SPECIAL FOCUS Value management holds the
‘full house in healthcare poker’ Supply Chain, Value pros serve as clinical economists, facilitators under value-based care by Rick Dana Barlow
whether a device will bring value to their organization in terms of patient outcomes and cost effectiveness. This plays some not-so-well-acknowledged role in the whole “value-based care” move- ment, which really hasn’t been applied clearly and directly to the supply chain profession and vice versa. But is that enough?
T
Absolutely not, noted Barbara Strain, Director, Value Management, University of Virginia Health System. “If providers are not look- ing at the whole value-based purchasing (VBP) gestalt they may be caught by sur- prise wondering where they went wrong when their re- admission rate, for instance,
oo often, value analysis and value management teams seem to focus on product evaluation — arguably
it Big Data or the term du jour. If you’re not measuring it you’re not mastering it.” Who is examining product life cycles on the shelf?
“Depending on where you are sitting this
could mean product turns to assure efficiency of supply chain processes as well as avoiding waste due to expired product,” Strain contin- ued. “If you sit in a clinical seat it could mean the differences in use between low, medium or premium products, such as implants, or it could mean the same product line from the same supplier that have been in use for — name your period of time — without regard to market shifts.” What about usage patterns among clinicians?
Barbara Strain
does not maintain a position lower than the expected,” Strain told Healthcare Purchasing News. “The ultimate balance is to maintain financial stability while providing consistent patient care. Consistent is a deliberate term describing an individual’s care across the health continuum. If a provider develops its network in a way to minimize use of in-hospital services and provides a healthy environment for those covered lives under its care, everyone wins.”
Essentially, this balance can be accom- plished and the knowledge as an outgrowth of achieving these relationships can influence supply chain management, value analysis and value management processes, accord- ing to Strain.
For example, who is looking at the pay- backs on what’s already in place? “Through well-established relationships with Finance, Quality and Information Technology, Supply Chain and value profes- sionals should be asking where are we now, where are we going and where do we need to be?” Strain said. “Directional and actionable data is the full house of healthcare poker. Call
“This may sound like the easiest metric to produce while it is the hardest to determine,” Strain noted. “If supply chain is not included in the patient charge and supply use conver- sation then its method of inventory manage- ment or documentation may not be adequate to provide the numerators or denominators required.”
What about IT connectivity? “Meaningful Use (MU) any one?” Strain
countered. “Understanding the CMS Regulations and Guidelines across provider organizations will go a long way to assure that they are not only complying with the tenets of MU but developing a seamless con- ductivity of data throughout their systems eliminating waste along the way.” What about equipment? And services, such as diagnostic imaging, kit-and-pack assem- bly, laboratory and sterile processing? How much value do they bring by performing them in-house when compared to outsourc- ing to a consolidated service center or third- party service company? And what about products and services that extend beyond the hospital’s four walls and into the nonacute and outpatient settings?
“If supply chain and value professionals
have not been addressing these significant opportunities over the past five years they can start a happy dance in the cost savings
10 June 2016 • HEALTHCARE PURCHASING NEWS •
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prom,” Strain said. “Make or buy has long been the mantra as a business strategy and healthcare is no exception. Take the labora- tory, for instance, which uses their expertise to determine if a new cutting edge test should be done in house or sent to a reference labo- ratory. Some of the key characteristics are, but not limited to, test volumes, frequency, expertise, reimbursement, equipment, test capacity/space, turnaround time leading to patient treatment/outcomes and cost to the lab, institution and patient. These same methodologies can be applied to areas other than the laboratory simply by changing the characteristics to best match the situation, such as cancer therapies, interventional procedures, pediatric emergency services, transplantation programs.”
In short, value management, per se, shouldn’t be limited solely to the beginning, middle or end of the so-called “value chain.” Clinicians need their devices, equipment
and products to deliver patient care, for sure, but they also need a business-minded clinical adviser, powered by information with evidence and outcomes data to support performance-based improvement. Have we progressed that far yet? Experts note that it depends on how you distinguish between value analysis and management.
Analysis vs. management Dee Donatelli, Director, Healthcare, Navigant, and Past President, Association of Healthcare Value Analysis Professionals, minced no words about overt and covert differences and similarities. “Value analysis is a noun,” she said. “It is the systematic and critical assessment by an organization of every feature of a product to ensure that its cost is no greater than is necessary to carry out its functions.” Donatelli then quoted the Institute of Value Management to distinguish value manage- ment as being “concerned with improving and sustaining a desirable balance between
Dee Donatelli
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