Archive for 'March 2016'
- The program has given a vocabulary to our clinical team on how better to relate when talking value analysis with suppliers. We have surgeons who are asking whether suppliers are above the line, and about their price index. That's a big win.
- Where there used to be mystery about preferred suppliers, the program makes preference more transparent, and both supplier and clinicians know the rules.
- It gives suppliers a benchmark, so we can collectively spend our bandwidth on the things that matter. Once a supplier is above the line, the conversation is raised to a different level, strategizing about unique representation models and quality improvement efforts. This resembles relationships that other industries have with their suppliers.
- It is a constant evaluation process. Every quarter we evaluate our list and determine if prices crept up and review any customer service companies. The vendors are being held accountable, and take steps themselves to remain "in the club." It's positive reinforcement, too. When they're above the line, they like to show us they're part of the club. They are motivated by it as well.
- They understand where your hospital network (and each of its facilities) fall on the demographic, financial and payer continuum.
There are two realities today based on where a hospital is located, the population it serves and what kinds of payments it receives. Hospitals in states or regions where the revenue stream is primarily Medicare, Medicaid or self-pay focus more on cutting costs and are motivated to standardize their products. In hospitals that primarily serve those covered by private insurers in a managed care/self-pay setting, there’s less pressure to standardize.
- They understand how physician preference items affect sourcing decisions.
Physicians’ product preferences (and hospitals’ desire to retain physicians) can make the standardization of high-tech items difficult. Doctors who bring a high volume of cases to a facility will more likely to have his or her product requests fulfilled. Originally, the expectation was that once a physician sold his practice to a hospital network, that doctor would be more compliant with the hospital’s standardized product. However this expectation hasn’t become reality. The physician’s preference, the amount of cases they bring to the hospital and the revenue these cases generate determine what products a hospital buys and how they’re utilized. At HCA’s Florida facilities, we standardized on one supplier for a drug-eluting stent. Doctors at these facilities either adapted to the change or moved on. In HCA’s Denver division, there was more physician resistance to standardizing that product.
- They have a demonstrated compliance portfolio.
One product that HCA considered for standardization was a trauma implant. The company with the less expensive product had not prepared a full compliance portfolio, so it was rejected.
- They document and present clinical evidence.
As a hospital moves from the easier standardization purchases of commodity items to high technology products, it’s often difficult to purchase just one high tech product in a category. That’s where clinical evidence comes in. Is Company A’s clinical evidence better than Company B? Company C? What supports the evidence presented by each? HCA looks to its suppliers for proof of clinical outcomes. Is the new product a look-alike, or is there something clinically different that would justify the additional cost? If the cost is $1,000 more, the decision will not be as critical; however, if we’re spending $50,000 we have to understand the data that would justify the extra money. Solid clinical evidence will help hospitals make better decisions.
- They research and demonstrate utilization. They support inventory reduction. They know that time is money.
HCA considers how easy the product is to use, and what percentage of the time it’s being used. We’ve focused a lot of our supply chain efforts in the operating room. What is the cost of inventory? How often does inventory move? What can be standardized? How much inventory is too much? If there are three products, can we get rid of two?
One of the things HCA looks at in the OR is how the packaging, selection and opening of instruments and device packages affect turnover time. Suppliers need to demonstrate that 90 percent of the products contained in their multiple-item surgical kits are being used 90 percent of time by all surgeons.
Suppliers can educate clinicians on the importance of opening only what is needed for that case. If suppliers make sure preference cards are complete for the procedure, nurses will only open only what is needed. Suppliers can also support inventory reduction by working with managers to survey the OR after each procedure to determine what remains unopened/unused.
- They understand operating and profit margins.
These days, hospitals must examine all ways to operate efficiently. In the past, we looked mostly at how many cases doctors could support. Now we look at the cost of each procedure. Say, for example, that Dr. Brown has $500 in supply costs for a certain procedure. What’s involved in that $500? Meanwhile, Dr. Smith’s supply costs are $700. What did each use in terms of their particular facility and procedure? What are the commonalities and differences?
- They engage the hospital’s clinicians, resource directors and division directors.
At HCA, suppliers educate clinical resource directors as a group, so everyone hears same thing. If we’re sourcing two competing products, both suppliers present their story. After this meeting, suppliers set up education programs within each division in the facility. The facility’s clinical resource director needs to know where things stand in the partnership. Therefore, it’s important to meet regularly to assess product utilization and pricing, schedule education or training, and address compliance issues.
- They offer educational tools and programs to facilitate product adoption.
Because new technology always requires a learning curve, it’s important for suppliers to continually update clinicians on new products and procedures. If an influential clinician is not educated on how to use the new product, their opinion may cause the product conversion to fail. Printed information and on-demand video seminars are effective tools that clinicians can access any time, anywhere. One company HCA works with offered a video for nurses on a new procedure, followed by a knowledge quiz to test their retention.
- They partner with the supply chain managers.
To increase savings and standardize more products, HCA’s senior management works closely with its supply chain managers. Every facility has a monthly supply management meeting that includes the CMO, CFO, CFO and all those who have high supply costs: the clinical resource director, pharmacy director, director of OR, head of interventional radiology, catheterization lab director. This team reviews savings generated, pending product conversions and new contracts.
Success of any new product conversion depends on the supplier having a facility champion. What are the expectations for your contract at a facility level? Is it a sole source agreement or facility source agreement? If the product is exciting and you have clinical evidence, suppliers will have a better response. Why is it special? Why is it easy to use?
- They make the conversion easy.
If a supplier is part of the hospital’s conversion effort to standardize one of his company’s products, that supplier needs provide the hospital with a cross-reference document that includes all competing products. HCA assigns standard SKU’s, derived from manufacturers’ numbers, for every product it uses. Suppliers with a nearby warehouse / service center can ensure compliance by making products easier and faster to deliver.
- Negotiating on Total Value by broadening negotiating levers and value indicators with more comprehensive product evaluation strategies, moving beyond volume-for-price trading to consider total cost incurred over time and impact on end-user satisfaction.
- Ensuring Data Transparency - extracting value through the post-contract period by leveraging physician supply utilization data with suppliers to demonstrate contract commitment.
- Capturing Shared Value with Suppliers - A fully realized sourcing strategy lays the groundwork to explore longer-term strategic partnerships with suppliers. Progressive institutions are working with key suppliers to reduce mutual costs, realize collaborative efficiencies, and achieve better outcomes.
- What defines talent management?
- How do you prepare future supply chain leaders?
- How should hospitals develop talent pipelines?
- What is one thing hospitals can do to cultivate and invest in talent?
- What's one major skillset senior managers should look for when hiring?
- What is the weakest link within the supply chain?
- What's one action senior managers can take to fix the disconnect with supply chain?
- How is talent management key to delivering outstanding patient care?
- How can compensation be structured to attract and support talented leaders?
- Are MBA programs doing enough to develop talent?
- The Benefits of UDI
- The Impact of UDI on Patient Safety
- What Systemic Changes Will Hospitals Encounter with UDI?
- The Journey of a UDI Coded Device
- How UDI Can Lead to Tangible Supply Chain Benefits
- Putting Raw Data Standards Into Actionable Results
- The History of UDI
- Eliminate a fragmented management structure & create alignment that benefits all
- Leverage your relationships & establish integrated partnerships to influence change
- Turn big data into big outcomes and a big win for your healthcare system
- Nicholas P. Dominick, Jr., Senior Vice President, Diagnostic and Support Services, Lifespan – Providence, RI
- Charlie Miceli, C.P.M., Vice President, Supply Chain & Information Services, Fletcher Allen Health Care; Chief Information Officer, OneCare Vermont
- Erik Wexler, CEO, Northeast Region, Tenet Healthcare Corporation
- Fawn Lopez, Vice President & Publisher, Modern Healthcare
- How can you incentivize physicians?
- 7 tips to improve operational efficiencies
- How can you reduce total cost of care?
- How to evolve strategic supplier relationships
- Align strategies with internal stakeholders
- Why you should adopt a holistic view
- Using data analytics to drive improvement and performance
- Building a case with the C-suite to support investment in informatical resources
- Using big data to drive big outcomes at your organization
- How important is transparency in healthcare?
- The importance of talent management in the healthcare supply chain
- What talent do you need in today's healthcare supply chain?
- Key changes for adapting to the changing healthcare environment
- What initiatives can anyone employ to positively impact outcomes regardless of size and budget?
- How can a hospital provide opportunity to diversity suppliers while streamlining the supply chain?
- How can hospitals engage employees to improve patient flow by removing waste from the process?
- Key strategies for prioritizing and making decisions that benefit the majority
- How should the facilities maintenance organization be integrated in supply chain improvement initiatives?
- The future of self-distribution vs. utilization of a distributor
- How quickly will the value of UDI be brought into the hospital system since there's no mandate?
- How do you ensure you're targeting the right segments and addressing the right patients?
- Characteristics of a well-managed delivery system
- Nicholas P. Dominick, Jr., Senior Vice President, Diagnostic and Support Services, Lifespan – Providence, RI
- Charlie Miceli, C.P.M., Vice President, Supply Chain & Information Services, Fletcher Allen Health Care; Chief Information Officer, OneCare Vermont
- Erik Wexler, CEO, Northeast Region, Tenet Healthcare Corporation
- Fawn Lopez, Vice President & Publisher, Modern Healthcare
- What it takes to be a successful supply chain executive NOW
- Handling Physician Preference Items: Get physicians aligned with your strategy and encourage engagement and partnership between supply chain and clinicians
- Managing relationships: From the c-suite to clinicians to device and equipment suppliers, relationships are becoming more important than ever to run an effective supply chain operation. What are the secrets to good relationships in this environment?
- What is “value”? It seems there are multiple definitions of “value” when we talk about value-based care. What are they, who will decide the ultimate definition, and what does it mean for health systems?
- Optimizing supply chain in the OR: Gain visibility into the OR – what’s going on in there, and why does it matter?
- UDIs: Absent a mandate, why should hospitals care about these?
- What are the biggest challenges new and emerging leaders face?
- How do great leaders prioritize initiatives?
- What are the top 3 managerial strategies for today’s healthcare landscape?
- Are there natural leaders or can anyone become a great manager?
- Improving the understanding of utilization, performance, and safety of unique medical devices when used in practice;
- Enabling the ability to conduct health outcomes research for medical devices on a wider and more cost-effective scale;
- Enabling the ability of health plans to play a role in recall management;
- Driving higher quality care by leveraging knowledge of quality and outcomes from medical devices; and
- Better management of costs of care by increasing transparency for payers and patients in the actual devices used during procedures."
- Ed Hardin, Vice President Supply Chain Management, CHRISTUS Health; Sandy Wise, RN, Director Contracting & Resource Utilization, CHRISTUS Health discuss their views on Standardization
- Kelle Laws, RN, MN, CNOR(e), Executive Director Medical Products & Devices, ROi discusses her views on Standardization
- Sandy Wise, RN, Director Contracting & Resource Utilization, CHRISTUS Health discusses her views on Standardization
- Betty Jo Rocchio, CRNA, MS, Vice President Perioperative Performance Acceleration, Mercy discusses her views on Standardization
- Kelle Laws, RN, MN, CNOR(e), Executive Director Medical Products & Devices, ROi discusses her views on Standardization
- How is inventory management impacted when vendors are able to simplify offerings?
- How does product code reduction support your simplification goals?
- What does simplification mean to your system?
- How important is simplification to supply chain?
- What is simplification?
- How important is simplification to supply chain?
- How important is simplification to supply chain?
- Reduce time from diagnosis to treatment. On average, according to a study in the Journal of Thoracic Oncology, the process takes up to a couple months. The Lung Health Program reduced that time to less than one week.
- Reduce the number of patients with stages 3 and 4 cancers through early detection.
- Reduce patients’ lengths of stay by implementing a minimally invasive, video-assisted thoracoscopic surgery (VATS) approach.
- How would a trocar revitalization project impact your organization?
- How does SKU reduction drive standardization?
- What reduction in cost would you expect to realize due to SKU reduction?
- How has your distribution center increased efficiency with low moving SKUs?
- How has your distribution center increased efficiency with high moving SKUs?
- How does SKU reduction support your inventory management goals?
- How can SKU rationalization benefit efficient warehouse operations?
- What are the benefits of SKU reduction?
- What are the benefits of SKU reduction?
- How does code reduction support your inventory management and logistics efforts?
- Is there a benefit when you reduce product codes?
- What are the necessary steps to ensure appropriate "buy-in" from the staff to maximize success during the contract process?
- What role did Covidien play in helping you gain consensus and achieve your objective?
- What role do suppliers play in implementing change?
- How has Covidien supported your goals post conversion?
- How do you track your success?
- Why is it important to bring the right team together?
- What parameters do you measure to determine successful conversions?
- What role does the supplier play in change implementation?
- How do you approach Supplier Relationship Management?
- What is the role of your solutions providers?
- How can supply chain help nurses?
- What role do your suppliers play?
- How does supply chain use data?
- How does value analysis help surgeons standardize?
- Tell us about a successful standardization initiative?
- As a nurse, do you see value in standardization and simplification?
- How do you foster physician collaboration?
- How can you better collaborate with your suppliers?
- What is the role of value analysis in today's environment?
- Once a decision to standardize is made, what are your expectations of the selected vendor to ensure success?
- How do you balance the challenge of physician preference versus clinical acceptability?
- What elements are critical to effective decision making between supply chain and clinical care teams?
- Describe the ideal supplier interaction model.
- Describe your role in driving a decision for standardization.
- Getting started in a Lung Cancer program - defining challenges and initiating solutions
- Everyday experiences of a nurse navigator in guiding patients from screening to diagnosis
- The evolution of a Lung program - "mainstreaming" patients through the care continuum
- A live Q&A with questions asked by webinar attendees
- Examples of collaborative partnerships with suppliers that maximize financial savings through risk sharing. Watch the Fairview Health Services and Medtronic case study to view the presentation.
- Engaging lhysician leaders to deliver cost-effective and high quality care. Hear what Dr. Chung had to say.
- The evolution and impact of value analysis and big data. Learn more.
- A deep dive into the Role of Suppliers
- Francine Wilson, Senior VP, Supply Chain Management, University Health System, shares the key takeaways.
- They began to recognize the opportunities in supply chain. It’s well known that physician-preference items are big cost drivers; streamlining and systematizing those purchasing decisions became crucial to cost savings.
- Huge increases in the number of supplies and escalating cost increases — in every corner of the organization — weighed heavily on the bottom line. Today, 17 to 30 percent of the organization’s spend is for supplies.
- Over time, hospitals and growing systems began to realize they needed to become proactive in managing supply costs. A more professional approach, some borrowing largely on big corporations, became common practice. Hospitals recognized their own purchasing power and ability to engage many suppliers to provide them with added value. This led to “in-sourcing” of many processes associated with procurement and distribution.
- Dedicated resources
- Information sharing
- Identify a surgeon, anesthesia and nurse champion to lead the project design.
- Form a comprehensive multidisciplinary project team of experts and ensure everyone at the table has a voice and input in the final decisions.
- Integrate elements that are based on evidence-based practice and standardized along the continuum of care.
- Involve someone with the skills to lead the team throughout development and implementation. Some facilities do not have the time to allocate an expert; that is where a highly trained professional can step in to offer solutions and project management.
- Immediate savings in healthcare spending per patient in each of the four years the patients were tracked. Compared to the trend in healthcare spending in the matched cohort, costs fell in the surgical group by 12%, 28%, 37% and 35% in years one to four post-surgery.
- Cost savings were more dramatic in patients with diabetes. The first year after the procedure, there was a 23% drop in costs, with the subsequent three years showing reductions of 49%, 61% and 69%.
- Workplace productivity improved. This study also analyzed the evidence regarding the benefits of obesity surgery relating to workplace productivity, an important metric that not only points to an improved quality of life for the obesity surgery patients but also to the bottom line benefits of patients’ employers by reducing absenteeism.
- The stigma still attached to the disease of obesity. Obesity is considered a disease by the American Medical Association and affects millions of people across the country. Data from the CDC (Centers for Disease Control and Prevention) show that from 2011 to 2012, 78.6 million adults were considered obese or overweight, many of whom suffer from debilitating co-morbid conditions like type 2 diabetes, cardiovascular disease, and hypertension. Despite studies which show the ineffectiveness of dieting and medical management for obesity, obesity is often viewed as a life style choice or character flaw
- Some primary care physicians are hesitant to recommend weight-loss surgery. Primary care physicians are at the front line of patient care. These physicians, who are often patients’ most trusted, lifelong advisors, are often reluctant to refer for bariatric surgery. It’s vital that they have access to the latest data and guidelines for treating obesity.
- Not all insurance plans cover bariatric procedures. The majority of states do not cover the surgery under the Accountable Care Act, even though research has shown a minimal impact on premiums. Some employers who do offer bariatric surgery as part of their medical insurance package have expressed surprise that employees do not take advantage of bariatric surgery more often.
- Medically-accurate content
Because device manufacturers employ experienced physicians, surgeons and other clinicians, they possess deep knowledge not only of the procedures in which their devices are used but also the underlying disease states these procedures treat. Therefore, they can ensure that the information you are providing is accurate and medically sound – which can take a large burden off providers.
- Personnel cost savings
Creating accurate and original patient education content can be more than a full-time job. Most practices do not have the budget to employ a content creation team. Obtaining this content from industry is a cost-effective way for providers to make this content available to their patients.
- A wide variety of content
Creating meaningful content, across a wide variety of disease states, requires a large investment in time and resources – even for large hospitals or health systems. Your industry partners already devote resources to this task. They can provide practices with a breadth of patient education materials that would otherwise tax precious provider resources.
- When an organization is hesitant to invest in an expensive, new medical technology before it is proven, a risk-sharing contract mitigates the financial risk to the provider. The organization can work with the supplier to set a measurement of outcomes and will experience financial relief if the technology does not perform to these specifications.
- In situations where an organization is struggling to meet certain outcomes measures, the provider can partner with the supplier to increase data sharing transparency. Then the entities can work together using the shared data to reach the desired clinical or economic result.
- Colectomy: MIS may save nearly $12,000 more than open surgery
- Hysterectomy (non-cancerous): MIS saves more than $700 per patient versus open surgery
- Ventral hernia repair: MIS saves more than $5,000 as compared to open surgery
- Thoracic resection: MIS saves more than $12,000 when using MIS
- Communication is key.
Surgeons want to feel consulted through the standardization process. To facilitate this, executives must communicate their goals, key dates for receiving feedback, and anything else the doctors should know about. When possible, provide literature reviews related to decisions about switching products or adding new ones. Offer outcomes data for review.
- Process transparency is a must.
Surgeons — especially private practice doctors — often don’t understand the process hospitals go through when they standardize supplies. Try to explain the process and to inform surgeons about how they can participate. Urge doctors to propose new products more than once and to provide candid feedback about how the item performed, or didn’t perform, so your facility can stock supplies that work for both clinical and cost outcomes.
- Anticipate push-back.
Some people are more resistant to change than others, and surgeons are no exception. You should anticipate that some doctors will be unhappy with any supply changes. Consider making it clear you will not make exceptions to supply policies once they have been implemented. Making exceptions scuttles the value of standardization. Instead, emphasize the ways physicians can participate before final decisions are made. Fostering a participatory environment may lead to less push-back after the fact.
- A provider's current length of stay
- Complication rates
- Supply utilization and more
- Bony prominences, which can put pressure on the electrode and create current concentration
- Scar tissue and adipose tissue, which is high in impedance and tends to resist electrosurgical current. The current may then seek an alternate pathway, which could result injury.
- Areas with excessive hair, which can be clipped if necessary according to policy
- Tattoos, which can have metal flecks in the ink that may get hot and could result in injury
- Near warming devices, such as hypo/hyperthermia blankets. The warmth may dry out the conductive gel on the PRE thereby affecting its conductive properties.
- Jewelry and body piercings, which should be kept out of the electrosurgical circuit. (SeeBody piercings and electrosurgery.)
- Software-based ESUs. These ESUs can be updated with the latest upgrades to provide additional features, extending the useful life of a unit.
- Smoke evacuators, which help mitigate the hazardous byproducts of electrosurgery. It protects both patients and surgical personnel.
- Vessel sealing technology using a hybrid bipolar output. This system is used in surgical procedures where ligation and division of vessels and lymphatics is desired. It may help reduce procedure time while significantly reducing the need for suture, staples, and clips.
- Store user manuals in a handy place, such as in a drawer of the ESU cart. Nurses can often find answers to common questions about settings and error codes in user manuals.
- Keep copies of the accessory instructions for use (IFU), which contain important information, such as maximum settings or maximum peak or peak-to-peak voltages that are recommended for safe use of the accessory. This information avoids product damage.
- Create a resource binder for single-use product instructions. Frequently, only one copy of instructions is provided for a large box of single-use electrosurgery products. When the box is opened, save the instructions and store them all in one accessible location.
- Compile PDFs of user manuals and instructions. This makes it easy for staff to access them on the OR computer terminal.
- Ensure the most current manual or instruction is available. Directly contact manufacturers for their most current IFUs or User Manuals or consider subscribing to a provider that offers accessibility to a database of such documents online. Perioperative nurses can also contact the Covidien-Medtronic Clinical Hotline for User Manuals and instructions. (See Got questions? Help on the hotline.)
