger Effect Robert T. Yokl Value analysis is a real profession and a lifetime career for those who decide to make it so. Yet too many value analysis professionals decide to go it alone when they enter this profession. Meaning they have no training mentoring or pathway to success to follow in this important field. Too many are winging it at their own peril. Just think of the power value analysis professionals have to wield. They can endorse or negate a million-dollar purchase while saving hundreds of thousands of dollars annually for their healthcare organization. They can influence the decisions of the value analysis teams and or their supply chain leadership who look to them on a daily basis for guidance. Hence value analysis is a position of influence that too often goes unnoticed in a hospital system or IDN. Just like any other profession value analysis has ethical standards creeds doctrines and beliefs that set it apart from other occupations such as the tenet that value analysis is the study of function and the search for lower cost alternatives. It s not about price or comparison shopping as too many value analysis practitioners believe. However without comprehensive value analysis training and mentoring value analysis practitioners can and will get caught up in this paradigm and then be lost forever. Most new value analysis practitioners receive on-the-job training by an incumbent or are selftrained. The disadvantage of doing so is that you either are taught the bad habits of the incumbent and or you never seek out training or mentors that can help you to follow the right path to success. I personally had a mentor when I was first hired as a supply chain value analysis practitioner who kept me on the straight and narrow path to success. I don t know if I would be where I am today without this mentor. Here are four sources for training and mentoring that I recommend to help you in your quest for professionalism SAVE International Association of Healthcare Value Analysis Professionals or our Special Reports and Best Practices sections at our SVAH Solutions website. We hope you will investigate these excellent resources to up your value analysis game. It is mission critical that you do so Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 4 FREE Webinar A Strategic Approach to Integrating Utilization Management into Your Value Analysis Program You read in all of the major supply chain publications that utilization management of supply and purchase services is the next big thing in cost and quality management in healthcare supply chains. The future is now to find the next level of big savings in your hospital s supply chain which is utilization management. The key challenge is bridging the gaps between current supply chain and value analysis programs to achieve the significant savings that utilization management can bring to your hospital s bottom line. Most value analysis and supply chain programs do on occasion find significant utilization savings on contract and or in value analysis studies but the key to utilization management is finding ALL of the significant savings available to you in your supply chain. This presentation will show you how you can turn the occasional utilization finds into a consistent system that complements your supply and value analysis program while bringing major savings and quality results in the short and long term. Presented by Robert W. Yokl Sr. VP Operations and Robert T. Yokl CEO of Strategic Value Analysis in Healthcare PROGRAM OVERVIEW 1. Utilization Management - The Missing Link in the Supply Chain Continuum 2. Understanding the Relationship GAP Between Supply Utilization and Value Analysis 3. Getting Past Price Thinking to Increase Savings Opportunities by 7% to 13% of Overall Budget 4. Getting Your Organization Ready for Supply Utilization Management 5. The Strategic Approach to Utilization Management Integration--Reporting Training Management Buy-in Deployment and Ongoing Savings 6. Best Practices to Uncover ALL of Your Hidden Utilization Savings Opportunities 7. Utilization Management - The Future is Now Thursday May 12 2016 - 1 00 pm EST Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 5 Click Here to Register Or Visit - www.SupplyUtilizationManagement.com Charting the Right Course for Your Clinical Departmental Supply Utilization Management Clinical Supply Utilization Savings & Quality Enhancements Made Easy Learn More at www.ClinicalSupplyUtilization.com or Call 1-800-220-4274 Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 6 From the Managing Editor s Desk Robert W. Yokl The Best Way to Gain Value Analysis Focus and Performance Robert W. Yokl As we enter in the new level of quality and supply chain performance with our value analysis programs we are now being called upon to do so much more than just evaluate products services and technologies. We are being asked to ensure that not only are these products viably effective in their use as well as cost efficient but we must also warrant our organizations against products that do not offer quality or reimbursement to the hospital. Value analysis professionals have always been known as the gatekeepers for the majority of products that enter a hospital or health system but the game is changing. Now we have to add to our already frenetic workloads new elements that are crucial to the survival of our organization s bottom line. As the evolution and progression of value analysis in the supply chain happens right before our eyes it is a very good time to take a step back and take stock of what needs to be done as we move forward. As you view your existing program look at yourself and your level of expertise as well as your committee and team s proficiency and know-how. Where are you on the competency level as compared to your peers in the industry Where is your team s level of expertise and skill related to value analysis We all know that they are proficient in their respective areas but the new level of value analysis is going to require a whole new degree of advanced training and understanding to weed out all of the quality benefits and utilization savings for your organization. Ask these important questions. When was the last time you or your team had any training in an intermediate to advanced level of value analysis or related education How can you focus your program s efforts in the right direction when everyone may not be on the same page With multiple members and multiple teams you can no longer rely on your team members to just get it. Eventually you need to ensure that they are in the game right away. You have to set them up to win at the next level of the VA game. With all of the Continuing Education Units (CEUs) required for all of the clinical and non-clinical areas of healthcare you can easily say that ongoing training is always part of the job. With this in mind do not underestimate the value of training in the world of value analysis. It will pay your organization back in dividends 20 fold or more and will make you and your team more efficient with better results. Look for the best training in the industry and plan to make it part of your value analysis program on at least an annual basis from now on. Train yourself and your team for success Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 7 Feature Article Robert T. Yokl A Blueprint for Greater Performance and Focus In Value Analysis and Supply Utilization Management Your Pathway to the Future of Value Analysis and Utilization Management Robert T. Yokl President SVAH Solutions We know from experience that any system as a whole is greater than its parts. It s the same with value analysis (VA) and supply utilization management (SUM) practices. As standalones the savings techniques of value analysis and supply utilization management can be very effective but employed together they can be greater than their parts more comprehensive more savings achieved and with more long-lasting results. Understanding the Relationship Between VA and SUM In the traditional sense value analysis is the study of function and the search for lower cost alternations. Yet to truly choose the lowest cost alternative between the available options value analysis practitioners need to look at the new or existing product service or technology s utilization (or lifecycle) cost. Therefore the relationship between value analysis and supply utilization management is the difference between selecting and maintaining the lowest cost commodities imaginable or just good enough supply chain expense management thinking. In this era of lower reimbursement and higher quality standards good enough thinking just isn t good enough for your healthcare organization to stay afloat in these turbulent times. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 8 Feature Article Robert T. Yokl Why Do Less When You Can Easily Do Even More to Save Money That brings me to my message in this article Why do less when you can easily do even more to save money by integrating supply utilization management into your value analysis process. For instance why would your value analysis team select and then approve a new lab test that will cost your hospital 0.10 more per test (this is your utilization cost not your contract price) than your current lab test You would say that would be crazy for your value analysis team to make this decision but that is the type of costly decisions your VA teams are making every day if you are not merging supply utilization management into your value analysis process. Do you get this powerful idea Getting Past Price Thinking Can Increase Your Savings by 7% to 15% Another challenge that is holding back the merger of VA and SUM practices is value analysis practitioners getting past their price thinking mindset. Here s why. Your group purchasing standardization capitation constructs and custom contracts are only yielding your hospital system or IDN 1% 2% or at best 3% annual savings (The Formula Total annual savings Total supply chain budget). Conversely your SUM savings could be in the range of 7% to 15% annually. Don t hold on to the past (VA) when the future (SUM) is your pathway to more and better future savings. The Supply Chain Expense Big Picture In the 21st Century Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 9 Feature Article Robert T. Yokl It s getting harder and harder in healthcare to save money on supplies because the ripe fruit has been picked on your products services and technologies especially if you are only depending on price value analysis and standardization (22% in combined savings opportunities annually) efforts to carry the day. Equally important is the 78% in supply utilization savings opportunities that is being overlooked underutilized or ignored by most healthcare organizations in the country. How can healthcare organizations bridge the savings gain without adding supply utilization management to their VA program Bridging the Gap Getting Ready for Supply Utilization Management Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 10 Feature Article Robert T. Yokl 1. Find the supply utilization misalignments in your healthcare organization and stop their negative effects from hurting your bottom line. Can you imagine the millions of dollars (yes I said millions) in supply utilization savings just waiting to be saved at your hospital system or IDN This is the reality of supply chain organizations today. 2. Buy make or rent technology to do the heavy lifting (normalizing stratifying cataloging organizing analytics and analysis) to enable your value analysis teams to identify quantify manage and control your supply utilization misalignments going forward. Trust me when I say that without technology you will only be touching the edges of your supply utilization savings for decades. 3. Find the quality gaps that will be revealed in your supply utilization reports. It s a little known fact that overutilization of your products services or technologies can and will cause big quality and even productivity gaps. For instance if nurses are changing patients I.V. sets prematurely this could not only cost your hospital money (supplies and labor) but could also cause unnecessary patient infections. 4. Train your value analysis teams to win the supply utilization game. Supply utilization isn t something your value analysis teams can learn on the job. They will need in-depth training to be proficient in this new supply chain discipline. This four-step plan is really a shortcut for your value analysis supply utilization management success. To ignore any of these steps could be a fatal mistake. The Future Is Now This Is Your Time to Shine Value analysis has a 76-year tradition of adding new cost and quality techniques refinements and new elements to its methodology to make it even better. I predict that the integration of value analysis and supply utilization management will be one of those leap frog successes in the annals of healthcare supply chain expense management. Our healthcare organizations are depending on us for more savings and quality improvements. We need to meet this challenge head on. Remember failure is not an option. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 11 Utilization Management Robert W. Yokl Supply Utilization Management Flavor of the Month Fad or the Next Mission-Critical Cost and Quality Control System Supply utilization management (SUM) has its origins in the accounting world where it is known as activity-based costing (ABC). The best mainstream adoption of this ABC methodology in healthcare to date is in the form of budget to FTE reports. If you have ever managed employees at your healthcare organization then you have probably seen your share of productivity management reports in the form of full-time equivalent employee (FTE) reporting. This can be comparing budget which is volumebased to the department s actual cost per operating metric and is normally run on a monthly basis. Just about every healthcare organization runs some form of this report to keep track of their productivity and labor budgets. If you have not seen one of these reports ask your boss to share their report with you. I guarantee they receive one at least once a month. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 12 Utilization Management Robert W. Yokl Your CFO s Trusted Report Methodology Can Work for Supply Chain A typical budget to FTE report issued by your Finance Department is based on projected volume (budget is projected) as compared to your actual volume at which your department is really performing. Many hiring and employee replacement decisions are based first on looking at these reports to ascertain whether the position is needed based on budget and volume requirements. If for example a respiratory department that is running 2 to 3 FTEs below their normal strength and are requesting just one new hire as a replacement then the CFO COO and HR department have no problem approving the position for hire. Why Because they are showing that they are truly running below standard. However if you don t hire at least one or two full time employees then your respiratory department could have trouble covering all the procedures and maintenance that is required at the hospital. Delaying or doing nothing could result in a huge quality problem due to lack of manpower. Easier to Pinpoint Supply Budget Overruns Supply utilization management is not yet in the mainstream of missioncritical systems but it can certainly perform the same functions as the budget to FTE example that is in fact a mission-critical report at hospitals. All hospitals have supply budgets that are set out to monitor the fluctuation of costs by department. But these are global measures that are non-specific beyond telling you how much you are over budget. For example OR ED and ICU are running over in their supply budgets - now what Keep in mind hospitals purchase anywhere from 5 000 to 25 000 products services and technologies on a continuing basis therefore a supply budget report is not specific enough to take focused action on products categories of products. These individual departments could use 2 000 to 5 000 products between them all. We need better systems to help pinpoint the root causes and the solution is SUM. Utilization Case Study Highlights Not Only Cost Issues but Quality As Well Once a department goes over budget it is difficult to ascertain where and when this cost increase occurred not to mention what products are affected. One of our client hospitals was running at near best practice levels on their cost per adjusted patient day on blood collection needles but then this suddenly increased over a 6-month period by over 200%. They had a major increase in cost based on volume of the department but they should also have looked at this from a quality and performance perspective as well. Does a 200% increase mean that the hospital s phlebotomists are sticking their patients twice as much Could this increase be a quality problem with the safety blood needles or their associated vacutainers Or is the proficiency of the phlebotomists decreasing (which would require in-servicing or additional training) Let s also think of it this way If phlebotomists are sticking more the possibility of bloodstream infections increases which could cause the hospital to lose reimbursement. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 13 Utilization Management Value Analysis Root Cause Analysis System for the Future Robert W. Yokl If your departments are over budget and certainly there are some that are wouldn t it be nice to know what products or category of products or services are causing these departments to be over budget SUM can be that simple root cause analysis report to aid supply or value analysis professionals in assisting their departments with their budget overruns. Plus it will help negate the inevitable supply chain needs to get us better pricing excuse that we hear from our departmental leaders when they go over budget. In the blood collection needle example above if supply chain was able to eke out an additional 10% to 15% in price savings (which are already pushed to the limit) the department s overall cost would still be 85% over where it should be. No supply or value analysis team pricing improvement can win that cost battle alone. Trusted Mission-Critical ABC Systems are Used Throughout Our Hospitals Systems and IDNs but Are Still Missing from the Supply Chain -Why We use activity-based costing in our day-to-day operations to manage productivity and performance at our hospitals systems and IDNs so why don t we use this mission-critical system in our supply chain in the form of supply utilization management When we are able to uncover a major utilization management issue through a VA study we are ecstatic with the savings we bring about and the results we find. Why don t we report on all products then We use procedural-based activity-based costing for specific surgical cases and procedures that works very well such as cost per orthopedic case or cost per endoscopy procedure. These are activity-based costing systems that are mission-critical at our hospitals. So why aren t we adopting supply and purchase service utilization systems at our hospitals systems and IDNs as the next level of mission-critical cost and quality control of our products services and technologies Only you can answer that question Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 14 Value Analysis Advantage Software - Analytics - Support - Actionable Reports Advantages that Take Your Value Analysis Program to a Whole New Level of Quality and Savings Performance Learn More today at www.ValueAnalysisAdvantage.com VolumeCall 1-800-220-4271 or email us at sales