- Procedural starting settings for electrosurgery units (ESUs)
- Using multiple generators on one patient
- Connectivity with other equipment, such as the robot
- Electrosurgery for patients with implanted electronic devices (IEDs).
- 76% of the participants elected for MIS procedures which represented a 27% weighted increase in minimally invasive surgeries over 12 months.
- 91% of the candidates reported increased awareness/thinking around MIS options.
In 2011 we made one of the best and most effective decisions for our 730-bed hospital: We set out to adopt risk-sharing partnerships with our suppliers.
The change stemmed from a place of necessity, as healthcare was moving from volume to value. Something was missing. All that was happening was price negotiation, and we'd be back every six months reviewing prices again. We realized we needed to partner with forward-thinking organizations that were willing to change the game.
After several meetings with clinical teams, we came up with the program, "Above the Line." It evaluates prospective vendors across selective inclusion criteria spanning four areas: Vendormate credentialing, MedApproved registration and use, a Price Competitive Index of 25% or lower, and meeting or exceeding our standards for outstanding service. Under the model, the supplier’s compensation partly depends on the quality of the relationship—not the number of products sold.
The benefits so far are telling:
Brian Dolan is Director of Supply Chain and Logistics at The University of Kansas Hospital.
Unlike many of his colleagues, Joe did not start out in healthcare. Watch this short video to learn more about Joe, the family tragedy that propelled him out of the foodservice industry and into healthcare, and how he is making a difference.
Watch the video now
How can hospitals and networks evolve their supply chains to deliver value, quality and savings? How should they involve clinicians and suppliers? How can they measure success and drive continuous improvement? Joe Walsh, AVP of Procurement at Salt Lake City-based Intermountain Healthcare, has helped guide a shift in this industry-leading IDN's business focus. He's implemented best practices that address the economic realities and changing customer demographics needed to thrive in the future. Click to watch Joe present his Foundations of Supply Chain Excellence:10 Imperatives for Success.
Or click each module below to view the Imperatives on their own:
Peggy Camp knows the importance of clinical integration within hospitals’ strategic sourcing efforts. A retired perioperative nurse with more than 50 years’ experience, she was the division clinical resource director for Hospital Corporation of America (HCA) Healthcare. Responsible for supply chain savings initiatives at 11 hospitals in her division, Camp oversaw the conversion and standardization of products under new contracts negotiated by Hospital Purchasing Group/HCA. She worked closely with suppliers and negotiated locally on contracts to obtain better pricing. She participated in monthly facility Supply Management Action Team meetings to communicate new agreements, provide feedback on facility compliance, and address administration concerns on product changes that affected HSA facilities. She frequently met with key stakeholders (clinical specialists, physicians, department directors) in each facility to obtain their support for changes that were to be implemented. Peggy has published and spoken extensively on supply chain opportunities and challenges.
We recently chatted with Peggy about the challenges hospitals face in standardizing products while maintaining quality patient care. Here, she shares what suppliers must do today to earn their business.
In today’s accountable healthcare environment, where strategic sourcing influences patient outcomes, clinicians and supply chain managers are working more closely than ever to provide safe, effective and cost efficient healthcare.
The 2013 Deloitte Survey of U.S. Physicians revealed that:
Six in 10 physicians rank doctors as having the greatest influence on medical technology purchasing decisions. Half of physicians believe that when purchasing medical technology, safety, efficacy and reduction in instances of needed care are top considerations Seven in 10 physicians believe that physician-led peer review and evidence based guidelines are leading best practices when selecting and purchasing medical technologies.
Meanwhile, The Advisory Board Company’s recent study proposes that hospitals evolve their supply chain strategy to include:
To effectively serve patients while managing costs, clinicians and supply chain managers at hospital networks, IDNs and GPOs across the country are drawing expertise from across their organizations in evaluating and purchasing products. To learn how, we recently spoke with Dr. John Gillean, Executive Vice President and Chief Clinical Officer and Sandy Wise, Director, Contracting and Resource Utilization, both at CHRISTUS Health Pierre Theodore, M.D., lung transplant surgeon and assistant professor of surgery, University of California San Francisco Medical Center
What does the term “clinical integration” mean to you?
Pierre Theodore, M.D. UCSF Medical Center: Clinical and supply standardization is the phrase that clinicians use. You leverage purchasing power by trying to limit numbers and reduce price points. In end, it comes down to reducing the number of vendors while maintaining quality and achieving consistent clinical results.
I think that the concept of standardization is inherent in process of increasing safety in the medical center. Using an airline procedures analogy, standardization means having fewer places for human error and achieving better quality. In a hospital environment, we can deliver quality by reducing the systems errors that are caused by non-standardized procedures.
How are you defining clinician interactions within each of your networks’ supply chains?
John Gillean, CHRISTUS Health: In re-structuring our supply chain, we’re engaging our entire clinical enterprise – our 200 internal physicians and 8,000 affiliated medical professionals – in managing outcomes by understanding the implications of our choices.
Sandy Wise, CHRISTUS Health: The eyes and ears of our clinicians are important to ensuring safe outcomes, which is our top priority. We engage area-specific resource groups, including directors of surgery. We develop strategies and determine what aspects of each product are evaluated from both clinical and utilization perspectives. At the end of the process, we take a vote. This process helps smooth both conversion and implementation.
Pierre Theodore, M.D. UCSF Medical Center: Large capital purchases or large volume disposable purchases are areas that require a collective approach. UCSF has a multidisciplinary committee that makes decisions on how we assess new high technology products. It works similar to a legal trial: A plaintiff (the product champion) who supports acquisition of the new product makes their best argument of why it should be adopted over other products on the market. A committee panel, playing the role of opposing council, presents their arguments on why the product should not be acquired. A third component of the decision is an economic analysis. An administrator looks at variance of cost between the current and new product, and determines if costs can be rationalized through other methods such as bundling.
After the pros, the cons and the financial analyses have been presented, the committee reaches a verdict on whether the product should be tested within the hospital. After a five to six month trial period, the product’s clinical champion will again return to the committee to make case why the product is better.
Can you provide any examples of these interactions?
John Gillean, CHRISTUS Health: We recently finished a project to evaluate orthopedic implant and joint replacement suppliers. With the goal of obtaining regional and system-wide agreements, our C-suite executives and surgeons worked together to create an even playing field while maintaining several suppliers in this category.
In another example, we’re moving towards a sole supplier agreement for IV pumps based on the recommendations from nurses across the system. While a sole source agreement was not our original intent, the expertise of our nurses – who understand the considerations of providing bedside support – was a big part of this decision.
Can you provide examples of how you have been able to work with physicians and suppliers to standardize equipment/devices without compromising quality patient outcomes?
Pierre Theodore, M.D. UCSF Medical Center: UCSF went through a process of considering our choices for staplers offered by a variety of vendors. This resulted in heated discussions over a few months: Which stapler? Which stapler load? What do we get rid of? For us, standardization came through working with one vendor to get the best stapler of choice at the best price point available.
Sandy Wise, CHRISTUS Health: What we do in the OR extends to the entire CHRISTUS network. Rather than focusing on price, we’re looking at smart utilization to reduce costs. We work with suppliers to understand not only the procedures their products are used in, but also how often they are used. If we source just one of type of a specific device, rather than three, we can reduce the number of SKUs across the board.
What do you expect/require of equipment/device manufacturers in your selection of new products?
Sandy Wise, CHRISTUS Heath: It depends on the product, as each has specific requirements. The bottom line is that we will not sacrifice quality. Our selections are based on clinical efficacy, evidence based outcomes, issue resolution procedures, specific service requirements in contract language and quarterly reviews on both sides.
Pierre Theodore, M.D. UCSF Medical Center: I think that it’s not a question about whether one supplier’s device is less or more expensive. Successful suppliers come armed with the data relating to the benefits of their new product. They have set up a system to acquire data during the product’s clinical trial phase to help make their case. Successful suppliers help us get to the end point in our hospital’s internal trials so we can get that Information in front of the committee.
In your evaluation of equipment and devices, how do CHRISTUS’ medical experts balance/reconcile product efficacy, cost savings and patient outcomes?
Sandy Wise, CHRISTUS Health: We really look at the total cost and not just the price of product. We’re not going to pursue a new product unless it demonstrates clinical superiority. Is it worth going through a conversion? Is there a financial proposition? What are the clinical benefits of making a transition?
Do you provide your staff with any unique tools or training in order to provide a thorough evaluation?
Sandy Wise, CHRISTUS Health: We are in the process of developing a standard tool to guide clinicians to implement product transitions. The tool will allow doctors and nurses to use consistent, objective and evidence-based guidelines as well as document their input during the transition process.
Pierre Theodore, M.D., UCSF Medical Center: What we’re aiming to create is a very simple web based template, an evaluation system that’s specific for certain product trials at UCSF. The system would make it very easy for every person who touches the product to provide input on its usage. At the end of the internal trial period, the data is already correlated and easy to present to the committee.
What practices have been working well to evaluate and purchase physician preference items?
John Gillean, CHRISTUS Health: In orthopedics, we’ve engaged physicians in a broad GPO process to come up with single device supply arrangements. We’ve been in that process for number of years. We’re now looking at items such stents and cardio devices. We’re taking a hard look at utilization; our physicians know over time that there will be fewer contracts.
Pierre Theodore, M.D., UCSF Medical Center: I do think that having a well-designed new products committee gives us a forum for discussion so that someone doesn’t just show up to a hospital without a vetting system. It helps with planning. It’s important to develop a culture where people say that in the name of standardization, they are willing to change their practices and be flexible in their demands to become consistent, adhere to a standard and gain consistent, quality outcomes.
How are you improving collaboration with suppliers?
Sandy Wise, CHRISTUS Health: Ed Hardin (System Vice President of Supply Chain Management at CHRISTUS) began a Partner Advisory Committee that meets quarterly. This gives our suppliers the opportunity to learn about CHRISTUS and how we work with them. We’ve interviewed suppliers that could potentially collaborate to serve our network. He’s also formed a multi-disciplinary strategic advisory committee of physicians, CMOs and supply chain leaders that meet quarterly to review goals, actions and opportunities in our supply chain.
Pierre Theodore, M.D., UCSF Medical Center: It’s very helpful to have the supplier’s specific input on what their product’s value proposition really is based on their knowledge of the hospital’s goals. This input can help clinicians on the evaluation committee — who enter meetings with generalized data about the product from the hospital — make a fully-informed and well rounded decision.
Watch as Gene shares how a pivotal discussion about one of the biggest dysfunctions in healthcare led him to become an expert in his field and ultimately resulted in his writing Strategic Management of the Healthcare Supply Chain with co-author and former ASU Professor of Supply Chain Management, Larry R. Smeltzer.
Five years ago Covidien began working with the general surgeon of a respected major medical center and teaching hospital’s multi-campus system to convert it to its full suite of hernia repair products. The objectives: introduce new products and innovative methods that could speed patient healing and reduce pain, streamline the purchasing process, de-complicate the OR and save money by standardizing the hernia product line.
When the Covidien team began working with the hospital system, its hernia purchases included 163 product codes from five vendors. The system’s owned or affiliated satellite facilities had no set protocols for buying hernia products. The hospital system’s goals were to standardize and rationalize SKUs used for the same procedure, reduce the number of vendors for a specific category and streamline and gain efficiencies to reduce costs and improve their bottom line.
The Covidien team made effective patient outcomes and cost-saving standardization the cornerstones of its outreach across the hospital system’s facilities. They understood that general surgeons who do inguinal, ventral or umbilical hernia repair have one overriding concern, and goal: Eliminate the patient’s need to return for any follow-on hernia procedures. They also understood the hospital’s mandate as a leading accountable care organization (ACO) to reduce costs while upholding its commitment to medical innovation and quality.
The team began by proposing the hospital system take a comprehensive look at their entire hernia repair program. Many surgeons volunteered to be part of the process. The re-assessment would include a review of the hospital’s current hernia product vendors and others qualified as sole source suppliers.
After narrowing down the number of vendors that could satisfy the requirements for synthetics and biologics, the hospital’s supply chain managers blinded the vendors’ names to conduct an objective evaluation of product attributes, pricing and savings. The hospital compared each product line on many levels. Could the product portfolio meet the hernia repair needs of surgeons at all facilities? What clinical outcomes would support a shift? What level of on-site support would the new product’s specialists deliver?
The Covidien team provided continuous information, support and feedback to key opinion leaders within the hospital, including its mesh committee chairman and members. At the hospital’s satellite locations, they met regularly with nurse managers and OR directors to project how the mesh conversion would positively affect lower-volume, lower turnover stocking requirements at those facilities.
During pre-clinical reviews and surgical education programs, they presented data that supported adoption of new procedures that, in combination with Covidien’s innovative mesh, suture and energy products have minimized hernia recurrences and reduced post-operative pain.
Drawing from on-site observations of over a hundred cases, the Covidien team was able to demonstrate how its hernia portfolio supports each surgeon’s procedural preferences in both open and laparoscopic techniques. As an example, for open ventral procedures, Covidien proposed using its Permacol™ surgical implant flat sheet mesh to reinforce the suture line and prevent recurrence of the hernia.
Supported by Covidien specialists, the hospital’s mesh committee reviewed each supplier’s product sizes and applications and quantified the economic value of moving to fewer product codes.
Throughout the process, Covidien’s team demonstrated their commitment to each surgeon’s practice while helping them evaluate new technologies and procedures. The team began its participation in product review meetings with “how are we doing?” sessions with the hospital’s supply chain managers. They proved their commitment to service by providing fast delivery of mesh products for new cases.
The hospital’s supply chain reviewed the proposals from numerous suppliers and presented to the sourcing committee. They voted on which supplier would provide a standardized line of hernia repair products, provide value and the best patient outcomes. After final review, the decision was made to award Covidien a sole source agreement for 90% of the hospital systems hernia product line.
By including Covidien’s Permacol™ mesh for abdominal wall reconstruction in the standardized portfolio, the hospital was able to consolidate product codes from 163 to 49. The consolidation represents close to $1 million in savings across surgical implant and synthetic mesh products.
“In the 13 years I’ve been working in this region, I have witnessed this hospital system’s amazing growth. As a leading research and teaching facility, the hospital partners with innovative companies that offer new products and procedures, said Covidien’s senior hernia specialist. “The hospital’s “Patient First” focus requires a collaborative effort from all employees to offer the best care, while maintaining a close watch on the expenses that burden the facility’s bottom line. We’re honored to support this important customer’s conversion efforts and are dedicated to providing their mesh team with the highest caliber of service.”
Watch the video series below to find out.
Here's how these ASU-educated hospital supply chain professionals describe the significant contributions they've already made and what they've learned along the way:
The University of Chicago Medicine (UCM), an academic medical center based in Hyde Park on the campus of the University of Chicago, offers the full range of specialty and primary care services for adults and children. It includes the Center for Care and Discovery, Comer Children’s Hospital, Bernard A. Mitchell Hospital for adult inpatient care, Chicago Lying-in Hospital, and the Duchossois Center for Advanced Medicine. UCM also has outpatient locations throughout the Chicago area. University of Chicago Medicine physicians are members of the University of Chicago Physicians Group, which includes more than 700 physicians and covers the full array of medical and surgical specialties. Its physicians are faculty members of the Pritzker School of Medicine.
As part of its ongoing efforts to reduce supply costs, UCM began an initiative to evaluate the wide variety of surgical mesh products used throughout its hospital system. The objectives were twofold: First, increase acceptance of a product line that would best represent the performance attributes valued by surgeons across the UCM system. Second, aggregate UCM’s mesh spend and consolidate SKU’s by sourcing the bulk of mesh purchases with one cost efficient product line that would demonstrate consistently excellent patient outcomes.
To justify a goal of moving to a standardized suite of hernia mesh products, the hospital system began an internal evaluation and comparison on surgeons’ usage of synthetic mesh for laparoscopic and open inguinal, ventral and incisional hernia repairs.
Case data revealed that the highest volume of synthetic mesh usage was coming from general surgeons performing hernia procedures. After evaluating the features and benefits of various alternatives, UCM selected Covidien’s synthetic mesh products for an internal clinical trial.
Over a six month period, surgeons used Covidien’s synthetic mesh in a variety of abdominal hernia procedures and provided feedback on clinical observations, ease of product use, performance and patient outcomes. The hospital worked closely with the company representative to document cases in which Covidien’s Parietex ProGrip™ synthetic mesh was utilized in open, incisional hernia procedures.
As a result of collaborative discussion with Covidien representatives during the trial period, many surgeons switched from open to laparoscopic inguinal hernia repairs using Covidien’s Parietex ProGrip™ laparoscopic mesh. This reduced procedure time by fifteen minutes and often eliminated the need for the fixation devices required with other mesh products. In addition, patients seemed to have far less post- operative pain upon initial follow up in the clinic.
Constant contact with Covidien Hernia Representative Lindsay Muller, excellent feedback from surgeons during the clinical trial and documented cost savings reinforced UCM’s goal to standardize 80 percent of its synthetic mesh supply with Covidien.
Based on the clinical trial and a detailed evaluation by the hospital system’s product validation committee, UCM hernia initiatives have saved more than $37,000 on its synthetic mesh purchases since January 2013. Additionally, Covidien’s ProGrip™ laparoscopic self-fixating mesh, which can eliminate the need for tacking devices, is projected to save the hospital over $35,000 per year based on data captured during the trial period.
“UCM has a rigorous and thorough product evaluation process,” said Bryan Coyne, Hernia Regional Manager. “Doctors who want to bring a product into the system for trial use must justify their proposal with a complete analysis to the hospital system’s Operative Product Evaluation (OPEC) committee (a cross functional team of surgeons and administrators that reviews and approves new product requests and discusses trial feedback to ensure that policies and procedures are followed.) The physician must outline the proposed product’s cost, features and clinical benefits. During UCM’s trial of our synthetic mesh, it was the Covidien team’s job to know how surgeons were previously using other mesh brands and work with them as they utilized our synthetic mesh in both open and laparoscopic procedures, track experiences and document outcomes. Based on the data we collected, we met with UCM’s supply chain management team and projected a year’s mesh usage for the hospital’s business review.
UCM is a very progressive system, and we uncovered their potential desire to standardize on synthetic mesh during one of our quarterly business reviews,” said Kelly Burns-Mack, Director Strategic Accounts, Covidien Surgical Solutions. “While UCM is committed to Covidien’s endomechanical, suture and energy products, it was our ability to coordinate the work of all our business units at UCM that allowed the mesh opportunity to be discovered. By providing UCM one efficient point of contact for these products, we’ve moved our relationship with the hospital from vendor to committed partner across the four lines.”
“The University of Chicago Medicine is at forefront of hernia repair technology, so we demand the best products available,” said Ian O’Malley, MSSCM, UCM Sourcing Category Leader, Supply Chain. “Having Covidien as a strategic partner benefits UCM on various levels. Their hernia products are meeting and exceeding our requirements. Their introduction of a Laparoscopic Progrip™ product allowed us to first and foremost increase our level of patient care while reducing OR time and material costs. Covidien’s contracting structure enabled us to quickly get products into surgeons’ hands. They are actively putting our institution at the forefront of mesh technology. It’s a winning situation on all levels.”
What will the FDA's pending Unique Device Identification (UDI) standards mean for your hospital? Your Patients?
Unique Device Identification (UDI) holds the key to unlocking supply chain efficiencies and improving patient safety and outcomes. View the infographic.
Learn more by watching the videos below:
Through methods rooted in the company’s supplier and business codes of conduct, where integrity, honesty, safety, and quality are essential factors, Covidien Vice President of Global Sourcing, David Wohler, and his team develop and sustain mutually productive relationships with the company’s strategic suppliers.
Watch as David shares the critical factors he considers to be key in extracting value from Covidien’s supplier relationships.
Attendees of AHRMM's recent 51st conference and exhibition weigh in: click here to watch the video.
Transitioning to a value-based business model requires tearing down the silos within the healthcare organization and using data-supported decision-making to drive change.
Watch this panel discussion we presented in partnership with Modern Healthcare and learn how to:
Don't have time to watch the full one hour feature? Check out the video snippets >>>
Original Air Date: October 11, 2013
Driving change at a system level to implement new processes requires buy-in and support of all stakeholders. We know getting this alignment is not easy.
During the videocast “Leverage the Power of Your Supply Chain to Improve Your Bottom Line,” leaders from Lifespan, Tenet and Fletcher Allen Healthcare discussed four key steps they’re using to successfully secure this alignment and drive the changes necessary to reduce costs, ensure quality care, and improve patient outcomes at their healthcare systems.
#1: Offer transparency with integrity by tearing down silos and aligning goals.
How it’s done: Create structures for the new ways of working.
What your hospital can gain: Cost-effective purchases through broad involvement in product selection.
“Implementing supply chain at a system level and not just an individual affiliate level gives us the ability to select the best products at the best cost” – Nicholas Dominick, Jr., Senior Vice President, Diagnostic and Support Services, Lifespan, Providence, RI
“Our co-management agreements require management to work side by side with physicians across different practice areas to make decisions on products. Doctors are compensated for the hours they spend taking on certain projects. The resulting esprit de corps is better than I’ve ever seen” – Erik Wexler, CEO, Northeast Region, Tenet Healthcare Corporation
#2: Use the right data and build consensus to reduce process and procedural variability.