svahsolutions.com Healthcare Value Analysis & Utilization Management Magazine 15 or 4 Issue 2 Leadership Interview Value Analysis Leadership Interview Beth Potter RN CMRP CVAHP UnityPoint Health Des Moines IA Mary (Beth) Potter is the Immediate Past President of the Association of Healthcare Value Analysis Professionals. She is also a Certified Material Resource Professional Certified Value Analysis Healthcare Professional and Director of Clinical Value Analysis and Pharmacy Contracting at UnityPoint Health in Des Moines Iowa. It was a landmark event when AHVAP unveiled their value analysis certification program at the association s 2015 annual conference. With this said we asked Beth Potter to answer the following questions to give our Value Analysis & Utilization Management Magazine readers the background on this important value analysis educational program. (SVAH) How did the CVAHP Certification program come about (BP) One of the goals of AHVAP s original founders was professional certification. They felt strongly that Healthcare Value Analysis Professionals should be recognized for their expertise through the distinction of certification. (SVAH) Why was the timing right for this CVAHP certification program for the healthcare supply chain Over the past 13 years the organization has Volume 4 Issue 2 grown from 30 members to over 300 members. In 2013 we determined we finally had the resources and network of professionals to create the curriculum and generate the test. More than 35 experienced value analysis professionals invested over 1000 hours on top of their day-today jobs (SVAH) Why did AHVAP partner with Owens & Minor University (OMU) and AMP for the implementation of the CVAHP certification program In our process of fact-finding about establishing a certification program we recognized we needed to establish a structured accredited program in order to offer consistent comprehensive education on a flexible schedule to meet the needs of our members. We evaluated two different providers and made the decision to partner with OMU for education based on their experience (continued on page 18) Healthcare Value Analysis & Utilization Management Magazine 16 Value Analysis Professional Certification is Here As Healthcare Value Analysis becomes more integral to healthcare s financial viability the need for a credentialed industry standard is greater than ever before Introducing the industry s first and only healthcare value analysis credential--Certified Value Analysis Healthcare Professional AHVAP is nationally recognized as the preeminent clinical resource in providing education resources and networking to value analysis professionals and promoting value analysis in the healthcare community. Value analysis professionals drive value for their organizations by collaborating with clinicians and multi-disciplinary teams on ways to deliver optimal patient outcomes in a cost-effective manner. AHVAP s mission is to provide and promote processes and information to assist value analysis professionals in evaluating healthcare services for clinical quality and cost effectiveness. Volume More Healthcare Value Analysis & Utilization 17 Learn 4 Issue 2 About Certification Today Management Magazine WWW.AHVAP.ORG Leadership Interview with other healthcare organizations and their demonstrated support for AHVAP. The purpose of the education is to teach the skills required to successfully practice as a healthcare value analysis professional. The objective of certification testing is to validate that the candidate possesses the knowledge required to successfully fulfill the role of a healthcare value analysis professional. There are rigid controls and standards for certification testing. The teaching organization cannot conduct certification testing. OMU recommended working with AMP to format and rate the questions generated by AHVAP members and assist AHVAP to establish a passing score based on standard testing principles. AMP provided the psychometrician AHVAP members developed the curriculum contributed the educational content and generated all of the questions. (SVAH) Who are the ideal candidates for the CVAHP certification program and where does their level of expertise need to be prior to applying for the program The Healthcare Value Analysis courses are particularly valuable to someone new to their role. The information provides a solid foundation of skills and knowledge to help them understand their role and responsibilities and equip them to execute them effectively. Experienced healthcare value analysis professionals may struggle with certain aspects of their job and would benefit from a little refresher. Completion of the CVAHP course work is not required in order to be eligible to sit for the CVAHP exam. Beth Potter To sit for the certification exam the best teacher is experience Only experience provides a value analysis professional the opportunity for practical application of their education and it does not happen overnight A candidate with a high school education must have at least five years of cumulative experience in a value analysis role before they are eligible to sit for the exam. Candidates with at least two years of post-secondary education must have at least three years of cumulative experience in a value analysis role before they are eligible to sit for the exam. (SVAH) How does the CVAHP certification work in practice CVAHP certification recognizes the candidate possesses the skills and abilities required to function successfully as a healthcare value analysis professional. Many organizations award achievement of certification with increased responsibility salary and professional recognition. Certification signifies professional expertise and accomplishment. (SVAH) What can the CVAHP certification do for the success of a value analysis professional now and in the future CVAHP certification for healthcare value analysis professionals is comparable to CMRP designation for supply chain professionals or any other specialized certification. CVAHP certification brings professional credibility recognition and positions value analysis for career advancement. CVAHP certification will be a requirement for advanced value analysis professional positions. 18 Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine Ask yourself this important question Would you rather be aware of where all your utilization savings reside today or would you rather risk your supply chain s future by not knowing and then getting blindsided somewhere down the road Protect Your Supply Chain s Future--Awareness is Your Strategic Ally There is a strategic shift in our industry. Are you seeing it It is the result of your hospital system or IDN needing all of the savings it can muster just to stay in place. Saving the old ways is not enough to keep you from getting blindsided. To protect your future you will need to have multiple sources of savings (i.e. price standardization and utilization) to prevent the loss of control of your future. Dramatic Case Study of 403-bed Community Hospital Until two years ago there was a 403-bed community hospital that was 100% dependent on price and standardization savings for its survival. Unfortunately it was running out of these savings. That s when SVAH came along with our three-prong approach to savings price standardization and utilization. With SVAH s help this healthcare organization is now on track to save 235 098 (1%) on price 4 671 428 (15%) on utilization and 2 363 391 (18%) on their purchase services or a total of 7 269 917 (11.3%). Is this the kind of savings that your senior management is strategically looking for Nothing Lasts Forever If you think your price savings will last forever you are sadly mistaken. It s now time for a strategic shift in your supply chain expense management if you are to protect your future. Yes 407 healthcare users can t be wrong your regional GPO will give you a small bump in your price savings for a few years however this is a short term tactic not a solution to your cost challenges. Only by making a strategic shift can you be assured that you won t run out of savings. Learn more about how partnering with an expert third-party supply chain organization can bring about major savings dividends and protection for the future for your supply chain savings programs. Just visit our website (below) to see how we can make this happen. Call Us Today at 1-800-220-4274 or Fill Out the No Obligation Contact Form to See the Latest Savings Technology at www.ProtectYourSupplyChain.com Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 19 Value Analysis 101 Robert T. Yokl Four Essential Productivity Tips for Value Analysis Practitioners No longer can value analysis practitioners just evaluate new products for their appropriateness quality and their safety features. VA practitioners now need to be more productive in their practices since time and resources represent money too and need to be managed effectively. Value Analysis Teams Can Be Very Costly Some hospitals systems and IDNs have six eight or even twelve value analysis teams with 10 to 15 members who meet monthly for one or more hours. Do you know what your VA meetings are costing your healthcare organization For example it is my estimate that it is costing a hospital system or IDN with six VA teams (six teams x 10 members x 1 hour [60 hours x 27.00 average hourly rate] a minimum of 1 620 per meeting. Even if you only have one VA team with 10 members meeting monthly it is still costing your healthcare organization 3 240 annually (at a 27.00 hourly rate). This figure does not include benefits or the hours spent by team members outside VA meetings investigating new product service or technology offerings. As you can easily see your value analysis meetings can be very costly even if you are saving money at each and every VA team meeting. Do You Need a VA Team to Evaluate Every Offering With the above in mind the first value analysis time and money saving idea I recommend is to only have your value analysis teams evaluate products services or technologies that have an annual purchase value of 25 000. You can decide on higher dollar amounts if your hospital has over 100 occuVolume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 20 Value Analysis 101 Robert T. Yokl pied beds. This one change in your value analysis policy could cut your VA meeting agendas in half and make them more productive. This doesn t mean the remaining products services or technologies aren t evaluated for appropriateness quality or safety. It just means that these commodities are now evaluated by your hospital s buyers along with the customers that would be effected by any change. Trust me when I tell you that this change in your VA policy won t detract from your VA program but will enhance it since your VA team members won t be overwhelmed by the volume of products services and technologies they need to evaluate. Convert Your VA Committee and Team Members to Project Managers One of the most effective value analysis productivity management techniques we have discovered and promoted is to convert all of your VA team members to project managers. You do this by assigning a VA project (i.e. product service or technology evaluation) to each of your team members. If you have 10 team members then you have 10 VA projects started at one time. The process is then repeated as each project is completed. This VA project team model also gives you clarity visibility and accountability on all of your value analysis projects since at each VA meeting you have your 10 project managers report on the progress of their projects. You will also need a team leader who should be one of your hospital system or IDN s department heads to lead coach and guide your VA team s efforts. Ideally as a value analysis practitioner you would facilitate (e.g. active listening ask questions encourage participation etc.) these VA meetings not lead them. 90-Day Completion Timeline for Each VA Project Another big time and money saving idea is to have all of your VA projects have a 90-day completion timeline. This means that if your VA project managers don t have their VA projects completed within 90 days they need to have their projects reviewed by your value analysis steering committee (I hope you have one) to obtain a 90-day extension on their project. Otherwise your value analysis projects could go on forever without a conclusion while costing your healthcare organization hundreds or even thousands of dollars unnecessarily without an adequate return-on-investment. Return on Investment Should Be Your Measurement of Success There are many metrics (e.g. money savings projects completed quality improvements etc.) that can be used to measure the success of your value analysis program. I would suggest that the best measurement would be return on investment (i.e. annual savings labor capital investment to attain savings ROI) which encompasses not only the money you saved but the labor and capital that was invested to save the money. For example if you saved 10 000 and invested 1 500 to do so your ROI is 7 1. This number rightly reflects your value analysis productivity too which is becoming just as important as the money you save your healthcare organization annually. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 21 SVAH Solutions - 800-220-4274 www.SupplyUtilizationAdvantage.com RIGHT TOOL makes all the The DIFFERENCE Rapid Savings and Quality Results Beyond Price Eliminates Waste and Inefficiencies to dramatically lower your cost per patient day Gives back time to your clinicians by identifying supply misalignments & rework Adds an Additional 7% to 15% in savings to Your Total Supply Budget Allows you to strategically manage where to attack your supply utilization Fuels the agenda of your value analysis teams with new savings opportunities. Engages your clinicians and department heads in real world evidencebased data discussions that gain buy-in. The average IDN system can save more than 3 to 5 million per hospital in 6-12 months. This represents 45 to 75 million in added revenue that would have to be generated to achieve the fast bottom line results with the Utilizer System. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 22 Why Do SVAH Clients Employ the Utilizer System We have solid VA committees analytics and great people but we deployed Utilizer because of the maturity of the software working experience support and training behind the system that fast-tracked our supply utilization program from a basic beginner stage to advanced expert in less than 45 days The Utilizer Supply Utilization Management System simplifies the work of organizing categorizing analyzing identifying and then eliminating your system or IDN s supply utilization misalignments Volume 4 Issue 2 Sign Up for a FREE Walk Through at Healthcare Value Analysis & Utilization Management Magazine www.SupplyUtilizationAdvantage.com 23 Clinical Value Analysis What s Your Value Analysis Onboarding Process James Russell RN-BC Value Analysis Facilitator UF Health at Jacksonville What s your value analysis onboarding process During an interview for a Value Analysis Facilitator (VAF) we had a candidate ask this question. We looked at each other and thought Well we show you where your office is give you a code to get into the computer and off you go Of course that s not what we said. It was however an excellent and appropriate question. Value analysis is a relatively young profession when compared to nursing medicine materials management sterile processing and central supply (all departments that value analysis interacts with routinely). Most VAF s (but not all) I know are nurses so I ll analogize this to nursing. In the 1980 s when I was a new nurse (probably before some of you were born) my orientation consisted of a 12week critical care course and then 12 more weeks of working alongside clinically expert preceptors who tried to keep me from killing my patients. I m being facetious. Sort of. The point is I went through numerous procedures to ensure I was ready to do my job before I was ever on my own including competency checklists actual exams (both written and hands-on) and return demonstrations of the management of complicated equipment such as intra-aortic balloon pumps (IABP s) mechanical ventilators and cardiac defibrillators. In my value analysis orientation 20 years later I was shown my office and told Good luck Now go save us some money Not really but not all that far off either. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 24 Clinical Value Analysis James Russell The point here is that reliance upon an individual hospital to orient a new VAF can be sketchy at best. There may be thousands of nurses in the hospital and a well thought out orientation process... but there may only be one or two VAF s in that same hospital. Who orients them Luckily there are some resources available to help. When I began my official value analysis role in 2008 (I had been doing it unofficially since 2005) I was lucky enough to be part of an academic medical center that was a member of the University HealthSystem Consortium (UHC) which had a formal value analysis orientation. This consisted of a full week of training with other new VAF s at their Chicago offices. A large portion of the curriculum was geared toward project management and how to run a meeting. The information was quite helpful. What was even more helpful was the connections I was able to make with the folks doing my job in other facilities (they had the forethought to include experienced VAF s as guest instructors). Again with a normal nursing job you are not the only critical care nurse in the hospital and you have someone to help you clarify what CVVHDF is. VAF s usually don t actually have many peers in their own facilities. Having a manager or director at the same level doesn t make them a peer. Having access to a network of colleagues that I could bounce ideas off of and run stupid questions by was invaluable. At the time I had a boss who d often say There are no stupid questions just stupid people who ask questions. That certainly kept me from asking him what PPI meant the first time I heard it But I could call Barbara in Charlottesville Joan in Birmingham Jen in Chicago Kathy in Ann Arbor John in Los Angeles Kamy in Denver or Dorcas in Portland and say What in the world is PPI They d patiently guide me through physician preference items without bringing up that I d asked the same thing two months ago. Again access to this kind of network was invaluable. Luckily we all have access to the Association of Healthcare Value Analysis Professionals (AHVAP) which has a wonderful blog on their website. It s a great place to ask questions and share knowledge. Another source for new VAF s is this magazine you re reading right now While there are some great articles in other magazines such as Healthcare Purchasing News or Nursing Management they are not completely devoted to value analysis. This one is. Additionally I found out about the power of attending conferences. As a Nurse Manager and Nursing Director I had attended many national conferences before and thought of them as basically an excuse to travel somewhere. NTI is in Vegas I m there But value analysis conferences are different. I ve learned some really important lessons there. If I can steal a quote from someone I can t remem- Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 25 Clinical Value Analysis James Russell ber If intelligence is not repeating your mistakes then wisdom might be not repeating the mistakes of others. Here s a great example of getting an idea from a colleague and running with it. I learned from Cindy at a national conference that there was interesting clinical evidence