How it’s done: Define the end game in terms of patient outcomes and people will rally around the cause.
What your hospital can gain: Clinical leaders’ ownership of new procedures and techniques speeds change and boosts quality.
“Our clinicians are scientists: once they see compelling data on our issues, they dig in and help us find solutions.” – Charlie Miceli, CPM, Vice President, Supply Chain, Fletcher Allen Health Care, Burlington, VT
“As we evaluated our vascular surgeons’ performance, we looked at costs in the aggregate. Then we individually shared with each surgeon how they compared within the group. As a result, everyone began to actively seek ways to reduce costs in the OR.”– Erik Wexler
“Being able to understand data within the same source supports benchmarking. Two doctors in our joint center openly shared their performance data on a peer-to-peer level. It’s opened up new conversations on efficiency within that department.” – Nicholas Dominick, Jr.
#3: Create and nurture the ‘rock stars’ by elevating subject matter experts who champion new processes.
How it’s done:Reward those who leverage their knowledge to create system-wide improvements.
What your hospital can gain: Cost reduction and quality targets happen on schedule.
“Our subject management experts in supply chain and perioperative services help us do the right thing for our patients. As a result of contributions from both our clinical and operational leaders, any reductions in our spend will be shared 50 percent across departments for the first year.” – Charlie Miceli, CPM
“A physician champion-surgeon who understood the value of new trocar-suture products being introduced served as a key communicator who ‘cascaded’ knowledge to other members of that department.” – Erik Wexler
#4: Stop viewing supply chain as a sales transaction by making the table bigger.
How it’s done: Help everyone understand and act upon their roles in improving supply chain operations.
What your hospital can gain: Universal buy-in on new product introductions.
“The conversations have to be different. Shift the traditional focus of alignment on sales through physicians to sales with physicians and hospital administration.” – Erik Wexler
“Moving from a transactional mindset to a strategic mindset requires people with IT skills, communication skills across the organization, strategic skills and logistics skills. They also must be interpreters who explain what has to happen between the introduction of products and their use.” – Nicholas Dominick, Jr.
How has management of the healthcare supply chain evolved in 2013?
What’s in store for 2014?
As healthcare leaders look to their supply chains to reduce costs, improve quality and achieve positive outcomes for patients, they will need to become problem-solvers, engaging with integrated delivery systems in longer-term, more carefully selected relationships, according to Omnicell and C-Suite Resources’ report “Next-Decade Predictions for the U.S. Healthcare Market”. Risk-sharing, greater transparency and joint commitment to managing broader groups of activities and materials will characterize these relationships.
Over the past year, we’ve learned from supply chain best practices at top hospitals around the country. Based on our conversations with clinicians, supply chain leaders, educators and other experts, here are five key concepts that hospitals can employ in 2014.
1. Increase transparency by drawing upon clinical evidence and experience.
A recent study by The Advisory Board Company advises that to ensure data transparency, hospitals must “extract value through the post-contract period by leveraging physician supply utilization data with suppliers to demonstrate contract commitment.”
Pierre Theodore, M.D. UCSF Medical Center and Dr. John Gillean, Executive Vice President and Chief Clinical Officer, CHRISTUS Health, engage a wide range of clinicians who determine the attributes they prefer in devices and leverage their hospital systems’ purchasing power to obtain products that meet requirements that all stakeholders agree upon. How? They’re evaluating each product they use from both clinical and utilization perspectives. Based on this collaboration, they’re negotiating regional and system-wide agreements with suppliers whose products have been proven to deliver on the hospital’s quality, efficiency and outcome standards.
2. Invest in technology to standardize device identification and tracking.
The Food and Drug Administration (FDA) has released a final rule requiring that most medical devices distributed in the United States carry a unique device identifier, or UDI. Standardizing how devices are labeled and tracked across health systems offers a huge opportunity to unlock supply chain efficiencies and improve patient safety.
Our UDI experts — Corwin Hee, Director, Information Systems Global Shared Services, and David Brooks, Senior Project Manager, Corporate Engineering, Technology Solutions — talk about how the pending UDI system will work, how it will benefit the supply chain, and what hospital management must know to help them implement UDI correctly.
3. Improve internal processes from the top down. And the bottom up.
The speed of innovation in a hospital’s supply chain depends on the involvement of clinical stakeholders, regular analysis and honest, timely communication with all employees. Based on their experiences at Tenet Healthcare, Fletcher Allen Health Care, and Lifespan Corporation, Erik Wexler, Charlie Miceli and Nicholas P. Dominick, Jr. provide tips for healthcare systems looking to improve in this area.
4. Learn from data to improve outcomes.
But first, determine what you want to measure, how, and why. Joe Walsh, AVP of Procurement at Intermountain Healthcare, works with his team to define his supply chain through 17 specific Key Performance Indicators under the categories of clinical excellence, service excellence, employee engagement, physician engagement, operational excellence and community stewardship.
As they adapt how they operate, it’s important that hospitals borrow from other industries’ best practices, says Lifespan SVP Nicholas Dominick and Tenet Healthcare Corporation Northeast Region CEO Erik Wexler, by measuring processes before and after changes have been made.
5. Hire orchestrators and team-builders.
Supply chain blogger Andy Kaye recently discussed the top three barriers facing the next generation of supply chain professionals: The image gap, education and entry points, and the definition of job functions.
Arizona State University Professor Eugene Schneller, Ph.D., author of Strategic Management of the Health Care Supply Chain is doing something about the education gap through the school’s supply chain management program. He believes that the best thing that hospitals can do in recruiting supply chain talent is to understand the key characteristics and skills necessary to create a great supply chain team.
How will your hospital’s supply chain management strategy evolve in 2014? What are your biggest challenges and opportunities? Leave a comment below.
Watch these brief snippets from our one-hour videocast produced in partnership with Modern Healthcare in which three leading healthcare executives share their tips and strategies for reducing costs and improving outcomes at their healthcare systems:
Original Air Date: October 11, 2013
It's no secret that supply chain managers and clinicians don't always see eye to eye. Both sides of the aisle feel the other has competing goals and objectives, which can make for tenuous working relationships and unproductive environments.
But improving the relationship between supply chain and clinical isn't as simple as telling stakeholders to play nicely in the sandbox. To make sure these departments truly work well together to produce the best possible decision outcomes – which are more important than ever – hospitals need to address the root of the conflicts.
These 3 strategies can help:
1. Set common goals, and focus on them. While cost has historically been pitted against quality of care, value-based care is combining the two into one goal. That should go a long way toward helping clinicians and supply chain managers find and set common goals, which is extremely important to positive collaboration. While some expectations and responsibilities will still differ for the two groups, focusing on the common goals should improve outcomes.
2. Use fact-based decision-making. Require all parties that provide input on purchasing decisions to present hard data that supports their recommendations. For example, while a certain product may not save money in the short term, does it drive down total care costs through better performance? Using such data to drive discussions helps remove emotion and internal politics, allowing for more productive conversations. (Read our post on data-driven decision-making.)
3. Involve more departments. Greater supply chain efficiency can be achieved in other ways besides altering physician preference. Invite other departments to the table to find leaks and inefficiencies so that it's a system-wide effort to contain costs and improve care. Committees and incentives work well to gather the right intel.
What collaboration strategies have worked in your organization? Please share in the comments field below!
Big Data is the big buzzword that's supposed to transform business. Marketers need it to reach people, sports GMs need it to evaluate players – and hospital supply chains need it to sustain under the accountable care model.
The problem is, most technology vendors in healthcare haven't caught up to the fact that data housed in a hospital needs to be more universal in order to be useful; in order to be "Big Data." Its current disconnected state is preventing (and frustrating) hospital supply chains from leveraging real-time, accurate and complete information to make smart purchasing and other operational decisions to meet new measurement standards.
One key opportunity with Big Data is linking products to outcomes. In other words, data that provides metrics on key issues such as clinical outcomes and total costs, based on supply chain decisions.
Orlando Health is one example of a health organization that is working to link products to outcomes, as highlighted in this recent Healthcare Financial Management Association report. The organization uses a tool that allows product information to be shared between revenue and materials management, which means users can compare charge and cost data, helping them with a range of decisions, from accurately changing health delivery prices to ensuring charges are in line with what patients were provided.
Big Data will be instrumental in healthcare supply chains moving forward, as systems are asked to improve efficiency and margins year after year. While hospitals often look to their supply chain for quick cost savings, Big Data can offer a more lasting strategy toward improvement requirements which deeply affect supply chain decisions.
Of course, the million-dollar question is, when will we get there? Or better yet, how will we get there? This blueprint from McKinsey & Company and the Health Industry Distributors Association is a start. We're also curious to know your thoughts on when and how we'll arrive at true data-driven decision-making.
Utilizing supply chain as a mechanism to integrate new non-acute care sites into a mainstream organizational culture can be an excellent introductory strategy. ACO formation and the national trend of hospital networks purchasing physician practices have created the need for integrating these previously independent care sites into the larger care and support network. These changes are also prompting traditional hospital supply chain programs to expand beyond the hospital campuses into non-acute care sites such as long term care, continuing care communities, rehabilitation centers, nursing homes, ambulatory surgery centers, home care, and physician’s offices. A team from the Strategic Marketplace Initiative (SMI), a healthcare supply chain executive coalition, has examined this market shift and has created a manual to assist industry professionals responsible for managing this change.
When embarking on an expanded supply program, it is important to recognize that the supply and service needs of the non-acute care sites differ greatly from acute care sites, as shown in the chart below. Many non-acute care sites - having historically operated independently – maintain long standing supplier relationships, consume fewer supplies, have facility challenges, require customized delivery programs, and have very informal supply management programs.
An organization’s decision to in-source or out-source their non-acute supply chain program to a distributor can depend on a number of key factors, including supply chain strategy, logistics, capacity issues, capital requirements, and existing supplier partnerships. Physician practices, which comprise the majority of non-acute sites, have traditionally been served by distributors rather than purchasing supplies direct from multiple manufacturers. Some distributors focus specifically on this market, while others have dedicated divisions. Often a distributor’s representative is a regular visitor to non-acute sites and functions as an outsourced inventory manager. Supply chain programs for home health programs are more challenging, often requiring integration of supply chain with direct care givers since most home care supply chain functions are often performed by home care nurses. While direct supply costs are relatively low in home care, related distribution costs can be high due to geographically distributed patients.
The services to be provided to non-acute customers depend on many factors, including technology platforms and resources available. The provision of procurement and contracting services is a common first choice, as savings on both product costs and service contracts is generally a welcomed benefit. These services are greatly enabled by electronic requisitioning capabilities, so technology becomes a critical success factor. Properly welcoming these nonacute customers to a formal supply chain program is a critical first step in the program’s longterm success. When adding new customer sites, it is critical to first understand the customer’s needs while insuring that the electronic connection for on-line requisitioning and communication be established. Education on proper cost accounting for supplies costs is also an important factor, as previously independent care sites often have very different accounting systems.
Any new supply program will need to measure its performance. While many organizations report that non-acute supply expense can be under 10% of the total supply chain spend, it typically can takes 20% of supply chain resources to service. The most common management metrics are fill rates, customer satisfaction, annual savings, and on-time deliveries.
The product needs of acute and non-acute care customers can vary greatly, with the most advanced technologically-driven products still used at the hospital setting. To minimize disruption, successful product standardization efforts can first focus on standardizing products among similar non-acute sites. Non-acute supply chain programs can often present the opportunity for supply chain professionals from both provider and supplier organizations to educate and train physicians about supply chain and its value to the non-acute provider.
Invitations to engage with supply chain can be a central theme when conducting on-boarding programs or when conducting initial assessments of new customer needs.
Providing supply chain services to care sites external to the hospital campus can be an excellent mechanism for integration when done correctly. Supply chain is well positioned to serve as the “connector” to a mainstream organizational culture, paving the way for the increased clinical integration that will be needed to address the population health and care quality requirements in the years ahead.
The Strategic Marketplace Initiative (SMI) is a non-profit, member-driven organization dedicated to improving the healthcare supply chain through direct information exchange and collaboration between senior healthcare supply chain executives and senior IDN supply chain executives. SMI members include healthcare providers, medical manufacturers, medical distributors, and other healthcare supply chain businesses. Created to influence, shape and advance the future of the healthcare marketplace, SMI provides an open forum for innovative idea-exchange and the development of collaborative process improvement initiatives. Visit www.smisupplychain.com
Wholistic and strategic.
These are the two top traits of successful supply chain executives right now in healthcare, according to the insightful keynote at last month's World Congress on Health Care Supply Chain in Las Vegas. Raymond Siegfried, senior vice president of Christiana Care Health System in Delaware, delivered the address.
1. Wholistic and strategic supply chains will help change healthcare delivery.
Health reform is indeed about lowering costs while improving care, but hospitals can too often rely on the supply chain for just the cost-cutting, and on other groups for improving care. This is a mistake. Supply chain executives that take the lead on a more wholistic and strategic approach will stand out. By working with management and clinical teams to focus on achieving the best patient outcomes through supply chain decisions, organizations can move more swiftly toward the goals of value-based care, whether those decisions include cost-cutting or not.
2. Wholistic and strategic executives will turn supply chains into supply systems.
A supply chain becomes a supply system when everything in the supply chain is designed and managed for the full operation it serves. Does every part of your supply chain work together toward a common goal? (That goal being patient health.) Consider the case study of Zara Clothing, chronicled here in this BusinessWeek piece. Their novel approach to supply chain emphasizes the importance of designing a wholistic system, and one where low-cost isn't always the main driver of optimal outcomes.
3. Successful executives will build strategic relationships with manufacturers and distributors.
Since the FDA has no cost control in their formula for approval, the burden of cost-consciousness falls to the supply chain. Executives that break down the walls between hospitals, manufacturers and distributors to work together toward creating cost-conscious supplies that produce good health outcomes will emerge as winners in the new system.
How do these approaches sit with you? Do you plan on being more wholistic and strategic in the near future?
If you are struggling with your VAC success or interested in learning how other Value Analysis Committees interact and collaborate with surgeons, then you should find this white paper helpful.
Download this document to learn more about the surgeon, how they view and interact with their respective VAC, and the perceptions and experiences they have that influence the success or failure of a hospital VAC.
Do you agree that the surgeon can be the “make-or-break” factor in achieving VAC success? How are you managing VAC at your organization? Share your comments below.
Learn from those who are doing it well. Click here to get a snapshot of today’s successful cost management activities in the value analysis environment among supply chain managers, clinicians and other important Value Analysis Committee (VAC) members.
The rising cost and variable quality of healthcare delivery in the U.S. has become the subject of great debate among policymakers, providers, payors, and patients. Efforts among some healthcare organizations have shown that there are effective methods to achieve cost savings in the supply chain process, while protecting or improving quality of care for patients. Healthcare reform has motivated many in the healthcare community to evaluate every method possible to prepare for the certainty of further government oversight and reduced reimbursement payments. Hospitals are on the front line of what is shaping up to be a long and difficult process to implement new methods to control costs and change decade old behaviors among healthcare providers.
"The Science Behind VAC Product Adoption" is the third installment of a series of publications, resulting from data and interviews conducted by Blueprint, a healthcare research and practice solutions organization, that provide key insights into the effective formation and processes related to the operation of Value Analysis Committees. The previous two papers, "Surgeons and the Value Analysis Committee: Agents of Change" and "Is Your Value Analysis Committee a Leader in Change?" focused on the formation of the VAC and the evolving relationships between surgeons and supply chain management. This edition will provide you with key insights and trends related to new product adoption decision-making processes and the details behind how products are evaluated.
What strategies are you implementing to optimize your VAC and help reduce overall costs? Share your comments below.
Download this free white paper and get key insights and leading practices shared by other organizations who have evolved their VAC into an integrated entity that optimizes organizational investments in material and equipment while improving the overall care of their patients.
Part of a series of three publications which resulted from data and interviews conducted by Blueprint, a healthcare research and practice solutions organization, "Is Your Value Analysis Committee a Leader in Change?" provides key insights into the effective formation and processes related to the operation of Value Analysis Committees. You may wish to review the other two publications: "Surgeons and the Value Analysis Committee: Agents of Change" and "The Science Behind VAC Product Adoption".
We hope that the best practices noted in this document provide a catalyst for change, as well as inspire you to achieve and take your organization to the next level.
Are you currently evaluating your VAC? What improvements do you think would be most impactful in meeting your objectives?
What wisdom can be learned from others who have already gone through what you are experiencing as a healthcare provider?
This was the focus of the World Congress Health Care Supply Chain summit in Las Vegas in January where Covidien joined industry thought leaders as they shared their nuggets of wisdom and tried-and-true strategies for creating successful outcomes for your patients and your healthcare system.
Over the coming weeks, we will go in depth on the following topics that were discussed, and more importantly, the solutions that were shared to help you not only achieve your day to day tasks and face your daily challenges but also strengthen your skills as today’s healthcare supply chain executive.
Which topic is at the top of your priority list? Were you at World Congress? If so, share your experiences with us in the comments below … what did you find interesting/innovative?
Supplies are a big part of healthcare costs. They are usually a hospital's second largest expense after labor costs, and physician preference items (PPIs) -- specific medical devices or supplies that are "preferred" by a hospital's doctors and surgeons -- can ratchet up that line item very quickly.
PPIs are arguably a supply-chain manager's biggest challenge when it comes to staying within budget. But as cost containment and better outcomes must both be met under accountable care, business as usual will be changing for everyone.
This is a unique window of opportunity for supply chain managers to develop new strategies and work with physicians to establish new processes surrounding supply costs. Successful leaders in supply chain management agree that engagement and partnership with physicians are key. Here are 3 ways to do that.
1. Leverage the move toward value-based, accountable care. Supply chains once targeted PPIs as part of cost-cutting initiatives (hence physicians' angst), but now supply strategy should shift according to the goals of accountable care. Hospitals see these goals (cost reductions and improved outcomes) as part of everyone's job, not just one department, so the opportunity for partnership has never been riper.
At a conference we recently attended, it learned Intermountain Healthcare has eliminated the term PPI because supply decision-making has become a group decision based on various factors, such as outcomes and cost. Now, there is no need for a term that describes a specific group’s “preference.” This is an interesting win-win approach for both supply chain and clinicians, and one we expect to hear more about.
2. Talk reimbursement. Physicians know reimbursement rates are declining, so their willingness to take an active role in improved profit margins has increased. Take advantage of this as PPIs come up in discussion. Be sure to have up-to-date reimbursement information available to know whether or not the PPI’s have additional opportunity for payment based upon coding procedures. Engage the Medical Records team to identify trends in coding or reimbursements that may have an impact on the procedural areas you are evaluating. Be willing to receive inputs from the physicians should there be concerns with how procedures are coded and tracked. Sometimes a focused audit is necessary to answer some of the concerns that may arise. Often the suppliers of PPIs can provide assistance through their reimbursement teams.
3. Speak physicians' language. Avoid supply chain jargon when you're talking with physicians. Terms like "dual source prime contract" will NOT engage them. And speak within their realm of concerns -- perceived patient interest, comfort level with the product, patient outcomes and safety, etc. -- not how difficult it is to get, the price and other supply chain concerns.
For more ideas, here's a related post I wrote last month: "Getting Along: 3 Collaboration Strategies for Supply Chain & Clinical".
How are you handling PPIs at your hospital? What do you think of Intermountain Healthcare’s decision to do away with it all together? Leave your thoughts in the comments below.
If there’s one thing all healthcare providers can relate to right now, it’s the challenge of providing improved clinical outcomes while reducing healthcare spending.
Did you know that Minimally Invasive Surgery (MIS) can offer patients a shorter length of hospital stay, reduced chance of infection, and faster recovery? It can also result in significantly less spending for the patient’s hospital stay.
Featured in the March 2013 issue of Managed Care Magazine, a recent MIS study shows that hysterectomy, colectomy, and thoracic resections performed via MIS, in patients with similar preoperative characteristics, would result in fewer complex Diagnosis Related Group (cDRG) assignments and a subsequent decrease in healthcare spending. The study conservatively estimates a potential savings of $24.4 million for these three procedures alone, based on only Medicare reimbursement rates for non- complex, and moderately complex DRG’s.
Open surgery, when compared with MIS, increases the odds of complex DRG assignment by 67%.
Would you like more reimbursement information? Check out our online reimbursement guides.
What do you think of this study? Is this information helpful to you? Share your comments below.
When was the last time you evaluated your relationship skills? It's about time for a check-up.
That's because relationship management is becoming more important than ever for supply chain managers to be successful. You're tasked with running a leaner and vastly more effective supply chain operation, but your ability to meet these goals will likely depend on how well you've built and managed relationships with three distinct and separate groups: the C suite, clinicians and suppliers.
When it comes to developing good relationships in these groups, one approach does not fit all. Here are some useful tips Covidien learned at a recent healthcare conference that can help you tailor your approach:
1. Get to know your clinician counterparts as people. Grab a coffee, attend their staff events, and ask questions to find common personal and professional interests. Get to know them first before asking them to do something they aren't comfortable doing.
2. Get into the weeds. Leave your office and walk around -- shadow, visit and interact. Be visible and know what's going on in the organization. You'll build their trust.
3.Stop asking things like, "Is it chargeable?" Using supply chain and revenue-focused words can be turn-offs. Clinicians need to worry about the patient on the table, so make their job easier by speaking their language, not yours.
1. Be focused. Any value proposition needs to have a clear line of sight to the best interest of the organization.
2. Think long-term. The C suite's job is to steer the organization into the future -- do not approach them with short-term solutions. Understand the strategic direction of the organization and your role in supporting it. Don't waste their time.
3. Manage independently. Even within the C-suite you'll need to target your approach. CFOs are data-driven. Give them the bottom line and keep them in the loop on money management. COOs want to know about streamlining and efficiencies, and tend to think collectively and system-wide. Try to get on their weekly meeting agenda. And CMOs want crisp data to prove ROI.
1. Meet as a group. Invite clinicians to meet face-to-face with vendors. This can build a more direct connection between the people who are helping you affect patient outcomes, and those who are responsible for them.
2. Heed the 5 Dimensions of Supplier Relationships. Gallup created a wonderful matrix on the five factors that matter most in supplier relationships: clarity, simplicity, integrity, reciprocity and connectivity. Do your part in ensuring your supplier relationships live and breathe these principles.
Just like many health systems with increased financial pressures resulting from sequestration, reimbursement cuts and healthcare reform, you may be looking for new and creative ways to lower supply costs.
When Fairview Health Services in Minneapolis, MN began dealing with new care delivery and payment models, the system’s supply chain leaders searched for partners willing to go at-risk with them to reduce costs.
The result? A projected savings of $100,000 - $200,000 annually.
Learn how they did it. Click here to read their story*>>
*as featured in Spring 2014 Economic Outlook from Premier, Inc.
Healthcare group purchasing organizations (GPOs) are just one piece of the broader healthcare supply chain, but are playing an increasingly significant role, with about 98 percent of hospitals in the U.S. voluntarily contracting with at least one GPO, according to the U.S. Government Accountability Office (GAO).
The healthcare industry as a whole – and, certainly, the healthcare supply chain – is complex, with many moving parts. By aggressively working to promote openness, accountability, and the highest ethical standards in business practices, GPOs are able to increase transparency for the industry, which in turn improves the overall purchasing process for all entities, including suppliers – who are able to realize significant market opportunities through GPOs that would otherwise be unattainable.
Just as GPOs help providers find value by offering them economies of scale, they can also provide suppliers with a broader visibility for introducing products to hospitals and other providers. On a basic level, GPOs offer suppliers access to thousands of hospitals across the country, which in turn can then help these companies grow market share, create jobs and strengthen infrastructure and capacity.
In addition, GPOs improve overall supply chain efficiency and effectiveness through benchmarking, e-commerce solutions, enhanced data accuracy, performance metrics, and product quality measurement. GPOs also offer reliability in overall service and convenience so that suppliers can devote more resources to such efforts as research and development, while also maximizing the value of their products already in the marketplace.
Hospitals are operating on razor-thin budgets, and all parties to the healthcare delivery system continue to search for solutions to rising healthcare costs. GPOs are already bending the healthcare cost curve, increasing competition, and reducing costs for both providers and taxpayers. GPOs are fully committed to providing value to the supply chain, as well as helping to increase efficiency within the supply chain and increase patient access to the highest quality of care.
Curtis Rooney is President of the Healthcare Supply Chain Association.
I recently wrote about the concept of "value" -- how it is being defined, and why a definition is so important to the healthcare supply chain. We will all be talking about the definition of value for some time, as everyone in healthcare navigates the new era of accountable care.
A couple interesting angles have recently come up that may move the needle in this discussion. One is about a possible missing link in the quality equation, and the other is the supply chain's role in determining the definition.
The quality equation has often been defined as Quality = Outcomes/Costs, but that leaves out an extremely important factor, some are saying: service. Under the Affordable Care Act, outcomes and costs are major factors for reimbursement, but 30 percent of reimbursement will be tied to patient satisfaction scores. Hence, a new definition of quality is being discussed: Quality = Outcomes x Services / Costs. Service, of course, representing the patient's experience of care.
In this equation, a provider can better control the result of its "quality." Patients that unfortunately don't get their desired outcome will still be evaluated for the quality of care they received. This is a definition more on par with how other industries operate: Sometimes the car repair shop brings bad news and the outcome is grim, but did the shop do everything it could to help you through the process and ensure you and your car received proper care?
That's just one example, but factoring in service certainly makes sense when defining quality and value in healthcare.
The other interesting angle is supply chain's role in establishing the definition of value. At HIMSS '14, a group of leaders told the Supply Chain pre-conference symposium that supply chain shouldn't just be a part of defining value, it should own the definition. That supply chain should take the lead and own the CQO process all the way through the healthcare hierarchy.
Should supply chain be in charge of defining value? Is there a better organization within a provider system that can measure cost, quality and outcomes the way that supply chain can? How do you define quality? Share your thoughts below.
The healthcare economics and reimbursement landscape is changing rapidly, largely due to unsustainable growth in healthcare spending. Are you ready?
Join us for an in-depth discussion on the new “Pay for Performance” reimbursement models that Medicare has developed, which are aimed at rewarding providers for improving quality of care and outcomes - and penalizing those that do not. These models provide incentives to healthcare systems for improving the overall health of a population rather than increasing the volume of care (i.e. number of procedures) delivered.
View our 11 minute on-demand presentation on “Pay for Performance” reimbursement models given by Mike Morseon, Director of Healthcare Economics, Policy and Reimbursement for Covidien.
Click here to view the webinar.
Are you a new manager/leader, or responsible for coaching new managers? Watch Bruce Tulgan, a well-known expert on leadership and management and founder/chairman of RainmakerThinking, Inc., as he discusses challenges emerging leaders face and the critical skills and strategies needed to overcome them.
Videos to Watch:
Johns Hopkins researchers report the under-utilization of MIS by hospitals in the U.S., despite strong evidence regarding advantages of a MIS approach in many common procedures.
In a British Medical Journal article published online July 8th, authors cite data from the Agency for Healthcare and Research Quality (AHRQ), re-establishing the significant reductions in surgical complications associated with MIS vs. open surgery. They also reference several Cochrane reviews of randomized control studies comparing laparoscopic surgery vs. open for appendectomy, colectomy, hysterectomy and lung lobectomy surgeries, which demonstrate consistent superior patient outcomes associated with MIS.
The researchers further analyzed 2010 AHRQ data looking for commonalities among hospitals which are high adopters of MIS surgery and among those which are medium or low adopters.
What they found indicated that the percent adoption of MIS was not closely associated with factors such as hospital bed size, urban vs. rural, or teaching vs. non-teaching hospitals as might have been expected. They concluded that although MIS is associated with significantly better outcomes, the choice of surgery is often discretionary and based on surgeon preference, resulting in an element of randomness in terms of quality of care.
The authors suggest that increased standardization of surgeon training on MIS for surgical residents and fellows would be a key factor in reducing the disparity of care they observed. The article also goes on to suggest that given the strong association of MIS with improved outcomes, a hospital’s percentage of MIS utilization should be considered as a transparent quality measure to encourage adoption of demonstrated best surgical practices.
Recently, the FDA released a final rule requiring most medical devices sold within the United States carry a unique device identifier (UDI barcode), to be documented and tracked for patient safety purposes.
Each UDI contains 62 points of valuable data. How will Providers be using this information to improve patient safety and other processes? We don't really know -- because they're not required to.
That could change in the future, as the value of UDIs to health statistics were recently touted on Capitol Hill by Greg Daniel, managing director at The Brookings Institution’s Engelberg Center for Health Care Reform. Part of his testimony from June 10 which details the potential benefits that might be realized as a result:
"Some of the tangible benefits that can be realized soon by incorporating UDIs into administrative transactions include:
In the meantime, providers should strongly consider how UDIs can fit into their plans for leveraging data and analytics to improve care and cut costs.
This case study analysis of inventory costs helps providers further understand the benefits of UDIs to their organization, especially in the operating room. It explains the link between the use of Global Trade Item Number (GTIN) and inventory reduction in the OR, and shows how a savings of over 60% can be achieved on the total cost of supplies.
If your organization is already using UDI information, or plans to, please share your story in the comments field!
Hospitals are facing rapidly increasing financial pressures, and continue to seek more cost- and time-saving methods to acquire supplies. One area of increasing interest is the hospital or healthcare system’s supply chain model; in particular, whether greater efficiencies can be achieved by maximizing the share of spending through a commercial distributor, or by increasing the share of purchases directly from manufacturers.
The Hospital Procurement Study compares the activities and related internal process costs associated with purchasing directly from a manufacturer to those associated with purchases using a distributor.
Download the case study >>>
Which method have you seen greater efficiencies? (please post a comment)
Listen to a recorded webinar discussing seven things that clinicians can do in an era of healthcare payment reform.
1. Standardization – Develop or implement best practices and implement standard clinical processes of care.
2. Infection control – Develop and implement hygiene protocols. Use checklists that have shown to reduce complications and infections.
3. Improve patient experience – Focus on better pain management and improving communications with the patient.
4. Post discharge care – Leverage low cost tools like e-follow up or telephonic follow up.
5. 80/20 principle – Focus on the 20% of patients who consume 80% of resources.
6. Coordinate care with primary care physicians – Care coordination would form the basis of timely care and prevent expensive care later.
7. Innovative technologies – Focus on innovation that does not increase costs with relatively lower incremental outcome improvement.
Today’s nurse leaders play an important role in supporting the financial well being of their healthcare organizations. However, the demands of day-to-day clinical work don’t always afford them the opportunity to hone their financial skills.
As the chief nurse executive of the north region for the 14,000-employee Community Health Network in Indianapolis, Indiana, Pamela Hunt draws from her 17+ years’ experience as a nurse leader and administrator to enhance her peers’ financial management and operational planning prowess.
We recently spoke with Pam about the opportunities nurse leaders have to make a difference, both financially and operationally, within their organizations.
Tell us a little about your career path. How did your education and career opportunities influence your perspectives on financial management?
My initial nursing education was from a 3-year diploma program school of nursing. Upon graduation I began working in a critical care unit. Within a couple of years I was back in school, completing a Bachelor’s degree in Science and later a MSN in nursing administration from Indiana University.
In the early 1990s, the 130-bed community hospital I worked for was evaluating ways to become more efficient. As a result, the hospital’s nursing leadership was beginning to look differently at their roles. I was asked to take on leadership of the operating room while continuing to lead the intensive care unit. At that time, it was uncommon to take over a unit you didn’t ‘grow up’ in; nurses were traditionally given new responsibilities based on their clinical performance.
When offered the OR leadership role I said to the VP, “I’ve never worked in the OR.” She said, “I’m not asking you to work there, I’m asking to lead that team.” So I accepted the OR director position, while also continuing as director of critical care unit. My leadership in the perioperative role continued for the next 15 years until I left the organization.
In 1998, the same hospital hired a consulting firm that was tasked to take $1.4 million out of the staffing budget. Because of having both OR and inpatient leadership experience, I was asked to work with the firm as the hospital’s internal productivity expert. At first I didn’t see this as a great opportunity because it required more hours on top of my ongoing jobs. But that nine-month experience turned out to be invaluable to the success of my department and to my career.
What motivates me is not creating/developing a budget or getting the budget right. What jazzes me is getting the right nurses at the bedside, emergency department cart or OR table, and having the right equipment and the right supplies to care for our patients.
Teaching feeds my desire to pass on information that can help other nurses and the organizations where they work. I use experiences throughout my career to help other nurses put their challenges in context and give them different ways to see a problem or approach a solution.
What are the key skills required of nurse leaders to effectively manage the financial performance of perioperative services?
As nurses, if we want to advocate for our patients in today’s healthcare environment, we need to learn this foreign language of finance. Only by understanding the financial aspects of the business can we protect those things that are most important and have a large impact on patient care.
Nurse leaders must clearly understand expenses and revenue. First, understand that gross charges don’t equal revenue for the hospital. Second, know your expenses . Third, understand and manage productivity in the work environment. As an example, know how to flex volume --because that’s where you’re going to attain staff productivity -- while maintaining the satisfaction of your team. Fourth, know how to maintain collaborative relationships with physicians to help drive out costs, especially in the OR.
Being a leader means knowing that you are not going to have all the answers. This makes it critical that you get the team involved in flagging problems and seeking ways to reduce waste. My goal is take expenses out of non-value added items. An example of involving the entire team is this: no one knows better than the staff who open custom packs everyday in the OR what wastes may be included in the pack that needs taken out because it’s no longer used but this has not been passed on to someone who can make those changes. Ask the team!
Let’s say a physician comes in and he/she wants to add an expense to a case, such as a new product. A nurse leader’s first answer is not “No”, but “Oh, this is a great product! Can you tell me if it decreases OR time or the patient’s length of stay?” “How does it benefit the patient’s outcome?” These are the quality measures. And then, a nurse leader should say, “Let’s look at the costs.” It could be a really good product at a higher cost with great benefits. So the cost is justified and we bring the new product in. I worked with an ob/gyn surgeon who wanted to bring in a disposable supply for a case. When the cost analysis was complete, I went back to him and said “We wanted you to be aware that this is going to increase your case cost by $X” upon which the doctor decided that the investment wasn’t worth it.
I tell nurses in my seminars that the decisions you make are not made between quality OR cost. All evaluations and decisions should continually factor in quality AND cost. Sometimes quality is not easily seen. We need to look at how the benefits of a higher-cost product affect all our customers: the patient, their employer, the insurance company, the third-party payer, and businesses in our community. It’s about digging deeper to get the answers.
In part two of our discussion with Pam, she will answer questions on why nurses need to learn about financial management, the evolving role of nurses and how nurses can impact the financial success at their hospitals.
Join the discussion! Share your advice for tomorrow's nurse leaders in the comments section below.
Today’s providers offer patients some of the world’s most cutting-edge medical treatments, technologies and medications, yet one of the largest obstacles patients face isn’t access to healthcare systems’ tools – it’s navigating the system itself.
Too often, patients with multiple ailments are referred to multiple doctors, but many are not properly brought up to speed on the patient’s health history. This results in wasteful or duplicate testing and exams, confusion and frustration for the patient, and more obstacles for doctors. Hospital executives know this from both professional and personal experience.
Care coordination is increasingly important in achieving the Triple Aim – improving the patient experience, improving population health and lowering per-capita healthcare costs. Better care coordination can help hospitals boost their patient satisfaction scores and improve population health by better managing care for individuals.
Here are two areas all healthcare providers should be focusing on when it comes to care coordination to improve patient experience:
1. Integrating technology where possible.
Information within a healthcare system is often fragmented and inconsistent, despite the fact that 78 percent of office-based physicians have adopted electronic health records.
The benefit of EHRs is greatly limited when clinicians have to read through them the same way they did paper charts. Simple fixes, such as standardizing units of measurement (meters versus inches, for example) or adding short summaries of office visits can greatly alleviate confusion and save time.
Working toward more significant changes, such as integrating a patient-based portal across silos to easily share information and updates, such as syncing lab results from multiple sources, can greatly improve efficiency and raise patient satisfaction scores.
2. Establish a point person
Following the implementation of the Affordable Care Act, more payers are tying reimbursement to patient experience. What better way to improve experience than helping patients navigate the system? Whether within a hospital’s four walls or a primary care doctor’s office, care coordinators can cut down on duplicated efforts, delays and miscommunications, and make significant strides toward a patient’s experience in your health system.
Care coordinators are serving an increasingly important role in providing more holistic care for individuals. They find them reliable transportation, enroll them in low-cost pharmacy programs, and make sure, especially for elderly patients, who they are taken care of at home – in addition to aiding with insurance claims and scheduling appointments.
Due to the changing healthcare landscape, providers are now incentivized to work toward improving the patient experience. Though there may be a variety of strategies to boost patient satisfaction scores, care coordination tactics such as investing in better technology and working with local care coordinators are sure-fire tactics to increase efficiency, reduce patient frustration and improve patients’ overall well-being.
How is your team working to improve patient care coordination? Share your story in the comment field!
In today's healthcare environment, lowering per-capita healthcare costs while improving the patient experience and overall population health is of vital importance. This is especially a priority with lung cancer - the #1 cause of cancer-related deaths in the United States. Early detection and care coordination play an important role in improving both the patient experience and stage of lung cancer at diagnosis - while also reducing costs.
Listen to an in-depth, on-demand discussion on developing a thoracic program from both an administrative and clinical perspective. We look forward to a robust discussion and live Q&A.
Jennifer Mattingley, MD, Specialty Physician Services
Director of the Pulmonary Nodule Clinic, Gundersen Health System, WI
Patrick Whitten, MD, FCCP, FAASM
Director of Interventional Pulmonary-OSF St. Francis Medical Center
Clinical Assistant Professor of Medicine, University of Illinois College of Medicine (UICOMP)
Karen Fordham, VP & COO
Detroit Medical Center (DMC) Huron Valley-Sinai Hospital, MI
As more healthcare organizations move toward a value-based care reimbursement model, it may seem that nothing short of complete system overhaul will allow organizations to meet every one of the patient-centered goals laid out by the Affordable Care Act. Yet, in order to do repairs with the engine running, it is helpful to prioritize and tackle goals first that will have the most widespread impact.
One of the best places to start is integrating shared decision-making practices between providers and patients. Shared decision-making occurs when multiple treatment options are possible and doctors collaborate with their patients on medical and financial decisions. According a policy analysis study conducted by the National Institute for Health Care Reform, when patients are empowered with tools and comprehensive information about their treatment options, they are much more likely to adhere to their chosen treatment plan, which in turn reduces readmission rates and raises patient satisfaction scores.
A good first step toward implementing shared decision- making is adding in reminders or other effective prompts for clinicians in an electronic health records (EHR) interface. When doctors use EHRs to order specific tests or prescriptions, EHRs can also prompt the doctor to access a patient decision aid and begin a discussion with the patient about the possible treatment options and prices.
A second step toward a better shared decision making process is providing incentives. For doctors already working within value-based care models, the time and effort spent discussing options with patients can improve the patient experience. Shared decision-making is also a great strategy for doctors to improve patient outcomes –the more informed and involved the patient is, the better they understand how to take care of themselves and are more accountable for their care
Another simple, yet effective step is applying for grants to create better patient decision aids. The Affordable Care Act mandated HHS to establish a program to improve shared decision making, which includes awarding grants to healthcare providers to create and improve patient-decision aids.
How is your organization integrating shared decision making? Tell us in the comments field below.
Despite its numerous advantages, minimally invasive surgery (MIS) is widely under-utilized in the United States, as we shared in a recent post. “MIS is increasingly recognized as a better option for patients due to the lower cost, quicker recovery and fewer risks for complications compared to traditional surgery,” said James Boye-Doe, Director of Provider Solutions at Medtronic Health Systems Advantage. Boye-Doe works with healthcare providers nationwide to help expand their adoption of minimally invasive procedures.
For providers, adopting minimally invasive procedures will be imperative in fulfilling their objectives to lower costs and improve patient experience within their surgical service lines. Yet, many providers are slow to adopt them because of the high level of expertise involved. Surgeons and their teams must take the time to learn and practice these procedures – and supply chains, too, must adapt.
“Implementing these procedures may be difficult at first, but they will pay off in the long run,” says Boye-Doe. “It helps in reducing cost of care, and improving the patient experience of care.”
The patient, provider, and employer can benefit from MIS, as illustrated below:
Although the operative cost to perform minimally invasive surgery is typically higher than conventional surgery, the entire cost – from when that patient walks in the door until 90 days after their discharge – is typically less,” said Boye-Doe, adding that a main driver of the high cost of surgeries are the complications and extended stays at the hospital following the procedures, many of which can be avoided with a MIS approach.
Covidien offers services to help build multidisciplinary approaches through collaborative care to drive efficiencies and enhance the patient experience.
Visit us at http://www.medtronic.com/covidien/support/mhsa to learn more.
As one of the most data-driven departments within a healthcare organization, the supply chain is playing an increasingly important role in reducing costs and improving patient outcomes.
This fall, Modern Healthcare Custom Media, in partnership with Covidien, invited three prominent supply chain executives to participate in an exclusive roundtable discussion about this topic.
The roundtable event was moderated by Fawn Lopez, Vice President and Publisher of Modern Healthcare, and our panelists included Joe Dudas, Vice Chair of Category Management at Mayo Clinic, Vance Moore, Senior Vice President of Operations at Sisters of Mercy Health System and Nancy LeMaster, Vice President of Supply Chain Transformation at BJC HealthCare.
What was discussed? Here are 7 key takeaways. Watch the full webcast.
1. Standardization and automation are key to success. Many supply chain executives, like Joe Dudas, are working with suppliers to convert product identification numbers to GS1 standards. Other industries, such as retail and manufacturing, long ago perfected standardization and automation to lower costs while accurately meeting demand. Standardization will help clean up supply chain data in healthcare, while automation is important in reducing human error and waste, with potential savings in the millions.
2. Get an outsider’s opinion. Independent analysts can help clean and analyze your data in fresh and innovative ways. They’ll also be able to devote the time and attention needed to adequately understand your data so your organization can channel it to drive decision-making. Vance Moore from Mercy Health, for instance, mentioned third-party vendors helped value his organization’s data between $20-40 million.
3. Don’t wait for perfection. Data transparency is the best (and quickest) way to clean your data to make it more effective. Your data will never be perfect, said Nancy LeMaster from BJC HealthCare, so there’s no use in waiting to release it into the hands of your employees. Working with data in real-world instances will reveal its practical applications, as well as the areas where it may not be so practical.