regarding the effectiveness of thigh-high vs. knee-high sequential compression devices (SCD s). When I got home I did the research noted the tiny P-values that were statistically insignificant converted almost all of my hospital s thighs to knees and saved my hospital nearly 6 figures by altering our utilization of products we already bought. A year later doing our follow up with clinical (and not just financial) data we discovered our DVT PE rates (blood clots) had actually gone down (possibly from increased patient compliance with the more comfortable size). This is the very embodiment of a value analysis win-win . An improvement in patient outcomes and a decrease in direct supply costs. We didn t even experience a change in our products (the pain of conversion) or pricing (the pain of negotiating). When bragging about this project to another peer Todd from LA County he said Well done you ve graduated from Value Analysis 101. Way to go. I was initially kind of offended at this but soon realized that he was right. I was still new and there was a lot more to learn. For example the term utilization is a value analysis buzz word (it s even in the title of this magazine ) but what does it actually mean Here s another real-world example that may help explain it to new folks. Suppose your hospital pays 8.00 for a disposable pulse oximetry (POx) sensor (Sp02) and you buy 100 000 of them annually. Do the math and you end up with a significant annual spend of 800 000. When negotiating prices there s only so far you can go. Perhaps you can threaten to move to a competitor and even perform a clinical evaluation (of what amounts to Coke vs. Pepsi based on the evidence). Suppose you re able to negotiate a savings of 0.25 per POx sensor. That s 100 000 quarters. 25 000 in annual cost savings. Well done Here s a different project with the same product... Suppose your hospital performs 15 000 surgeries annually. In pre-op you place a pulse oximetry (POx) sensor on every patient s right hand because the vital signs monitor is on that side. When the patient rolls into the OR you place a POx sensor on every patient s left hand because the anesthesia machine is on that side. Every patient that rolls into PACU (the Recovery Room) has two POx sensors one on each side. The nurses in PACU are the ones who alerted you to this Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 26 Clinical Value Analysis James Russell We have found that by moving the pre-op machines to the other side of the bed you ve saved 8.00 15 000 times. 120 000 in utilization savings Wasn t that more fun Utilization analysis is like detective work. Sure negotiating can be fun too but there are probably folks in your organization that are better at it than you (Purchasing for one). Nobody does product utilization but you. This can be your wheelhouse. You are the translator. You can explain continuous veno-venous hemo-diafiltration and IABP s to the operational folks in Purchasing Contracting and Finance. You can also explain what SKUs POs and FMV is to your clinical folks. You re the perfect liaison I dislike that word (not sure why) but it s accurate. Here s the point...use your connections. I went to a conference got an idea and saved my hospital 90 000. That s enough to send me to a lot more conferences Value analysis conferences are much more interactive than the average and you might actually learn some nuggets of wisdom that you can take back with you. My friend Neil from Richmond went to a conference and came back repeating the same phrase over and over regarding challenging the status quo Culture eats strategy for breakfast. I don t remember the source of the quote but how apropos to value analysis I call it kicking anthills and watching people get hysterical and say the sky is falling but that s probably offensive to someone. Having access to an email listserv or a blog on a website or an article in a magazine or a conference or a WebEx can provide priceless insight into this fascinating world we call value analysis. You really don t have to re-create the wheel. Jim Russell is a Value Analysis Facilitator UF Health at Jacksonville and has more than 25 years of nursing experience specializing in critical care and psychiatry. He has 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 James.Russell jax.ufl.edu Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 27 Sign Up for Your FREE Subscription to Healthcare Value Analysis Magazine Today www.ValueAnalysisMagazine.com Click Here to Sign Up for Your FREE Subscription Now Did You Know In 2014 U.S. employee engagement stood at just 31.5% . Productivity cannot improve until employee engagement does ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Finally there is a resource that addresses employee engagement both at work and at home. The Fifth Element Employee Newsletter Providing Inspiration and Supporting Wellness Learn more at www.Valumatrix.net. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 28 The Last Word Products or Outcomes What Are You Buying Lynn Everard Managing Director Valumatrix LLC In today s healthcare world there are only two things for sale products and outcomes. In the hospital supply chain we have a long history of bringing down unit product acquisition costs. But we have exhausted the easy money of haggling over price and we are likely not putting as much in savings to the bottom line as we were in the early days. Once an item is commoditized additional effort at lowering its price is like burning hundred dollar bills to light our search for pennies in the dark. Now we like other parts of heath care and other industries are starting to realize that we do our best work on the bottom line when the top line is robust and growing. And that is supply chain and value analysis s new opportunity. How do we take a supply chain function and turn it into a powerful support for increasing revenue for our facility One answer to that question is outcomes. Clinical outcomes are the result we get when we combine the right products with the skills of our clinical team. When patient care is improved through measurable results when patient satisfaction increases and the total cost of doing both goes down - that is a powerful outcome. This is where the product supplier gets to choose between just selling us stuff and becoming partners in our success. The ideal partner knows that the best way to sell their product is by working with us to optimize our use of their product in producing superior clinical outcomes even if it means selling us fewer units of their product. The ideal