4. Know what you’re looking for when it comes to analytics. Data mining is a project by itself, which is why it is important to understand what you’re looking for before diving into the analytics. Joe Dudas from Mayo Clinic suggested first dissecting the questions you’d like answers to and identifying the problems you are trying to solve. Then, create a data infrastructure to get answers to those questions in a peer-led forum and a platform to bring transparency within the entire organization.
5. Find the right talent – not necessarily from healthcare. The right people are critical to transforming data into an organizational asset. And healthcare experience is not necessarily important in a resume – in fact, data and analytics experience from other industries can bring your organization fresh perspectives to shine new light on your data.
6. Urge partners to rely on data when talking up products. To invest in accountable care initiatives, providers need to be purchasing tools and technology that is worth the expense. Encourage vendors to reference data when discussing how and why their new or upgraded product will improve patient outcomes.
7. Share, share, share. Start a dialogue with your trading partners about transparency. Ask about their costs and ask for suggestions about how to be more efficient. Not all will be receptive, but those who are may turn into one of your more cost-effective partnerships.
Chronic illnesses and diseases pose some of the greatest challenges for managing population health. Obesity, for example, affects more than one-third of American adults. Yet its causes are largely due to lifestyle factors that cannot be adequately addressed in just a couple of doctor’s visits.
To improve outcomes for chronic diseases, providers are making investments in care design that provide patients a comprehensive framework for change, rather than just diagnosis and treatment options.
“When seeing an obese or overweight patient, primary care physicians don’t necessarily have the time or the expertise to deliver the best intervention for that particular patient,” said Eric Jakel, Director of Provider Solutions at Covidien. “But with access to a comprehensive weight loss program, any patient could be referred to a multi-disciplinary center where many different interventions are available – whether it’s medical, pharmaceutical, lifestyle or surgical – then the optimal treatment decision is made between the patient and the team of specialists.”
Sentara Medical Group, a division of Virginia-based Sentara Healthcare with more than 100 facilities, partnered with Covidien to transform their bariatric surgical program into a first-of-its-kind comprehensive bariatric and weight loss center within the community. Sentara hired a medical bariatrician, dieticians, a psychologist, and an exercise physiologist; to offer patients the widest variety of options for weight loss and to achieve multi-disciplinary treatment decision support. Download the case study here.
“Despite the highly competitive market in the area, Sentara Comprehensive Weight Loss Solutions remains a leader because of its combination of expertise and access to a range of metabolic medicine related healthcare options in one convenient facility,” said Dr. Stephen Wohlgemuth, MD, FACS, FASMBS, Medical Director for the Bariatric Center of Excellence at Sentara Norfolk General Hospital.
Comprehensive, multi-disciplinary weight management centers offer a highly-effective option to address costly comorbidities - which are typically chronic and weight-related.
Is your hospital investing in Comprehensive Care Centers? Tell us in the comments below, or connect with a Medtronic Health Systems Advantage team member to discuss options.
Today’s nurse leaders play an important role in supporting the financial well being of their healthcare organizations. However, the demands of day-to-day clinical work don’t always afford them the opportunity to hone their financial skills.
As the chief nurse executive of the north region for the 14,000-employee Community Health Network in Indianapolis, Indiana, Pamela Hunt draws from her 17+ years’ experience as a nurse leader and administrator to enhance her peers’ financial management and operational planning prowess.
We recently spoke with Pam about the opportunities nurse leaders have to make a difference, both financially and operationally, within their organizations.
Why should nurse leaders learn about financial management?
Our organizations have a responsibility to both the organization and to the patient. Nurses must learn financial management so that we can support the organization’s fiscal responsibility, which helps ensure quality for our patients.
If you’re a nurse leader and cannot describe what’s in the equation for staff productivity, or you don’t understand why flexing staff volume is so important, or you cannot improve productivity by matching hours required to the demand for nurses in the OR, or the patient’s bedside, then you’re not going to be successful, and your facility won’t be successful. And what may happen is your staff may be reduced because you’ve been inefficient.
As a nurse leader, the worst thing is to not be over or under budget. The worst thing is to not be meeting budget and not know why. The nurse leader’s responsibility is to always question and understand why there’s a variance, which gives you the knowledge and power to do something about it.
How do you see the role of nurse leaders evolving in their relationship with physicians to succeed in this era? What about suppliers? Patients?
Across our industry, we’re trying to get costs down to meet Medicare rates. To be successful healthcare organizations will need in embrace a variety of skill levels in the acute care setting. I think that the only way that we’ll be successful is having the right people in the right places, and that all nurses work at the top of their license. We’re going to see a wider range of people with different skills working in an acute care setting in order to get more hands at the bedside.
Advance practice nurses, or nurse practitioners (APRNs) must be able to work to the full extent of their skills, training and scope. We also need to look at roles and responsibilities for the RN, the licensed practical nurse (LPN), the nursing assistant and the certified medical technician (CMT) in acute care settings.
What can nurses do on the clinical side to have a positive effect on the financial side?
The nurse leader in the unit drives the clinical impact on financial outcomes by being open to suggestions and implementing the great ideas that staff brings to her or his attention. One of my sayings is that “Nobody knows better than the nurse at the bedside or in the OR what we’re opening and wasting, or what doesn’t work and is consuming our time and energy getting it to work.”
One of the suggestions I give nurse leaders in my seminar is to have all their team members complete an exercise with three questions. The first question speaks to productivity: “If I had an extra hour of work, I would do X.” The second question, which speaks to waste reduction, is, “We could save costs by doing Y.” The third question, which addresses patient, family and community sentiment and informs our marketing efforts, is: ”I would tell my family member to come into this hospital because of Z.”
By answering these questions, the nurse leader can harvest great ideas to improve productivity, reduce expenses and increase revenue by increasing volume
When staff have financial ‘skin in the game’, it’s always more meaningful to them. So I think hospitals with gain sharing programs — that share financial rewards with employees when they reach margin, satisfaction and quality measures — are more successful than hospitals that don’t.
What are some key strategies to building collaborative teams?
Communicate to your team what you are looking for and why. Give them as much information as possible. Then ask them what ideas they have that you believe will solve the challenge.
Publicly reward employees for helping achieve cost savings or process changes. Over time you create a sense of culture that we’re here to do work efficiently and if we all do that well, we’ll all have jobs. And that’s important, because two of the four healthcare systems in our community had workforce reductions last year.
Cost, quality, outcomes and safety are all so critical to a hospital’s performance. How does a nurse leader strike a balance to focus on all?
You must constantly measure all of those things and understand you cannot have improvement in one area at the risk of failure in another. Financial health is connected to quality and to the patient’s perception of care. Our region’s departmental monthly operating review scorecards includes measures such as retention rate, quality metrics, patient perception of care scores, financial performance, and growth success. There is a cost to such quality events as: a surgical site infection, an additional day of patient stay, and a medication error.
I tell my seminar participants about an inpatient unit where we decreased nursing hours per patient day. Six months later we revisited performance for that unit and discovered that its quality metrics were not being met. We went back and increased the nursing hours. It was costing us too much to be without that additional nursing support.
At a heart hospital I have responsibility for in the north region, the OR team demonstrated 14 months without a surgical site infection. Based on that standard of quality, we estimated $200,000 cost savings compared to the heart hospital’s prior year performance.
Join the discussion! Share your advice for tomorrow's nurse leaders in the comments section below.
Click here to read part one of this series.
Yale-New Haven Health System & Bristol Hospital: A Value Analysis and Supply Chain Partnership That’s WorkingMarch 29, 2016 1:00 PM
How to improve your hospital's efficiency and cost savings.
"Sixty percent of our hospital costs are labor costs. Because it makes no sense to cut costs at the patient's bedside, we must create savings with the supplies and products we use. To generate higher supply savings, it is essential to have the right people and the right support network in place." - George Eighmy, CFO, Bristol Hospital
In this ever-changing and challenging climate, hospitals must operate as efficiently as possible. From a supply chain perspective, that means using the most clinically appropriate supplies at the lowest available price.
Increasingly, large hospital systems are sharing their supply chain expertise by establishing collaborative agreements with smaller hospitals within their states and regions.
These partnerships work two ways. First, they expand access to the analytical tools and purchasing power of the smaller hospitals while helping them operate within limited budgets. Second, they offer the larger system's supply chain organization new clinical insights and expanded volume opportunities. These factors strengthen the collaborative's overall value analysis and strategic sourcing decisions.
We recently spoke with George Eighmy, Vice President and CFO, Bristol Hospital (a $165 million system with 150 beds) and Keith Murphy, System Director, Strategic Sourcing and Clinical Value Analysis, Yale-New Haven Health System (a $3.3 billion system with 2,130 beds) about how their hospitals' partnership benefits the value analysis, strategic sourcing and purchasing activities for these Connecticut-based healthcare providers.
When and how did the idea for the Yale-New Haven Health System and Bristol Hospital collaboration develop?
George Eighmy, Bristol Hospital: Three years ago, we withdrew from a Connecticut hospital purchasing system, which left us with no strategic sourcing relationship. We were at the whim of our vendors and our costs began to skyrocket. Our CEO, Kurt Barwis, was familiar with the Yale-New Haven Health System and its supply chain expertise. We reached out to them for support in rebuilding Bristol Hospital's entire purchasing, value analysis and supply chain organization. After our first year working with the Yale-New Haven Health team, we formalized an agreement to become clinically integrated, which allowed for a much higher level of cooperation.
Keith Murphy, Yale-New Haven Health System: Our team provides purchasing, supply chain and value analysis support to Bridgeport Hospital, Greenwich Hospital, Yale-New Haven Hospital and the Northeast Medical Group; Bristol Hospital is now a part of that collaboration. Our value analysis team draws from the input of nine clinical committees. Physicians, nurses and supply chain experts from our hospital partners participate on these committees. Their insights, gained from experiences within their organizations, offer an essential breadth and depth of perspective that drives our supply chain process.
Our value analysis team and the clinical committees who advise them understand that saving money is important. But they also know if we don't get the right products to our patients, money savings don't matter.
GE: Through our partnership with Yale-New Haven Health, we are realizing significant price savings. But what's really valuable is our ability to determine which clinically effective suppliers offer the lowest price; we were not able to do that before. We benchmark our supply needs. We participate on Yale-New Haven Health's committees, and then bring back those insights to Bristol Hospital's surgical and medical/nursing committees.
We tell our physicians "This is what Yale-New Haven Health recommends and this is the approach we need to take." Our doctors understand that when we recommend certain medical and surgical supplies, that through the partnership we have done our due diligence. Ultimately we may not single source a product, as different products may have different niches. But we always remember that efficiency must always be second to clinical value.
What are the goals of your value analysis program?
GE: Through our partnership with Yale-New Haven Health, our goal is to purchase the most clinically valuable products at the lowest prices. We evaluate hundreds of products; some are high cost, low volume while others are low cost but low volume. Our hospital is leveraging the expertise of Keith's team to make sure we are as efficient and effective as possible.
KM: While we know that our hospitals' savings won't all come from the supply chain, we understand that supply chain is a big piece of cost savings. Each member of our team does a technological analysis of each process. Our RNs take the time to understand if the products we are reviewing are clinically acceptable. As a member of the New England Purchasing Coalition, encompassing 70 hospitals and 22 health systems across six states, we use many tools to drive value, including an e-bids process.
How is your value analysis process structured?
KM: The Yale-New Haven Health System's value analysis process includes nine committees that are managed by a clinical leader. To evaluate products by service line, we engage with five to six clinical and five to six non-clinical committees. These committees spend a lot of time researching and finding the right products for our patients.
Bristol Hospital's clinicians actively participate on all the Yale-New Haven Health's value analysis committees. These conversations are essential to our collective price negotiations.
GE: Because Bristol Hospital's value analysis structure is smaller, it's wonderful to be able to leverage the knowledge and experience that Yale-New Haven Health's committees bring. Through our surgical and medical evaluation teams' involvement, Bristol Hospital's clinicians better understand and buy into product recommendations.
Are the decisions you make in the partnership driven by clinical considerations? Material manager/supply chain considerations? Or a combination of the two?
KM: We are not dealing with widgets; we are working to improve people's health. These are not financial decisions alone; they must be approached first from a clinical perspective.
GE: While purchasing managers run the process, they don't make the decisions. The Yale-New Haven template helps us make better decisions. Comparative effectiveness is what we look for. Is the product clinically safe? Does it provide the best outcomes?
Our hospital recently considered purchasing a new kind of lead cable for our telemetry monitors. Our nursing staff initially thought the product's quality and $100,000 projected savings made sense. However, during the roll-out phase, we found the lead was not designed correctly. We immediately pulled it from the hospital because it wasn't working from a clinical perspective.
What are your thoughts on product standardization?
KM: We want to achieve one quality standard of care. If one category's supplier drives that, great, but if multiple products or suppliers get us there, that's OK too. Our chief medical officers standardize the practice pathways to care; product standardization follows those pathways. In wound care, our system was able to reduce the number of suppliers from six or seven to two.
GE: Our clinicians are very passionate about having the right products. Standardization is a four letter word to most. However, working with Yale-New Haven Health, we're able to look at products from the standpoint of clinical outcomes, which helps them view things differently.
What is the level of executive support at Yale-New Haven and Bristol for this supply chain collaboration?
GE: I am the executive sponsor for Bristol Hospital's involvement. Our president, chief surgical officer and chief nursing officer are all committed to the partnership.
KM: Yale-New Haven Health's value analysis and strategic sourcing process has the complete support of our C-suite and our oversight committee. While physician involvement is a big part of our committees' work, our CFO and COO also serve as change agents with doctors and nurses who may be accustomed to using certain products.
GE: Change is hard. Doctors historically have wanted to select the products a hospital uses and where they're purchased. The good news is that our process now has clinical support at all levels, which makes it easier to develop consensus on change.
How is the value analysis partnership positively affecting other parts of your respective health systems?
KM: Our analytics team looks at our financial data in the aggregate and by committee. In past, materials management did not look at outcomes. Now they look at patient length of stay and quality measures. Along with the cost per procedure, what are the quality variances? We look at the big picture--savings data is one component, but clinical data is what drives our decisions.
GE: I can tell you that what I report out is very beneficial to staff morale. When we can cut $1 million in supplies from a $160 million budget that means we do not have to cut staff. Every time we find savings on the non-labor side, we are saving another job.
KM: We tell our committees, "It's really about 'staff or stuff'.'' Good decisions on the products we purchase allow us to keep staff in place.
Is it possible to be both efficient and thorough in your validation process?
KM: To create change, you must have an efficient process and understand the steps that process requires. In the past we would look at the same products and simply negotiate a better price. Now, we also know that the best decisions happen through research. Our physicians are trying to do right thing for their patients and research helps us with that conversation.
However, research takes time. We select products and negotiate pricing after our committees use a number of research tools and spend time figuring out which products are the most clinically acceptable. In specialties, such as orthopedics, we also use trials to determine products' efficacy and discuss their benefits or drawbacks.
GE: Suppliers typically use their own research when they meet with doctors. It is up to us to dig into and vet that research to determine if it is correct. As a larger and more heavily resourced healthcare system, Yale-New Haven Health offers Bristol hospital independent research that helps us validate or refute suppliers' data. This gives us the authority to ask additional questions and determine if the product is right for our needs. The value analysis that is conducted within our partnership enables us to say to our physicians, "We've tried this product and it's lived up to (or failed) expectations across several hospitals."
In today's dynamic environment, what are some of the more significant changes that have come about as a result of the Yale-New Haven-Bristol partnership?
GE: In the past, we tended to make one-off decisions on products without having a significant meeting of the minds. After severing our prior purchasing agreement, Bristol Hospital did not have the luxury of trying and failing many times. So it was extremely valuable to take Yale-New Haven Health's process and layer it with ours.
Now, with the Yale-New Haven value analysis template, our structure is efficient and more inclusive. The hour-long meetings of the past, where each person lobbied for their own self-interest, are gone. Now, a broad range of clinicians come together in a one-hour meeting, align their needs and make collective decisions.
KM: Management provided the support for us to get even more clinicians involved. Our re-designed process has allowed us to make decisions on 250 projects throughout our health system last year. That would have been very tough if we did not have an efficient system.
We also take advantage of the clinical documentation and referencing that our group purchasing organization (GPO), VHA Inc., provides to the committees we have in place. The Yale-New Haven Health system has 500 contracts expiring every year; without VHA's support I would need to double my staff. VHA can also help us do comparative analyses based on national trends. Both the New England Purchasing Coalition and VHA help guide the conversations that help us choose the right products.
GE: There are leading practices in whatever we do, and we also know that bigger is not always better. Clinicians within the partnership's affiliates may have tried things that Yale-New Haven Health has not yet tried. If one product is more expensive but the outcomes are better, the price may be worth the benefit. We are in constant conversation around our practices, products and options. Above all, our clinicians and physicians won't let us make mistakes; their input is invaluable.
What is the role of your suppliers as you bring in new products and new technologies?
KM: Products mean nothing without customer service. We work with our suppliers to make sure they can provide training and education to our staff over time. Our suppliers must stay engaged and continue partnering with us to ensure appropriate use of products, and to look for value opportunities such as standardization.
GE: Our suppliers must be on-board and on-site to support product rollouts and to offer education and training. They must keep an eye on product utilization and recommend changes that support our efficiency and quality goals. Their support—or lack of it—could spur a decision to keep or replace them.
What tips do you have for other smaller hospitals that may be looking to partner with a regional medical system?
GE: Historically, doctors at Bristol Hospital were the key drivers of all care. Then along came the Affordable Care Act and its drive to efficiency. Physicians no longer have the same control over the products they want and how they obtain them. Through our partnership with Yale-New Haven Health, our value analysis committees now ask doctors, "What do you need and how can we help get it for you?" When five doctors agree and one disagrees on a product or service, this changes the group dynamic and spurs buy-in; the process becomes more inclusive and objective.
Mergers and acquisitions are dramatically changing the healthcare landscape. Every small hospital system knows this; we do not want to be left out in the cold. As a small hospital, what you do not want is to be dictated to culturally by your larger partner. I would advise smaller hospitals contemplating this kind of partnership to not jump into the marriage immediately. Rather, look under the rock awhile and ask if it is a good cultural fit. Will you have a voice? Will there be collaboration?
Our collaboration works because Yale-New Haven Health brings doctors and clinicians together who help us make efficient sourcing decisions as well as ensure quality and great outcomes at Bristol Hospital.
KM: When clinicians and subject-matter experts join our system from other hospitals, the bigger knowledge pool enables us to make better decisions. Because Bridgeport and Greenwich hospitals are already part of the Yale-New Haven Health system, their clinicians' input adds the important perspective of community physicians in those regions. That existing dynamic—of diverse opinion and representation—is one of the reasons Bristol began to explore what is now a successful partnership.
Today, lung cancer is the most fatal form of cancer for both men and women in the United States. The American Lung Association estimates that 159,260 Americans will die of lung cancer in 2014, which is more than breast, prostate and colon cancer combined.
Yet, according to Emily Elswick, Senior Director of Market Development at Covidien Interventional Lung Solutions, lung cancer can have – and should have – similar outcomes to breast or prostate cancer (which respectively have 89.2% and 99.2% 5-year survival rates, compared to 16.6% for lung, according to the American Lung Association).
This is due, in large part, to the fragmented and often disjointed lung cancer care continuum. The system is very difficult for patients to navigate. Not only does this result in confusion and frustration for the patient, but it also negatively impacts survival rates. Proper care coordination is vital to improve both the patient experience and stage of lung cancer at diagnosis.
Improve outcomes with early detection technology & infrastructure
“If hospitals focus time and energy on building comprehensive programs around lung cancer [early detection], it will allow them to find the disease at a more treatable time and stage,” Elswick said. On average, around 85% of patients are diagnosed during the late stages of the disease.1 “It’s a disease, not a death sentence, and it can be more manageable.”
Vital to the success of these comprehensive lung programs, is having the proper infrastructure to guide a patient all the way from detection to cure. “We work with physicians to train them in our technology,” Elswick said. “We then work with C-Suite constituents and the multidisciplinary team around how to build the operational infrastructure of a comprehensive lung program.”
Case Study: Transforming treatment into a service line
The key, according to Elswick, is treating lung programs like a service line. With early diagnostic technology and a clear treatment pathway from diagnosis to recovery, an organization’s comprehensive lung program (rather than a primary care physician alone) can better coordinate care, improve outcomes and lower costs for the patient while increasing revenue for the organization.
Saint Thomas Health in Nashville, for example, has seen significant improvements in earlier diagnosis by reframing lung cancer treatment as a service line, providing patients with a comprehensive program focused on early detection. (In one case study, 54% of patients were diagnosed at stage I or II.)
“They [Saint Thomas] highlighted in their annual report last year that lung is an example of a service line that they’re doing right,” Elswick said. “Our ultimate goal is early detection with immediate resection, which puts a patient’s survival rate of close to 90%.”2
Watch our on-demand webinar Coverage is Here: Are You Ready for New Lung Cancer Screening Patients? This webinar covers the importance and implications of the recent CMS decision, essential components needed for a lung screening program and feature a case study of a lung program that has successfully implemented these recommendations.
1. American Cancer Society: Facts and Figures 2014.
2. SEER Cancer Statistics Review; 1975-2008; National Cancer Institute.
Standardization is important to hospital administrators for many reasons. It improves patients’ quality of care and allows systems to readily measure outcomes and design clinical processes that are better for the patients. It can also provide a better work environment for clinicians and lower overall costs.
Hear what administrators Sandy Wise, RN, Director Contracting & Resource Utilization and Ed Hardin and Vice President Supply Chain Management, CHRISTUS Health; Kelle Laws, RN, MN, CNOR(e), Executive Director Medical Products & Devices, ROi; and Betty Jo Rocchio, CRNA, MS, Vice President Perioperative Performance Acceleration, Mercy Hospital have to say about standardization.
With so much complexity in supply chain with the expanding roles and increased demands of clinicians in the OR, the need to coordinate and streamline several activities, business functions and business partners is so critical to reduce uncertainty, variation and improve overall performance.
Hear what your peers, Kelle Laws, RN, MN, CNOR(e), Executive Director Medical Products & Devices, ROi and Sandy Wise, RN, Director Contracting & Resource Utilization, CHRISTUS Health, have to say about the importance of simplification for all key stakeholders and the value it brings to their organization.
With new goals set by the Affordable Care Act, increasing the quality and cost-effectiveness of patient care has become an even greater priority for providers.
For thoracic oncology programs, this translates to reducing the time from lung cancer diagnosis to treatment, and creating a minimally-invasive continuity of care for patients. For this reason, providers are considering investing in lung programs that focus on early diagnosis as well as care coordination that smoothly guides a patient from diagnosis to treatment and recovery.
“The fragmented care pathway is one of the main problems organizations face in improving patient experience and outcomes, as well as cost efficiencies,” says Kevin Freeman, Director of Provider Solutions for Medtronic Health Systems Advantage.
“Comprehensive care programs are an effective remedy as they create a pre-defined diagnosis and treatment pathway, thus reducing the variance in how patients are cared for. That, in turn, leads to a significantly reduced diagnosis-to-treatment timeframe, providing patients more cost-effective options, such as minimally invasive surgery.”
Recently partnering with a 1,100-bed hospital, Covidien helped improve its diagnostic and care coordination capabilities through the following approach:
Minimally-Invasive Surgery Capabilities
For providers, adopting minimally invasive procedures will be imperative in fulfilling their objectives to lower costs and improve patient experience within their surgical service lines. In this partnership, the process began with the development of the hospital’s minimally invasive surgery capabilities. In collaboration with the Covidien clinical education team, the surgeon attended minimally invasive surgery (MIS) training courses, gained a level of proficiency in video-assisted thoracoscopic surgery (VATS) lobectomy and began to increase the percentage of resections done through this minimally invasive approach.
The second phase in developing the Lung Health Program included gaining multi-disciplinary alignment across the patient care continuum. The goal of aligning pulmonology, thoracic surgery, and oncology was to reduce the time from diagnosis to treatment and create continuity of care for the patient.
Lung Cancer Screening Program
Using the National Comprehensive Cancer Network (NCCN) guidelines to identify high-risk patients, community awareness and an outreach program was established to drive high risk patients in for low-dose computed tomography (CT) scans. The goal of this program was to identify lesions in their earliest stages, increasing the team’s ability to intervene and cure the patient’s disease. The second element was the implementation of the superDimension™ navigation system, the first of its kind to enable Electromagnetic Navigational Bronchoscopy™ procedures (also known as ENB™ procedures). ENB™ procedures provide a minimally invasive approach to accessing difficult-to-reach areas of the lung, which can aid in the diagnosis of lung disease.
Patient Outreach and Internal Education Programs
The final phase of this comprehensive program was to develop a marketing communication program, both internally at the hospital, and externally to their served patient population. The goal of this phase was to increase the awareness around lung cancer, the importance of wellness checks and screening, as well as the benefits of minimally invasive surgical interventions. The communications focused on the Hospital as a “destination center” for patients that have disease of the lung.
As a result of implementing a comprehensive lung program, the hospital was able to:
“By creating a Comprehensive Lung Health Program, the hospital has been successful not only in reducing the total cost of care for patients presenting with lung cancer,” Kevin Freeman adds, “but they’ve also measurably improved the way the hospital cares for lung cancer patients.”
Is your hospital investing in Comprehensive Lung Health Programs? Tell us in the comments below, or connect with a Medtronic Health Systems Advantage team member to discuss options.
Not only is the supply chain a target for significant cost reduction, but improvements in supply chain performance are also a central strategy for overall hospital sustainability in a new era of value-based purchasing. For hospitals, this is increasing demand for greater efficiency and accountability throughout the entire hospital supply chain and driving a new level of discipline in supply chain management.
One important way to become more efficient is to reduce the level of SKUs within your inventory management system. Optimizing the resources in your hospitals has significant clinical and economic advantages.
Hear what your peers, Kelle Laws, RN, MN, CNOR(e), Executive Director Medical Products & Devices, ROi; Betty Jo Rocchio, CRNA, MS, Vice President Perioperative Performance Acceleration, Mercy; and Sandy Wise, RN, Director Contracting & Resource Utilization, and Ed Hardin, Vice President Supply Chain Management, CHRISTUS Health, have to say about the benefits of SKU reduction.
Hear what your peers have to say about the benefits of SKU reduction:
On behalf of Medtronic, I’d like to extend our congratulations to you and all those in the healthcare communities you serve for the landmark decision announced by the Center for Medicare & Medicaid Services (CMS) on Thursday, February 5, 2015. This important decision requires Medicare coverage of low-dose computed tomography (CT) lung cancer screening for approximately four million at-risk beneficiaries – a huge victory for patients and healthcare providers across the country.
For so many years, patients have been without a standardized early warning system for this devastating disease – until now. With this coverage decision, together we can celebrate the birth of newfound hope for patients through early action. Details and information about this decision are available on the CMS website.
Now that coverage is on its way, and with the potential for millions of patients to be diagnosed at earlier stages, a responsible and evidence-based approach to patient care is vital. We understand that the development and enhancement of screening programs and care pathways may be of critical importance to your institution, and that screening is most effective when it is part of a comprehensive lung cancer program.
To support you through this process, we extend an invitation to our webinar: Coverage is Here: Are You Ready for New Lung Cancer Screening Patients? This webinar covers the importance and implications of the CMS decision, essential components needed for a lung screening program, and feature a case study of a lung program that has successfully implemented these recommendations. We hope you will join us.
We commend CMS in arriving at this important decision - that will enable earlier detection of lung cancer and may increase survival - changing the face of lung cancer for patients.
Congratulations again, on behalf of all of us at Medtronic.
Michael Tarnoff, MD, FACS
Webinar: Coverage is Here: Are You Ready for New Lung Cancer Screening Patients?
As healthcare organizations continue the transition to value-based care, new titles are popping up in the C-suite. Existing executives are also finding their responsibilities expanding to meet new demands from payers, the government, patients and other stakeholders. Here are a few predictions for healthcare management roles in 2015.
Chief Medical Officer Role Expands to Chief Population Health Officer
CMOs increasingly find themselves responsible for health informatics/IT, population health and care standardization, according to The Advisory Board 2012 Physician Executive Survey. Why? Because physicians are in the driver’s seat when the technology is used to improve clinical care. These responsibilities come on top of a CMO’s traditional concerns for medical staff affairs and quality improvement. This expansion is expected to continue.
Chief Experience Officers Oversee Patient Satisfaction
A new title, co-opted from the technology industry, is the Chief Experience Officer. Sometimes abbreviated CExO or CXO, this role is responsible for raising patient satisfaction scores, which now affect a provider’s reimbursement from Medicare. (Read Modern Healthcare’s Dec. 15 cover story on the new role.) CXOs work internally to influence the overall culture surrounding the patient experience. The CXO may evaluate a wide range of factors that contribute to delivering a positive patient experience, from how comfortable the waiting rooms are to developing a strategy to improve score deficiencies. The CXO typically reports to the Chief Executive Officer or Chief Operations Officer.
Chief Transformation Officer Role Continues to Evolve
Sometimes the CTO is called Chief Accountable Care Officer, Chief Population Health Officer, Chief of Integration or VP of Continuum of Care. These alternative titles provide a good idea of the role’s responsibilities. According to The Advisory Board Company, today’s CTO drives external population health management strategies. Historically, CTOs were tasked with reducing healthcare costs, consolidating vendors and taking other efficiency-driven measures. As this title evolves, the CTO will be expected to analyze market changes and recommend strategies to embrace it, streamline delivery systems and work with internal and external stakeholders to align all groups within a single value-based business model—all a part of making their organization better able to adapt to growing industry changes.
Is your organization adding any new C-suite titles in 2015? Which titles do you think will continue to evolve? Tell us in the comment thread.
With a more prominent seat in the C-Suite, the Supply Chain is the linchpin in strategic projects across their organization. They work more closely than ever with clinicians to help ensure continuous improvements, share ideas, compare products/outcomes and together make informed decisions. One of the most significant ways they have helped their organization become sustainable is by focusing on the standardization of care from a patient perspective.
The Supply Chain holds valuable data that can help usher in healthcare transformation and play a critical role in supporting and guiding change. Not only does the Supply Chain help uncover savings and find ways to deliver better care, but they also help to remove inefficiencies and wasteful processes. Successful Supply Chain leaders collaborate cross functionally and with their trading partners, facilitating education and communication efforts.
Hear from several prominent Supply Chain leaders on how they successfully lead their organization through large scale transition.
During this year’s World Congress 9th Annual Leadership Summit on Health Care Supply Chain, we talked to supply chain leaders about key topics and strategies that are top of mind for them. As leaders in their field, we discussed strategies to integrate supply chain to improve value, how to utilize big data and automation to improve efficiency and outcomes, reducing costs and improving quality by leveraging relationship management and applying alternate purchasing and distribution strategies.
The video series below features key insights from Brent Johnson, Vice President, Supply Chain, Intermountain Healthcare; Jim Connor, Vice President, Supply Chain Operations, Westchester Medical Center; Lora Johnson, MBA, BSN, RN, CMRP, Director, Value Analysis, Grady Health System; and David McCombs, Vice President, Enterprise Resource Planning and Supply Chain Operations, Bon Secours Health System.
Hear what your peers have to say about physician collaboration, value analysis, rep-less model, shared risk, supply chain utilization of data and strategic partnerships.
At the World Congress 9th Annual Leadership Summit on Health Care Supply Chain (January 26-27, 2015), Tom Lubotsky, Vice President Supply Chain and Clinical Resource Management, Advocate Health Care, shares how forging and leveraging a strong supplier relationship can help reduce costs or add value to vital practices.
Listen to Tom’s presentation to learn some best practices on creating strategic partnerships.
For patients with chronic illnesses or serious injuries, family members most often carry the heaviest caregiving burden. Nearly 1 in 3 Americans (29%) serve as informal, unpaid caregivers for a close friend, neighbor or family member, according to The National Alliance for Caregiving and AARP.
In many cases, improving the patient experience is fundamentally intertwined with the family’s experience. Informal caregivers often see a decline in their own heath and up to 70 percent start showing clinical signs of depression. Providing support resources for family members will be increasingly important for healthcare organizations looking to improve the overall health of patients and their caregivers.
Here are three strategies to consider:
1. Offer educational resources
Informal caregivers typically do not have a medical background. Providing educational pamphlets and resources so they can better understand the patient’s condition can help them be better caregivers. Additionally, much of a caregiver’s stress is financial – half of caregivers for elderly patients spend more than 10% of their income on the patient’s care, according to the National Alliance for Caregiving. Helping family members understand their financial options can go a long way in reducing stress and depression.
2. Coordinate supportive care
Half of all informal caregivers are employed full-time, and also devote an average of 20 hours or more per week to caregiving – a hefty burden with few opportunities for breaks. By offering respite care, or connecting caregivers to local respite care services, healthcare organizations can provide peace of mind for family members who have multiple obligations.
3. Provide Personal Health Record assistance
Providers only record pieces of information acquired during patient visits; caregivers often have a broader experience and can offer insights into the patient’s overall health. Healthcare organizations that offer caregivers PHR access and resources can help ease the burden off the caregiver to remember the patient’s health history. PHRs can also help lower costs by eliminating duplicate testing or procedures and improve outcomes by having a comprehensive health history immediately available to first responders and other providers.
How is your organization improving the caregiver experience? If you’ve been a caregiver, what advice would you give to healthcare providers in engaging patient families?
Perioperative nurses and nurse leaders take on many roles these days. They are leaders, educators and problem solvers.
They have to be expert clinical practitioners. They serve as the hub of information going between all healthcare staff and patients to coordinate care and help maintain a safe environment. They also are the linkage to supporting standardization efforts and integral to the hospital – supplier relationship.
Or click each module below to view the imperatives on their own:
Hear what Pam Hunt, BSN, MSN, RN, Chief Nursing Executive, Community Health Network and Sue Bailey, BSN, RN, CNML, CNOR, Clinical Director Perioperative Services, Kaiser Permanente have to say about their role in driving standardization, critical elements to effective decision-making between supply chain and clinical care teams and the ideal vendor/customer interaction model.
Beyond clinical support, what other partnership areas would you like to see from suppliers?
Our suppliers understand the financially challenging environment we’re working in and have been wonderful in coming to the table with ideas. For example, I have worked with orthopedic suppliers who have helped us match the patient’s condition with the joint best suited for their movement needs. They’ve helped us with product standardization, which not only gets us better pricing from higher quantities, but also efficiencies in the OR. They’ve helped us decrease the number of supplies we carry. For example, they expedite delivery of rarely used items that help us reduce inventory without interfering with patient care.
Suppliers are coming to the table and being innovative with their suggestions. They don’t bring us donuts anymore. Instead, they bring us value in our business and value through our partnership with them.
In past negotiations, our orthopedic surgeons sided with vendors, arguing that under capitated pricing, they would not make money from the sale. We were able to get data that showed at the time, the vendor was actually making more off the hip implant than the surgeon was making for Medicare patients requiring the procedure. That helped the physician understand that there was room for improvement in the negotiation.
That being said, I believe that vendors are our partners and that we need to come together to find solutions. Of course, we expect them to follow our rules and procedures. But I also understand that our vendors need to make a living so that their company will be there to continue to supply that product.
Describe the influence nurse leaders have on the product evaluation and purchasing processes.
In my role as a regional executive, I make sure that new products under consideration go to materials management and our buyer first. We determine if there’s a conflict of interest, if we have competing products in the house, or if bringing in the new product would mean doing away with another product. The buyer does all that analysis before the product comes to the clinical side for evaluation. If the product meets our criteria at all levels, the buyer then gives us information to determine if the product is worth bringing in or not. If it’s a good fit, we bring in the buyer, the vendor, the nursing leader and possibly the physician to negotiate the best price.
What trends are you seeing at your hospital network that may not be widely apparent yet?
It’s interesting to gain the perspectives of the nurse leaders all over the country who attend my seminars. I’m surprised to learn that there are still pockets of hospitals across the country that are not asking for discounts, hospitals that aren’t pushing that envelope and asking if there’s anything else vendors can do for them. We continue to use our group purchasing organizations to help us with contract negotiations. Standardization is coming in vogue as physicians become more aligned with their organizations’ goals. Some hospitals incentivize physicians to support a higher level of product standardization.
How do you see the role of nurse leaders changing in the next five years?
I think this work [as financial and operational managers] will become more second-hand to us. The biggest change in the last 5-7 years is that we’ve become very driven by measureable outcomes, and this will continue. In the future we’ll be even more driven by our organization’s financial performance. As nurses, we’re used to looking at HCAHP scores and CMS Core measures and now we’re going to be held responsible for our financial outcomes as well.
Nurse leaders who understand the work to be done and measured, who partner with physicians and finance, and who get their team involved by communicating needs and goals will help drive their hospitals’ success over the next five years and many years to come.
How do you see the role of nurse leaders changing? Tell us in the comment field!
The business model of hospitals and suppliers is evolving into a new collaborative approach. The core of this new approach is centered around maximizing value for patients - achieving the best outcomes at the lowest cost. Every hospital is unique and therefore the approach, structure and execution of these new hospital supplier relationships vary greatly from organization to organization. However, most new models are focused around defining symbiotic partnerships that add mutual value from a financial, clinical and operational perspective.
Download the University of Kansas Hospital and Covidien case study to see one example of how Medtronic is working to create and sculpt this new partnership approach.
The role of the nurse navigator is critical to a successful oncology program. Patients lean on nurse navigators to help guide them through the care pathway, from diagnosis through treatment – acting as a beacon through an often confusing and fragmented care continuum. In a previous post, we talked about the landmark CMS decision to cover low-dose computed tomography (CT) lung cancer screening for high-risk individuals – and the important role comprehensive lung programs will play in the screening, diagnosis and treatment of these patients. More than ever, the nurse navigator role is crucial to effective care coordination and a positive patient experience in lung cancer management.
If you are looking to implement or enhance the nurse navigator role in your institution, please watch the second webinar in our series, New Opportunities in Lung Cancer Management: Screening through Treatment. This webinar focuses on the nurse navigator's perspective on building successful Lung Programs.
You’ll hear from Pulmonologist, Dr. Susan Garwood, and two nurse navigators who discussed:
Watch the on-demand webinar: Right Place, Right Time: Navigating the Lung Nodule Diagnosis
Watch the first webinar in our series: Coverage is Here: Are You Ready for New Lung Cancer Screening Patients?
Standardization has become a key priority in the healthcare industry, as the need to reduce variance and increase the predictability of patient care within health systems continues to grow. The goal of the healthcare industry is no longer solely focused on reducing costs - but rather on value, defined as the intersection of the best outcomes for the patient with the lowest possible cost.
Part of what is driving this are the changes in payment structures from volume-based to value-based reimbursement models. These changes are causing health systems to rethink their operations processes. An intense focus on data, analytics, clearly-defined metrics and standardization of processes within health systems is essential to remain competitive.
In particular, standardization of surgical instrumentation has become a key priority. As we discussed in a recent post, the rise of surgical expenses combined with the reduction in reimbursement has put downward pressure on hospital profit margins. Given that surgical services traditionally have driven profitability in health systems, this is a new challenge for providers who not only have to streamline processes and resources, but also select a supplier who aligns with their goals. What used to be a relationship based on sales transactions, is now evolving into a partnership. Suppliers who can work with health systems to implement programs that drive consistency in care delivery are becoming increasingly more valuable as partners.
A recent report published by General Surgery News discusses the outcomes of a partnership between a health system and supplier (Covidien/Medtronic) as they worked together to standardize across two surgical instrument lines. This resulted in a more efficient use of resources, further decreased the need for costly excess inventory and aligned with the health system’s goals to standardize care through consistent instrumentation.
Historically, hospitals have found it challenging to incorporate several different pieces of data to form one longitudinal view of care. From clinical data to coding and billing, to materials and then cost, the data is rarely available in an actionable fashion per episode of care.
But once you can compile the various data sets in one place, you can start creating a more standard approach to delivering healthcare, which can drive better clinical, operational and financial outcomes for providers and patients alike.
At Medtronic, through our Medtronic Health Systems Advantage team, we are helping providers compile their data into meaningful analysis per episode of care. Take hysterectomies as an example. In one institution alone, we found over $5,000 in cost variability among those physicians performing laparoscopic hysterectomy. We discovered there was significant variability in products utilized, ranging from the type of draping material used to the number of surgical devices, as well as procedure time and length of stay.
With the compiled data in hand, all members of the clinical team met together and were able to identify the variability across the entire episode. We worked together to get all care providers on the same page and increase standardization moving forward.
Supplier partnerships can deliver professionals who not only understand the disease states, but who are also very experienced in business best practices such as lean and six sigma, as well as clinical and hospital administration. Through our partnerships, providers are relieved of the burden to complete these data analyses for themselves, and can instead focus on managing and implementing successful change. When time is precious, such partnerships can make a true difference, in care, cost and quality.
The move toward value-based healthcare is gradually restructuring healthcare to better reward providers and healthcare delivery systems that can provide care in ways that improve clinical outcomes while lowering overall costs.
As an acknowledgement of this shift in healthcare, Medtronic recently sponsored the Insight Center, hosted by New England Journal of Medicine and Harvard Business Review. 2015's Insight Center was “Measuring Costs and Outcomes in Healthcare.” Medtronic is proud to be participating as both a sponsor and as a keen stakeholder in this discussion.
We define value-based healthcare as an effort to develop and deploy products, services and integrated solutions that improve patient outcomes per dollar spent in the healthcare system by improving the quality of care and/or reducing the associated expense. Most importantly, the value derived from the quality of care isn’t determined at a specific point in time that focuses on transactional value. Instead, value is measured holistically over a longer time horizon and in ways that are meaningful to the patient. Learn more about our point of view on costs and outcomes.
Join the conversation at the Insight Center and watch the webinars:
Measuring Outcomes: New Metrics for Health Care Transformation
Speakers: Christina Akerman, M.D., Ph.D., President of International Consortium for Health Outcomes Measurement (ICHOM), and Senior Institute Associate at the Institute for Strategy and Competitiveness at Harvard Business School
Caleb Stowell, M.D., Vice-President Research and Development, International Consortium for Health Outcomes Measurement (ICHOM), Senior Researcher, Harvard Business School
Abstract: Examination of the ability to identify and use the right measurements makes it possible to change our approach to treatment and costs, including risk sharing.