partner knows that building a long term value relationship is far more important than making a quick sale of a high volume of products. What makes a sales representative an ideal partner Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 29 The Last Word Lynn Everard 1. They understand that the relationship creates the sale not the other way around and that real relationships take time. Most of us know when we are being sold and we don t like it. We also know when someone is pretending to be friendly to get the sale. Recently on LinkedIn a number of people have posted a message that says something like this Don t you hate it when someone asks you to connect with them and then five minutes after you do they are trying to sell you something 2. They ask good questions and they listen to your answers. We have all had conversations with people where we just knew they were not hearing anything we said because they were busy thinking of the next thing they were going to say. 3. They listen to your questions and provide answers when they have them. They know that even if we are in a hurry the right answer will always serve us better than a hasty wrong answer. 4. They work for a company that truly values its employees. Your supplier can never value you if the employees who work there are not valued and that includes your sales representative. 5. They value you as a person. You are not just some gate that they have to come up with a way to get past. You are treated with respect but not kept at a distance. 6. They have studies that point to the value of their products in achieving outcomes. By now we hear the term evidence based medicine in our sleep. Yet how often does a representative try to sell a product with no supporting outcomes data 7. They are committed to quality. They know that quality is not just the absence of manufacturing defects but is the presence of positive attributes that will have a meaningful impact on clinical outcomes. Quality is not just a product characteristic it is a state of mind and a practice that is instilled into the culture and baked into every product. 8. They stop selling. It may take a while but when the sales representative stops selling the focus product for the month and simply engages in discussion about how they can help you improve your clinical outcomes you know you have a partner. Lynn Everard is Managing Director of Valumatrix LLC. Valumatrix delivers strategy content and messaging for a rapidly changing world. Their newest offering is an outsourced employee newsletter that provides inspiration and supports wellness. Valumatrix is an NCI Partner. Contact him at leverard valumatrix.net. Volume 4 Issue 2 Healthcare Value Analysis & Utilization Management Magazine 30 Finally A Proven System That Engages Clinical Department Leaders to Save Money in Supply Utilization Why Do Clinical Departments Need Only Clinical Departments Can More Proof Than Just Total Spend Control Their Clinical Departmental Supply Utilization Supply and Value Analysis Managers have been challenged with providing evidence to show where clinical departments supply utilization is running over. Normally when the utilization overrun is brought to the clinical department managers attention in the form of spend totals their first reaction is that patient volumes or acuity was high for the period. That is where the conversation usually ends and that is where huge dollars are tied up in your hospital s supply chain. How do we provide the proof clinical departments need when it comes to supply utilization Clinical departments have traditionally managed the supplies that are used for care on their patients but they have been doing this without a solid reporting system to tell them where they can do better based on patient volumes and acuity. With a system in place clinical departments can now visualize all of their major supply categories and make the necessary adjustments which in turn will save big dollars (11% to 23% supply utilization savings per clinical department) for the hospital. Clinical Departments Are Not Cost Management Adverse Clinical departments are not cost management adverse. On the contrary they will help manage utilization costs but require solid evidence when it comes to their major and minor product category overspends. Supply and Value Analysis Managers have been able to keep costs low for many years with various value analysis and contracting strategies but there comes a time when the clinical departments must learn where they need to do better. 3.8 Million for 350-Bed Hospital Recently a 350-bed hospital reported clinical departmental savings of over 3.8 million. Why so much savings Because they had never taken the utilization reporting to the departmental level and thus the savings were low-hanging fruit when it was brought to the clinical department leaders attention. Clinical Department Utilization Manager software made it easy to pinpoint the exact category in the exact nursing unit and the exact product(s) that were causing the overspend. Prior to this they did not have any idea where to look or how to prove the savings to the clinical department leaders. No More Guessing Where Utilization Savings Are Hiding In Your Clinical Departments Goes Beyond Supply Budgets to the Actual Utilization for Each Department by Major Supply Category No More Pushback from Nursing or Clinical Departments on Savings Drill Down to the Exact Product that is Causing Your Utilization Cost Overrun Sign Up for A FREE Test Drive Today of the Clinical Department Utilization System www.ClinicalSupplyUtilization.com A Software-As-A-Service brought to you by Strategic Value Analysis in Healthcare Skippack Pennsylvania Volume 4 Issue 2 29 Years as a Trusted Leader in Supply Value Analysis and Utilization Savings Strategies--Making Savings Easy for You Healthcare Value Analysis & Utilization Management Magazine 31 Uncovering the product and category specific small data trends that lead our clients to their own unique big utilization savings Utilizer Utilization System Fast-Tracks Savings & Quality Results If you could click your mouse and find out where ALL of your supply utilization savings opportunities are hiding that represent 7% to 15% of your total supply budget wouldn t you want to know Revenue increase is based on the revenue to profit ratio necessary to bring about the profits that the bottom line savings represents Call or Visit SVAH Solutions Today for a FREE Walk Through Volume 4 Issue 2 Healthcare www.Utilizer-Dashboard.com 800-220-4274 or Visit Value Analysis & Utilization Management Magazine 32