Value-Based Health Care: Reconciling Mission and Margin
Speaker: Robert Kaplan, senior fellow and the Marvin Bower Professor of Leadership Development, Emeritus, Harvard Business School
Abstract: Webinar will be the nexus of research Kaplan is doing on value-based healthcare for his Harvard Executive Education program showing where investments can pay off more than cutting costs in healthcare.
Last fall, Christina Akerman and Caleb Stowell from the International Consortium for Health Outcomes and Measurement (ICHOM) hosted a webinar examining the ability to identify and use measurements that make it possible to change our approach to treatment and costs. What they found is that the transformation to value must be grounded in the measurement of outcomes. Details and learnings can be found in this Harvard Business Review white paper.
Also be sure to check out HBR's Reconciling Mission and Margin Webinar summary.
On January 25-26, 2016, over 100 prominent and progressive supply chain leaders gathered in New Orleans to explore strategies to address current challenges and build capacity for future success. Key topics included:
How healthcare systems have come to see supply chain prowess as a core competency
Supply chain management in healthcare is not a new idea, but it’s certainly one whose time has arrived.
The supply chain is a complex, interrelated system, with numerous players and moving parts. Understanding that interrelatedness — inside and outside the hospital walls — will best serve healthcare organizations in the years to come.
Healthcare supply chains haven’t always been the sophisticated organizations they are today. In the past, supply chains were highly transactional, and employees saw their role as fulfilling orders to meet physician and patient needs at the point of care.
As group purchasing organizations (GPOs) evolved, hospitals relied on intermediary organizations for purchasing but didn’t employ a lot of business strategy in the supply chain function. As hospital systems grew, several factors came into play:
Today, some systems have fully integrated their supply chain functions — even to the point of manufacturing or assembling some supplies on their own. Large systems have come to see supply chain prowess as a core competency.
Some complex systems have evolved toward a consolidated service center model with self-distribution. This shows potential for streamlining a hospital’s supply chain to achieve high levels of performance and innovation.
While it’s not for everyone, this model speaks to the higher level of sophistication and standardization that the marketplace — and the modern supply chain function — now demands. Supply chain intermediaries have recognized this evolution and, in many cases, adjusted their offerings to provide new kinds of value to their customers. Eugene Schneller is the Director of Health Sector Supply Chain Research Consortium at CAPS
Research (HSRC-ASU) and Professor of Supply Chain Management at the W.P. Carey School of Business at Arizona State University. He is passionate about the ways the health sector can learn from other industries that have embraced the value of big data and trusted buyer-seller relationships.
Eugene Schneller is the director of Health Sector Supply Chain Research Consortium at CAPS Research (HSRC-ASU) and professor of Supply Chain Management at the W.P. Carey School of Business at Arizona State University. He is passionate about the ways the health sector can learn from other industries that have embraced the value of big data and trusted buyer-seller relationships.
Despite remarkable advancements in technology, there is still a great deal of human interaction in the success of the supply chain. Our research at Arizona State University has centered on two key initiatives in this realm: Project Trust and Project UDI (unique device identification).
Project Trust speaks directly to the trust that the best device manufacturers and suppliers have brought to the table for many years. We are doing an in-depth, study of what matters most to manufacturers and hospital supply chains in maintaining good relationships and increased performance. These areas include:
We also seek to understand the barriers that exist in building good relationships.
For example, trust is earned through relationships with manufacturers’ representatives. Product reps know their devices inside and out, and are often present in the operating room, providing education and advice to surgeons during procedures. This can cut both ways, seen as either upselling in the surgery suite or something that only a trained human being can provide.
It’s an interesting relationship: When surveyed, suppliers frequently said that their most trusted customers — aside from exceptional provider organizations — were the larger group purchasing organizations (GPOs).
Yet hospitals, when asked the same question, said that their most trusted partners — aside from specific suppliers — were distributors. This was an important testimonial to the ways that both GPOs and distributors have listened to the marketplace to provide added value to their customers.
Project UDI initially sought to assess the FDA’s unique device identification (UDI) mandate to promote standardization and inventory management. It also sought to clarify how UDI would help develop registries and other mechanisms to improve patient safety and care.
Today, at ASU and CAPS Research, we’re reaching out to suppliers to truly understand how information from a UDI system helps, and what barriers they encounter to putting such data to good use. By gaining value from the UDI mandate, suppliers have the potential for significant ROI.
With this new focus on capturing important information on devices in both their clinical use, and in directing information back to the entities that made the device's component part, new opportunities are realized. Device manufacturers can measure effectiveness and efficacy of their component of the device when information about the use in the patient is shared. That way, it's not merely educated guesses about a syringe or a port, or any other component—we get to know how they function in the real world, in concert with other parts that make the device whole.
Key to uniting all these efforts is big data. And its value can go both ways: Buyers can alert device manufacturers how products perform, both economically and clinically.
For healthcare organizations looking to manage population health and succeed in a bundled payment environment, big data can be critical. It provides the aggregated information needed to assess discrepancies in how products are used, as well as both economic and clinical outcomes.
Make no mistake: A great deal of fragmentation still needs to be wrung out of the system. The continuum of care is under study for efficiencies — from the ambulance through the hospital to the home or post-acute care. There is still unnecessary waste and repetition. As other industries have learned, progress comes from visibility into the “end-to-end” chain of value.
In the future, there will be an even more global approach to the supply chain ecosystem through the lens of patient care and the Triple Aim, which embraces population health. When big data can uncover specific outcomes, that information can help successfully manage both the value and supply chains of the future.
Eugene Schneller is the director of Health Sector Supply Chain Research Consortium at CAPS Research (HSRC-ASU) and professor of Supply Chain Management at the W.P. Carey School of Business at Arizona State University. He is passionate about the ways the health sector can learn from other industries that have embraced the value of big data and trusted buyer-seller relationships.
Morbid obesity is a chronic, progressive disease. The American Medical Association (AMA) recognized this in 2013 – a step in the right direction. But there is still a great deal of work to be done to cast obesity as a disease, eliminate stigmas and reshape how patients should be treated as a result.
According to the CDC, one-third (or 78.6 million) of the United States population is considered obese. Obesity has become an epidemic in the United States. And still, it is often viewed as a lifestyle choice or character flaw, rather than a disease.
Many metabolic and bariatric programs find success by developing methodologies that de-stigmatize obesity and re-cast it as a multi-factorial health condition that deserves treatment. These campaigns are often launched through a variety of channels, including live educational events, advertising and social media.
We need to change perceptions around obesity, and it starts with transforming the way these patients are managed.
Treating the Disease, Not Just the Associated Conditions
Historically, many healthcare providers have focused solely on the diagnosis and treatment of the comorbidities associated with obesity. These patients often suffer with conditions such as heart disease and type 2 diabetes, which are treated separately by their physicians.
But with forward-thinking healthcare providers transforming the way these patients are treated, there are significant opportunities for patients and providers to better manage obesity holistically – which also address the devastating comorbid conditions. But at times, when patients search for solutions, they can experience challenges in finding the right weight loss programs that follow the most recent guidelines.
A recent study released by Johns Hopkins found the weight loss marketplace is more like the “Wild West” and that only 9 percent of programs in their study adhered to 2013 American Heart Association, American College of Cardiology, and The Obesity Society weight-management guidelines. Most of the programs also come with significant out of pocket medical expenses that are not covered by their insurance programs.
Improving access, treatment options, eliminating social bias, stigmas and increasing public awareness of obesity, while also evolving patient care, can be challenging for the healthcare industry. With morbid obesity becoming a major public health issue, helping patients overcome this disease benefits not only the individuals but also society as a whole.
Patrick Mahoney is currently Director of Bariatric & Metabolic Patient Engagement Solutions for Medtronic.
Wringing waste out of the supply chain not only keeps the healthcare industry “green,” it also enables gapless savings and increases efficiency.
Since Medtronic designs, manufactures and reprocesses medical devices, we have unique insight into the issues that occur throughout the product lifecycle of medical devices.
The first insight is that original equipment manufacturers that are also reprocessors can benefit hospitals for two reasons: 1) they can easily remanufacture and restock based on learnings from downstream manufacturing, which helps get ahead of product recalls and avoids sending medical devices to the landfill, and 2) they can ensure that every product that returns for refurbishing is returned to its original device specifications. Both help curb waste in the supply chain, allow for uninterrupted product supply and ensure quality and reliability.
The second insight is as the healthcare industry aims toward zero waste, at some point, we recognize, a device will need to be taken out of service and recycled. The future holds vast promise for healthcare organizations that take initiative to lead in the recycling space and slow the waste stream down.
This is taking the field one step further, and is far from what some call “greenwashing.” That derogatory term implies that recycling just to feel good about recycling is the end in and of itself. When more and more players in the healthcare industry believe that sustainability initiatives make a difference is when we'll reach the critical mass necessary to make these functions business as usual. And it's beginning to happen in ways large and small.
One place is at the end of a device's useful life. We've partnered with a national recycler that works with more than 2,000 recycling companies across the country. Reclaiming the component parts of medical devices involves dissimilar materials, different grades of plastics, and volume conundra. In waste-to-energy facilities, plastics can still produce dioxins; we want to avoid replacing one environmental hazard with another. We continue to innovate to solve these issues, and are building out our capacity to streamline this process.
Working with such a large network of recyclers opens doors to new and innovative solutions for one day eliminating healthcare's contribution to the waste stream. As we scale our programs, we expect that more innovation will take root and flourish. In addition, our collaboration with these providers who are nationally known for their robust sustainability programs, allow for the sharing of ideas coming from caregivers on how to reclaim everything they touch, from sheets and drapes to more expensive items.
Medtronic is uniquely positioned to solve the waste problem through what we call “Triple R” – remanufacture, reprocess and recycle. With a deep understanding of device design, ability to control lots, service and analytics, Medtronic can optimize a healthcare facility's green initiatives while simultaneously driving risk out of the process.
Seth Masek is Senior Director of the Medtronic Sustainable Technologies Group.
Enhanced recovery after surgery (ERAS) is a multidimensional, evidence-based perioperative care pathway with the goal of early recovery after major surgery. The ERAS Society says enhanced recovery replaces traditional practices with evidence-based ones and covers “all areas of the patient’s journey through the surgical process”.
As part of the ERAS program at Inova Health System in Virginia, patients’ expectations for pain management and ambulation are established before surgery. “ERAS turns the spotlight on the most important part of the healthcare continuum—the patient’s recovery,” says Sandeep J. Khandhar, MD, FACS, Chief of Thoracic Surgery and Director of Inova’s Thoracic Oncology Program.
Despite the advantages, strategies such as very early ambulation require a big change in thinking and practice for many patients and clinicians. Understanding the principles of ERAS and how to implement it helps facilitate change and achieve optimal outcomes.
Focus on the patient
As strides have been made in minimally invasive techniques and other surgical technology, the focus of clinicians has too often shifted from the patient to the technique, the operation, and the success of the technology. “Technology is great—it’s phenomenal to see and sexy to talk about, but the danger is that technology and other advances can become the sole focus,” Khandhar says.
Instead, the goal should be for patients to have the procedure and return to their lives as quickly as possible. “ERAS returns the focus back on the most important goal—getting patients back to their lives,” Khandhar notes.
Build a multidisciplinary team
It takes a multidisciplinary team to make an enhanced recovery program successful. Such a team builds on the advantages of modern medical subspecialization. “Specialists can pick up the nuances and filter unnecessary details to differentiate one patient from another and provide the highest level of care,” Khandhar says. To leverage their expertise and broaden their view, specialists need to partner with others who have expertise in various aspects of care.
At Inova, each member of the team plays a vital role in the recovery of a patient. For example, preoperative and postoperative nursing teams prepare and recover patients with a unified focus. The surgical team’s familiarity with the disease processes and techniques is of paramount importance. Anesthesiologists plan the delivery of anesthesia based on the case and the expected timeframe for recovery. Respiratory therapists immediately engage the patients in the postanesthesia care unit to initiate appropriate therapies that facilitate a speedy recovery.
“Putting all these specialists together brings the best of every discipline to the forefront,” Khandhar says. An important feature of ERAS is that, as Khandhar says, “Everybody is in charge.” Each team member does his or her part and each discipline has a designated point person who team members can contact with issues or questions.
At Inova, the thoracic surgery division was the driver for starting such an initiative, but the ERAS leader does not have to be a surgeon. One can find leadership potential for an ERAS program in a nurse, physician assistant, nurse practitioner, anesthesiologist, or administrator. The key is to have a dedicated and respected leader with the ability to build an effective team. Communication and collaboration are key elements for success.
It’s not enough to assemble a team; the team has to truly be invested in the program. “Without buy-in from every discipline, it doesn’t work because each one is critical for success,” Khandhar says. Representatives from disciplines include perioperative staff, physician assistants, nurse practitioners, respiratory therapists, anesthesiologists, surgeons, administrators, and patients and their loved ones. The best strategy for obtaining buy-in is to set goals and expectations for all involved.
Achieving this goal safely and successfully requires effort throughout the perioperative continuum. Preoperative nurses, physician assistants, nurse practitioners, and surgeons prepare patients and families before surgery by telling them what to expect and prescribing specific activity requirements and goals. Anesthesia providers deliver anesthesia during surgery to ensure patients are awake and alert quickly after surgery, while thoracic surgeons use their technical expertise so patients experience the least possible trauma. Postoperative nurses ambulate patients safely, effectively manage pain and nausea, and work closely with the respiratory therapists to build back lung function immediately.
Administrators need to understand the resources necessary at every level to achieve results and will quickly see the fruits of this labor in the form of increased patient satisfaction, decreased complications, shorter lengths of stay, and increased volume and revenue.
Develop a culture
A culture that supports ERAS backs up goals and expectations. That culture starts with providing the necessary resources and having buy-in from every member of team from administrator to patient. For example, typically two nurses are needed when the patient first walks, but most postanesthesia care units have either one-to-one staffing or one nurse for two patients. With ERAS, resources must be allocated so that for a short time, two nurses can care for one patient.
Changing the culture is not easy. “As a group, medical professionals generally like to be tech savvy and up-to-date with the latest techniques, but practices tend to be somewhat static,” Khandhar says. Nurses and physicians who graduated years ago learned how to practice in a certain way that may not have changed to reflect newer developments. For example, Khandhar says that surgeons are “quick to evolve but that evolution is often limited to the operative technique. Somehow, as a group, we often forget the preoperative preparation and the postoperative follow-through.”
The ERAS culture is all about preparation and follow-through. It’s also about changing how clinicians—and patients—view postoperative recovery. Traditionally, patients rested after surgery as part of their recovery. ERAS turns that around with a philosophy of active recovery immediately after surgery.
“A recovery of resting doesn’t fit well into that paradigm of bringing patients back to the place they were before—leading an active life with family, work, play, and responsibility,” says Khandhar. Explaining this to clinicians, patients, and families helps to achieve culture change.
Enhanced recovery focuses on three main areas: pain management, fluid management, and early mobility. (See ERAS and pain management.)
ERAS and pain management
Pain is subjective and influenced by many factors, including culture, past experiences, and type of surgery. These factors—and varying pain thresholds—make it impossible to have a set dose of medicine to control pain.
Perhaps a bigger issue is attitude towards pain. “I think in a large part we have come to believe that pain is evil, and that we have to eradicate it,” Khandhar says. With ERAS he says, “Pain is not the enemy, and we simply refuse to focus on it.” The true enemy is complications, which, unlike pain, can kill patients. Treating pain with narcotics in an effort to achieve “no pain” can simply contribute to complications such as pneumonia by limiting the patient’s respiratory drive and ability to walk.
Patients need not suffer, however. Instead, they are told preoperatively to expect some pain and the reason why. The key is to set realistic expectations by saying that narcotics will be given judiciously, but pain is not the focus—optimal recovery and the avoidance of complications are the real endpoints. Once the culture has been established and team members experience success, practices will become embedded into the system.
Return patients to their lives
ERAS focuses on returning patients to their lives, where they can engage in activities they enjoy and spend time with family and friends. That focus aligns with one of clinicians’ primary goals—helping patients.
Sandeep Khandhar, M.D., is surgical director of thoracic oncology in the Inova Thoracic Oncology Program.
All healthcare providers share the same goal for patients undergoing surgery: a smooth recovery that returns patients to their daily lives as quickly as possible.
That’s why some providers have adopted an evidence-based perioperative care pathway called enhanced recovery after surgery (ERAS). By maintaining preoperative organ function and reducing the stress response to surgery, the main goal of ERAS is early recovery for patients following major surgery — a clear benefit for both patients and providers.
In a recent article published by OR Manager, I shared perspectives on successful implementation of an ERAS program. Here are four of the key factors:
Helping patients return to their lives faster is the greatest benefit of implementing an ERAS program. As healthcare providers, this is what we value most and why we come to work every day.
Donna Watson, Ph.D.(c), RN, MSN, CNOR is a global perioperative thought leader and is currently Director of Professional Societies & Patient Advocacy for Medtronic.
What if we knew a proven way to reduce healthcare costs and increase productivity in a large percentage of the American population? Shouldn’t every healthcare provider, employer and insurance company jump on the bandwagon to ensure as many people as possible take advantage?
In a recent study, Cost Comparison of RYGB Laparoscopic Surgery Cohort and a Matched Cohort in a Commercially Insured Population, Stanford University researchers compared the future healthcare costs of 823 patients suffering from obesity who underwent a laparoscopic weight loss procedure called Roux-en-Y gastric bypass (RYGB) in 2008 with 786 patients with obesity who did not have bariatric surgery.
Dramatic healthcare savings
The research team delved deep into the Truven Health Analytics Commercial Claims Database, mining healthcare claims information from approximately 15 million people. Some of the compelling findings include:
Tackling the barriers to adoption
There are still barriers to more widespread adoption of this surgery, even though it is a reliable tool for treating obesity and reducing the cost of treatment for obesity related comorbidities. These include:
This study clearly indicates how the health benefits of weight loss surgery translate into real, demonstrable economic benefits. The hope is that this type of data will help to improve access to bariatric surgery for patients everywhere who struggle with obesity.
Michael Morseon is Senior Director, Healthcare Economics, Surgical Innovations at Medtronic.
Bundled payments are the new trend in healthcare — but they’re hardly new.
For many years, we have collaborated with our provider partners as they’ve dipped their toes into this model.
We know that bundled payments can reduce the cost curve and improve quality of care. But thanks to a recent mandate by CMS, everyone has begun to take more notice. The CMS mandate on total knee and total hip replacements signals that market forces are going to drive business models from now on.
Our response to this change doesn’t start with a focus on the product, but rather with identifying the key problems facing a provider. We mine big data sets — including benchmark data from Medicare and private payers — and do deep dives into the provider’s own data to wrap a solution around the biggest pain points.
We help providers identify problems and spot opportunities, with root-cause analyses and detailed research. This lets us customize products and services to specific needs, service lines and desired outcomes.
For example, in an orthopedic service line, we can study patient outcomes and pinpoint unexplained variation, finding where we can improve quality. Perhaps it’s as simple as standardizing supplies in the OR. Maybe our analysis can help determine which opioids are causing complications. Recommending a specific respiratory monitoring device or compression after surgery can also mean better outcomes, particularly combined with customized protocols for discharge planning and coordination with post-acute care providers.
A medical device company should be more than just a supplier — your partners should provide services that let patients complete their journey to wellness safely, effectively and efficiently.
The era of value-based healthcare is an approaching tidal wave — we all need partners with the experience and knowledge to make bundled payments work for providers and patients.
Jenifer Levinson is Vice President of Health Policy, Reimbursement and Payer Solutions for the Minimally Invasive Therapies Group at Medtronic.
Today’s healthcare consumer craves information. If they need a surgical procedure, they want to know everything about the underlying disease state and how surgery might help them manage it. As a provider, you want to be the primary source of accurate and timely medical information for your patients. But developing robust educational content for patients can be time-consuming and expensive.
Luckily, reliable patient-centric educational content can be sourced through partnerships. For instance, medical device companies – aiming to increase disease state awareness and utilization of associated therapies – continuously invest in creating patient-centered educational content. By partnering with your suppliers on patient education materials, you can help your patients take a more active role in managing their care.
Here are a few benefits of leveraging educational materials from industry:
In short, partnering with industry to educate patients and drive disease state awareness can be a win-win for you and for your patients.
James Boye-Doe is a senior healthcare marketing leader and growth strategist, with over 15 years of experience in marketing and technology leadership roles with category-leading organizations in the healthcare, SaaS and data networking industries. Currently serving as Director, Head of US Therapy Marketing for the Minimally Invasive Therapies Group (MITG) of Medtronic, he is responsible for leading the charge to establish specialty growth platforms that increase access to care, improve patient outcomes and drive increased therapy utilization in focus disease states.
When we implemented a cost, quality, outcomes (CQO) initiative throughout our organization, we learned a tremendous amount about how to foster consensus among stakeholders — a critical component of any successful CQO roll-out. But three steps stand out on our journey to success:
1. Keep the patient at the center.
In supply chain management, it’s easy to see only the materials. But those materials relate to patients. When we put the patient at the center of our CQO initiative, we were able to visualize everyone across the organization involved in patient care: physicians, clinicians, supply chain, administrators and others. All of these stakeholders need to be involved in the CQO dialogue because it won’t succeed without everyone’s buy-in and participation.
2. Find out what’s important to the clinicians.
Physicians’ top priority is patient care. In order to foster physician engagement with CQO initiatives, we took the time to get their point of view regarding clinical outcomes for various service lines. This sounds like an obvious step, but so often organizations present performance improvement initiatives to clinicians without engaging them in the process. CQO won’t work well if physicians and other clinicians don’t feel involved, or if they feel plans are being forced upon them without their input.
3. Assemble high-quality data related to outcomes.
Once we understood the clinicians’ viewpoints on patient care, we were able to assemble high-quality information on supply costs relative to clinical outcomes. We took that data to our clinical stakeholders so they could review costs and work with us to create opportunities to maximize both clinical and financial outcomes with our patients.
By involving clinicians early in the CQO process, we have been able to more effectively deploy performance improvement initiatives across our organization. We learned that when everyone pulls together, we can create a great patient experience that also meets our financial goals.
As Vice President, Supply Chain Transformation, for BJC HealthCare, Nancy LeMaster is responsible for creating the strategic vision and implementing solutions that will allow the organization to achieve its SupplyPlus mission of providing superior outcomes plus better value.
When a new medical technology hits the market, physicians in health systems and hospitals may request to obtain the item, no matter the expense. However, organizations may be reluctant to become "early adopters" of new medical technologies due to the financial risk involved. Shouldn’t an institution wait to invest in a technology until it is proven to deliver the financial and clinical outcomes claimed by the supplier?
Enter the Risk-Sharing Contract
The term “risk-sharing” has surfaced in the healthcare industry over the past few years, but what does it mean? In fact, there is no universal definition of this term. For our purposes, “risk-sharing contract” refers to a non-traditional method of assigning value in a transaction. With risk-sharing contracts, clinical and/or economic outcomes are measured and agreed upon prior to signing the contract, and payment is dependent on meeting the agreed-upon measures.
Risk-Sharing Contracts Benefit Organizations
These contracts can benefit healthcare providers in two key ways:
Risk-sharing contracts make it possible for organizations to lead their community in adopting new medical technologies while protecting their financial position and potentially enhancing their outcomes.
How is your organization approaching risk-sharing partnerships with suppliers? What benefits and learnings can you share?
Mike LaCasse is the US Vice President of Strategic Partnership Solutions for the Medtronic Minimally Invasive Therapies Group based in New Haven, CT. Mike has held a number of sales leadership positions during his 19 year career at Medtronic. In his current role Mike and his team oversee strategic relationships with IDNs. In addition to contracting, his team is tasked with providing solutions that expand beyond product and price to the provider community.
Payers often grapple with the nuances of meeting economic goals without sacrificing patient outcomes. Patient health and safety is the top consideration of any healthcare system, but no one has unlimited financial resources. Fortunately, small changes in surgical approach can save money and improve clinical outcomes.
A pioneering study conducted by Milliman, Inc., and published in Managed Care magazine analyzed the differences in payer costs between minimally invasive surgery (MIS) and open surgery in a commercial population — so far, most studies have compared total hospital costs or operative costs. The study concluded that MIS procedures cost less for four common surgeries: colectomy, hysterectomy, ventral hernia repair and thoracic resection of the lung.
The review of more than 46,000 cases revealed cost savings in the thousands of dollars for several of the procedures. The authors demonstrated further cost savings over the 30-day post-operative period. This study suggests you can reach economic goals and outcomes by facilitating a mindset shift away from open surgeries to MIS, when an open procedure is not medically necessary (such as in the event of invasive tumors).
MIS linked to better clinical outcomes
A considerable volume of literature correlates the MIS approach to improved clinical outcomes. Specifically, MIS generally corresponds with shorter inpatient stays —especially in intensive care— lower rates of surgical site infections and re-hospitalizations, diminished surgical site pain, and a quicker return to work. Healthcare organizations can promote all of these patient benefits when they advocate for MIS approaches.
Real numbers, real savings
Let’s talk real numbers. The Milliman study offered these possible cost savings associated with MIS for common procedures:
These cost savings include “professional, facility and costs incurred 30 days after surgery,” according to the study’s authors. The study validates the fact that cost savings do not have to come at the expense of excellent clinical outcomes.
What are your experiences with minimally invasive techniques vs. open surgery? Has your organization evaluated the clinical and financial opportunities? Tell us in the comments field below.
Michael Morseon is currently Senior Director, Healthcare Economics, Policy and Reimbursement for Medtronic.
Standardizing surgical supplies can lead to big cost benefits for hospitals, but that doesn’t mean your surgeons will be on board with the process. Surgeons tend to get attached to certain products — I know this because I am one — and they may resist changing their preferences. Here are some tips for obtaining surgeon buy-in for standardization.
Standardization holds many benefits for both surgeons and hospitals, but physician engagement probably holds the key to successfully streamlining the surgical supply chain.
Curtis Bower, M.D., is a general surgeon specializing in minimally invasive surgery techniques. He is currently the General Surgery Section Chief at Carilion Clinic in Roanoke, Virginia, and has been practicing since 2006.
As healthcare providers continue to take on additional risk, they are looking for partners who not only understand their new reality, but are also willing to share risk. This new reality requires providers to shift their focus to creating a positive patient experience, reducing cost and meeting all quality and safety metrics. To help providers reach their goals, forward-thinking suppliers already have (or are in the process of) implementing risk-sharing contracts.
How do we structure our risk-sharing partnerships? One way is through a bundled payments strategy. There are 48 bundles that the Centers for Medicare and Medicaid Services (CMS) has identified initially for payment. We start there, and identify multiple baseline metrics for a certain bundle or disease state, such as:
This helps us standardize our approach per hospital or system. Then, we work with institutions around surgical determination – open or minimally invasive – through a clinical, operational and financial education perspective. We can also collaborate with the institution to provide kits containing products that would be utilized for the specific procedure and identify ways to create a standardized approach from pre- to post-surgical care.
Through evidence-based medicine, we learn together how to get patients back to a healthy state, reducing complications, length of stay and possible readmissions. The metrics are where the risk sharing comes into play. From the baseline metrics established at the beginning, we set goals around generating improvements through our services and solutions. Some of those services and solutions could be worth a certain amount in a fee-for-service world, but if we risk share and tie into an episode of care, we will share in those savings with the provider.
Continuous improvement and sustainability requires close monitoring of the results. Our team partners with the hospitals and provides them with ongoing dashboards that allow us to follow the results and create a sustainable approach to value-based care.
Risk-sharing is a journey on which the provider and suppliers are just embarking. What would an ideal risk-sharing partnership look like for your organization?
Julie Blatnik is currently Senior Director, Clinical Performance Improvement for Healthcare Economics, Policy and Reimbursement at Medtronic.
When it comes to supply chain in hospitals, there is a lot of talk about cost control and price negotiations. But as I wrote in an earlier post, the conversation is changing due to forward-thinking providers who are shifting the nature of their vendor relationships away from price negotiation and toward partnership models that produce mutually-beneficial outcomes.
For instance, supply chain vendors have long helped hospitals advance their clinical capabilities through customer support, but that support has typically started and ended with clinical education. More advanced partnerships, on the other hand, are bringing to the table human resources as part of an extended clinical team: project managers, nurses dedicated to clinical performance improvement and biostatisticians who help interpret data and incorporate it into the everyday workflow of clinical team members. Such resources are helping providers drastically expand their knowledge and capabilities without taking on additional full-time employees.
Advanced partnerships are also helping providers focus, at a time when multiple priorities compete for attention. Instead of trying to improve all areas at once, vendors are helping providers be more deliberate by using data to improve on cost and quality variance in specific service lines. Our philosophy is to focus on the few trouble areas first, and apply those processes and learnings to other service lines.
As with any advanced partnership where both sides are engrained in each other's workflow, there is a level of trust and transparency that must exist. There also is commitment to adaptability, so both sides can learn from each other and work together to produce the best outcomes.
How are you advancing relationships with suppliers? What would an ideal advanced relationship look like, in your opinion? Tell us in the comments below.
As Director of Provider Solutions, Kevin Freeman is responsible for overseeing the implementation of value-added programs and services for health systems for Medtronic.
Risk-sharing partnerships are becoming more prevalent in healthcare. As providers focus more on outcomes and take on financial risk, they're looking for strategic partners to help fulfill their missions of providing better care at lower costs. But how do you start this conversation with leaders inside your hospital, and with suppliers who are accustomed to more transactional relationships? Here are five key factors to have a successful conversation.
Pop the question. Start by asking directly, "What type of shared risk agreements have you implemented to help your customers transition from a fee-for-service model to value-based reimbursement models that are becoming more prevalent?" If they come back empty-handed, tell them that suppliers who will align their incentives with your goals are going to win your business. Even if you risk tearing apart the portfolio you have with a supplier--if you can garner savings and align outcomes to project savings, the ultimatum is worth it.
Define "risk." Once they come back to you with a plan, be prepared to talk through possible scenarios. It's important to settle on a definition of risk. Is it outcomes-based risk sharing? Is it shared savings? Is it committing business for improved savings or quality? Define what risk means to both parties. Is it between the supplier and the provider? Is it between the provider and the payer? And so forth.
Bring the intelligence. Know the procedures at your organization that are high in cost, highly variable in outcomes or high volume. Bring some basic cost and quality data around those procedures to have a productive conversation.
Prepare as a team. Since this conversation is about much more than line-item costs, leaders who are involved in moving the organization to a value-based environment should be included in the conversation. The five key areas of representation include finance, supply chain, clinical, IT and C-suite management.
Discuss the implementation. It's very important to ask, "How do you operationally implement the concept?" Many suppliers want to talk about risk-sharing up to the point of operationalizing the plan, but very few have really got beyond that point.
Has your team successfully implemented risk-sharing partnerships? Tell us your success stories in the comments field!
As Director of Provider Solutions, Kevin is responsible for overseeing the implementation of value-added programs and services for health systems.
Electrosurgery has developed into an invaluable and reliable surgical tool. Electrosurgery units (ESU) and their accessories are becoming increasingly sophisticated, yet one of the basic tenets of electrosurgery will never change — protect the patient from harm.
“Safety is a top priority as electrosurgery continues to develop,” says Cherie Loeffler, RN, CNOR, manager of the Covidien Clinical Hotline. “Technology is constantly changing, and perioperative nurses are under a lot of pressure to keep up with these changes to ensure patient safety.”
To stay on top of the curve, perioperative nurses need to use assessment and critical thinking skills and access the right resources. You need to consider numerous factors to keep patients safe when electrosurgery is used. There are also many services available to help you and your surgical team deliver the best electrosurgical care, according to Loeffler.
Determine optimal PRE placement
An important role of the perioperative nurse is to choose the proper patient return electrode (PRE) and place it correctly, Loeffler says. First, pick the appropriate size for the adult, pediatric, or neonatal patient.
Finding a safe site for the PRE can be challenging under certain circumstances. Ideally, the site is a well-vascularized, large, convex muscle mass near the surgical site. The PRE should not be placed so close to the surgical area that fluids or blood compromise the pad.
Placement of PREs should also be avoided in these areas:
Body piercings and electrosurgery
Trendy and unusual body piercings are becoming more common and can be a challenging safety concern during electrosurgery. It is important to ensure the piercing is not within the electrosurgical circuit, because that can lead to a variety of risk factors such as direct coupling should the active electrode come into direct contact with the jewelry item, inadvertent contact with the deactivated electrode tip that can remain hot after activation, and heat transfer due to leakage current escaping from the active cord if in contact with the jewelry. Other concerns are the risk of infection from microorganisms, the constricting nature of some jewelry, and the possibility of jewelry getting caught up in linens, drapes and cords.
Simple body piercings can be easily removed with the correct tools, but microdermal piercings or anchors are far more difficult. These types of piercings are similar to an old-fashioned tie tack. A small plate or anchor is implanted under the skin with a step that protrudes to the surface for securing the interchangeable jewelry.
Begin by asking patients early in the process about body piercings so they can be removed before the day of surgery, advises Cherie Loeffler, RN, CNOR, manager of the Covidien-Medtronic Clinical Hotline.
“Be aware that patients may fail to mention certain piercings,” she says. “For example, a patient may not mention a piercing in the perineal area, but it quickly becomes an issue if a vaginal procedure is planned.”
If surgery must proceed with piercings in place, it’s important to use isolated generator technology, she adds.
Ensure good electrode contact
Another way to protect the patient is to use a return electrode monitoring (REM™) pad, or split pad. This device connects to an ESU with a contact quality monitoring (CQM) system.
“CQM technology monitors the pad-to-patient interface,” says Loeffler. “If the pad is compromised, such as peeling off due to patient diaphoresis, an alarm will sound.” The ESU will also stop delivery of current until the problem is corrected.
Consider safety features
It is important to consider safety features when purchasing electrosurgery equipment, according to Loeffler. Examples include:
An example is the ability to accommodate bipolar accessories used for transurethral resection of the prostate (TURP). Bipolar is considered safer than traditional monopolar resection because a PRE isn’t required and lower voltages are used.
Loeffler also recommends investigating all the safety advantages a technology offers.
Consider monopolar electrosurgery. Surgeons can use this technology to improve safety when coagulation is needed to control diffuse bleeding due to multiple organ trauma, such as a lacerated liver and spleen.
“Coagulation is often associated with high voltage, but we now help the surgeon reduce high voltage use by having feedback technology based on the type of tissue,” says Loeffler.
The ESU makes adjustments several thousand times per second. When the tissue is higher in impedance, the generator delivers the higher voltage required. It reduces voltage when the surgeon is working on a section of tissue that is lower in impedance. This tissue-sensing technology allows for the use of lower power settings in all modes compared to previous technologies, according to Loeffler.
Make resources accessible
It is easy to become overwhelmed by a wealth of manuals and instructions for electrosurgery devices. Loeffler offers these tips for keeping important information assessable:
Got questions? Help on the hotline
Help with questions related to electrosurgical safety is just a phone call away. The Covidien Medtronic Clinical Hotline team can give you the answers you need 24/7 to support the perioperative staff in protecting their patients and accessing electrosurgery safety programs through their trained sales professionals.
“We offer several services, including troubleshooting equipment and sterilization guidelines for our products,” says Cherie Loeffler, RN, CNOR, manager of the hotline. “We can also help new users with set up.”
Hotline team members answer questions about safety and offer evidence-based practice guidelines for common concerns, such as:
“We use the AORN guidelines for perioperative practice and have extensive knowledge of electrosurgery products sold by Covidien, as well as its competitors,” says Loeffler. “If we don’t know the answer, we’ll find it and get back to the customer in a timely manner, usually the same day.”
Contact the Medtronic Medtronic Clinical Hotline number at 800-255-8522, option 1. or email at Valleylab.email@example.com.
Armed with good resources, Loeffler believes perioperative nurses can tackle the challenges of keeping patients safe as electrosurgery technology evolves.
“Our surgical patients can continue to rely on us to be their advocate during their time of vulnerability while in the OR,” she says.
Patient engagement is a top priority for both health systems and health plans in population health management. This is defined as the ability for an individual to understand his/her role in the healthcare process, while also employing the knowledge, skill and confidence to take action. According to a study published in Health Affairs, increased levels of patient engagement can improve outcomes as well as lower healthcare costs. So how can health systems and health plans increase patient engagement?
The challenge is giving patients the right information at the right time, through the right channels to increase awareness and thought process about their treatment. Let’s use minimally invasive surgery (MIS) as an example. Despite its numerous advantages, including lower costs and shorter patient hospital stays*, minimally invasive surgery is widely under-utilized in the United States, as we shared in a recent post. As a result, when patients are recommended for surgery, they are sometimes unaware that a minimally invasive approach may be a viable option.
Increasing patient engagement around treatment options like MIS requires collaboration between multiple key stakeholders including health systems, payers and industry partners. In a recent pilot program, we worked with UnitedHealthcare to increase awareness around MIS clinical pathways, and in turn, improve clinical, economic, and workplace productivity outcomes. This partnership began during a meeting with UnitedHealthcare’s senior leadership when they asked what our organization was doing to help our own employees understand the benefits of minimally invasive surgery. After a collaborative dialogue, a first of its kind pilot was born: The MIS Education Program.
The MIS Education Program introduced an animated e-learning experience for patients who were recommended for one of nine common surgeries where both open surgery and MIS are performed. The experience was designed to encourage better patient/physician dialogue. Each qualified patient who completed the e-learning experience had the opportunity to review why a surgery was performed, how open and laparoscopic surgeries are different, and what to expect.
The results of this treatment decision support pilot for the test group were impressive:
In addition, patients experienced improved clinical outcomes and there was an estimated $250,000 to $300,000 in annual savings resulting from reduced healthcare expenditures as well as reduced lost work time from work (wages). And, that is just for this group of 8,000 employees and their eligible dependents. This program is being expanded to UnitedHealthcare and Optum members. Large self-funded hospital systems are also exploring the program for application with their employees/and or patients. Alignment of all key stakeholders in the healthcare delivery system is the true catalyst for meaningful change in this value-based healthcare environment.
Linda Richetelli-Pepe is the Senior Director of Payer Solutions Healthcare Economics, Policy and Reimbursement for Medtronic.
*Medtronic/Milliman Analysis: Truven Healthcare MarketScan Database: 2011-2012 data; performed 2015.
What is the definition of value in healthcare? In a previous post, we talked about how the U.S. healthcare system is transitioning from a fee-for-service to a pay-for-performance system. Central to this transition is the concept of value in healthcare. To expand on this, we recently discussed the evolving healthcare landscape with a panel of healthcare providers; we specifically asked how their organizations are changing their approach to delivering value to the communities they serve. These panelists delivered a wealth of strategies for serving patients and communities effectively under the new value-based business paradigm. Here are a few key takeaways:
1. Understand the new, lean context of healthcare delivery
Dr. William Mayfield, Chief Surgical Officer at WellStar Health System, discussed how the rapid acceleration of surgical expenses combined with the reduction in reimbursements by the government and private payers has put downward pressure on hospital profit margins. Given that surgical services traditionally have driven profitability in healthcare systems, this is a new challenge for providers who are now forced to change how they partner with suppliers. During the panel, we discussed how other health systems are evolving to meet this challenge.
2. Value in healthcare is about the patient
Betty Jo Rocchio, Vice President of Perioperative Performance Acceleration at Mercy Health, defined value as providing the best outcomes for the patient at the lowest possible cost. To reflect this, her institution has moved away from a supply focus toward patient needs and outcomes.
Roccio looks for suppliers who demonstrate how they can help Mercy make better value decisions. Suppliers who understand how to help clients increase value – in whatever way the individual hospital or health system defines that term – will be considered true partners in delivering high-quality healthcare.
3. Scrap the transactional view of supply chain management
The evolving partnership between health systems and suppliers is no longer solely focused on products and sales transactions. “It’s about the right supply at the right time for the right patient in the right context,” Rocchio said. Providers need to set aside the old concept of “buy more” for less in favor of forging valuable relationships with suppliers that help them meet their supply chain needs in a new, more precise way.
Although this value-focused partnership between healthcare systems and suppliers is still in its early days, our recent panel discussion shows willingness from both the provider and supplier side to work together to provide better value to patients.
James Boye-Doe is a senior healthcare marketing leader and growth strategist, with over 15 years of experience in marketing and technology leadership roles with category-leading organizations in the healthcare, SaaS and data networking industries. Currently serving as Director, Head of US Specialty Marketing for the Minimally Invasive Therapies Group (MITG) of Medtronic, he is responsible for leading the charge to establish specialty growth platforms that increase access to care, improve patient outcomes and drive sustainable procedure growth in focus disease states.
Almost every topic in healthcare today is covered from the "value" angle. The entire U.S. healthcare system is transitioning to a value-based system; physicians will be paid on "value" instead of volume; and hospitals and other healthcare providers will be judged on the "value" they provide.
But what is the definition of "value"? This is a question that is, consciously or not, being examined by everyone affected by the healthcare industry today.
Renowned health economist Michael Porter from the Harvard Business School has defined healthcare value as "health outcomes achieved per dollar spent." That simple definition makes perfect sense, but also prompts dozens of complicated questions for those who seek to achieve it.
From the supply chain's perspective, the old way of determining value was product quality and price. The new way is more focused on the patient -- how a product advances patient safety and affects desired outcomes, for example. Another question is, from whose perspective will value be ultimately defined -- the payer, the provider or the patient? Patients are often focused on their quality of life, not on the quality of care provided, or the cost it took to get them there. Will "value" mean something different for each individual patient?
Healthcare policy expert David Blumenthal asks this question in his fantastic blog post on healthcare value. He writes that a universal definition is fundamentally necessary for the industry to move forward -- otherwise, it will be pulled in several directions vying to achieve different definitions of value. To note:
"To turn the promise of value measurement into the reality of better care at lower cost, a few short-term actions seem prudent. First, the nation needs a plan to turn the concept of value into practical indicators. Since government, the private sector, consumers and voters all have a vital stake in health system improvement, they should all participate in a process of perfecting and implementing value measures, preferably under the leadership of a respected, disinterested institution."
Blumenthal suggests the Institute of Medicine as the deciding body. Historically, the FDA has decided value for medical devices and pharma.
Regardless of who decides or how it is decided, the consensus seems to be that a decision just needs to be made.
What are your thoughts on "value" as it relates to healthcare? Do you agree with Blumenthal? Share your comments below.