6-th-bohman - streamlining value analysis presentation 10.15.14.pptx · 2018-04-03 ·...
TRANSCRIPT
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Streamlining Value Analysis: Accelerating Savings in the Face of Reform through
Process Evolution and Redesign
Courtney Bohman, MHA, BSN GPO Lead Service Line Director LHP Hospital Group Plano, Texas
Who is LHP? } Company Overview & Joint Venture Model
Supply Chain Overview
} Organizational Chart } LHP Company Timeline } Corporate Supply Chain Functions & Obstacles
Value Analysis Best Practice Committee & Structure
} Committees & Memberships } Committee Documents
Committee Process, Strategy & Reporting
} Mission & Vision } Supply Chain Cost Savings Goals & Tracking } Value Analysis Process Flow ◦ Version 1.0 reviewed (2013) ◦ Version 2.0 implemented (2014) ◦ Version 3.0 in progress
Sustaining Success
} Executive Leadership Support
www.lhphospitalgroup.com
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LHP Hospital Group Ø Company started in 2008 Ø Privately held company Ø For-‐ProVit healthcare group Ø Currently 6 Hospitals
Ø Acquisition mode Joint Venture Partnership q Percentage of Ownership q Board of Trustees Representation q Capital Investment q Hospital Name q Payer Mix Shared Contracting
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Operations/Contracts
q GPO Relationship Management • LOC Tier Designation & Signature
q Savings/Rebate Tracking q Contract Compliance Tracking q Performance Metrics ◦ Distribution: Days Sales Outstanding (DSO), Fill Rates, etc.
◦ EDI: 3 Way Contract Match, PO History, % EDI Orders, etc.
q Distribution Relationship Management
q Contract Negotiations
Value Analysis
q Best Practice Committee facilitation • Strategic focus on committee initiatives based on MedAssets contract activity
q System standardization ⟶ Standardized item master q Executive/Physician/End User relationship management
• Clinical Oversight Committee • Executive Oversight Committee
q Vendor management – Corporate/National Accounts q New Product Request research & review
◦ Facilitate committee discussion q Contract Negotiations
} 6 Separate Item Masters and Charge Master ◦ No Unique Item Numbers ◦ No Centralized Purchasing
} 3 Different Materials Management Information Systems (MMIS) ◦ 5 Hospitals on same system but are not connected as a system ⟶ Really 6 systems! ◦ All systems are antiquated
} 2 EDI Vendors ◦ No Transaction management visibility for non-‐MedAssets hospital (MMIS compatibility)
} Lack of data integrity ◦ No standard Item Numbers, Nomenclature, etc.
} Geographic diversity of hospitals ◦ 6 Groups of End Users ◦ 6 Groups of Vendor Representatives ⟶ Requires National/Corporate Account involvement ◦ 6 Groups of Relationships
} Estimated FY savings potential based on limited product mix and Zinancial information
“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” – Martin Luther King Jr.
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Executive Oversight Committee
(Hospital CEO, CFO & CNO)
Clinical Oversight Committee
(Hospital Surgeon Representation)
Perioperative Services
Specialty Nursing Products
Diagnostic Services
Pharmacy Services
Laboratory Services
Critical Care
General Nursing
Cardio-‐vascular
Radio-‐logy
} Membership Packet ◦ Annual Acknowledgement Signature Required
} ConZlict of Interest Form ◦ Annual Completion Required
} Process Flow Chart ◦ Inclusive of Procured Health
} New Product Request Form >$5K annual spend
} New Product Approval Form <$5K annual spend; Director approval
} Clinical Evaluation Form ◦ Multiple examples ◦ Piloting Procured Health
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} Member List } Committee Charter } Mission & Vision } Committee Purpose } Standardization Initiative Outline ◦ Purpose of Standardization ◦ Keys to Successful Standardization ◦ BeneVits of Standardization ◦ Standardization Process Model
} Committee Expectations ◦ Duties & Responsibilities
} Acknowledgement Signature Page
The Value Analysis Best Practice Committee (VAC) is charged with establishing and subsequently following procedures
through which New Supply Items
Standardization Initiatives and Cost Savings Opportunities
are evaluated for inclusion in the supply formulary. The committee will be responsible for reviewing all new product
request valued at greater than $5,000 annually. The multidisciplinary committee is led by LHP Value Analysis, and includes input from the end users and clinical expertise at
each facility.
Participation on the VAC is by appointment. Representatives from the associated departments will be appointed by the
nominated Committee Chair or the Director of Value Analysis. Ad Hoc representatives can be requested on a per meeting basis.
Committee Membership: } LHP Value Analysis Director – Facilitator } LHP Administration } Hospital Voting Member – Clinical End User
◦ Nominated Chair for each Committee
} Hospital Non-‐Voting Member – Materials Management } Ad Hoc Member (as required)
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Clinical End User Member Ø Voting Member Ø All Votes Considered Equal
Voting Standards & Requirements Ø 83% of Voting Membership must be present
Ø 5 of 6 hospitals Ø Majority Vote will constitute a decision Ø Tie Breaker – LHP Administration Member Ø Increased Supply Expense Initiatives
Ø Executive Oversight Committee Vinal approval
The LHP Value Analysis Department's mission is to facilitate the decisions recommended by various Best Practice Committees and Task Forces established to apply the Value Analysis Process to the daily practices of the hospital group. In most cases, standing committee's will be the primary forum for introducing new products to the supply chain formulary. The Corporate Supply Chain team will communicate the recommendations and outcomes from the established forums to the Senior Leadership Team, whose expectations shall include, but are not limited to: • Demonstrating creative approaches to lowering overall logistic expense • Maintaining a high quality standard of patient care and safety • Improving the effectiveness and efViciency of each outcome • Improving end-‐user satisfaction • Increasing clinical quality satisfaction • Reducing unit costs • Reducing inventory • Reducing product waste • Driving standardization • Monitoring utilization rates and appropriateness of supplies and equipment
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With an increasingly competitive healthcare market and continuous focus on cost containment, it is imperative that LHP initiate value analysis methods through a Value Analysis Program to maintain our position as a low cost, high quality healthcare provider. The Value Analysis Program's vision is to
“Reduce costs and improve performance through cost-‐effective
utilization and standardization of products, services, and equipment, or related processes while maintaining the upmost quality of patient
care".
Committee
TOTAL FY13 Savings Goal
by Committee YTD Annualized
Savings YTD Savings Goal
Attainment
Perioperative Services $1,785,000 $2,331,480 131%
Cardiovascular Services $2,295,000 $1,752,496 76%
Radiology Services
Laboratory Services $255,000 $309,725 121%
Specialty Nursing Products $765,000 $104,075 14%
Pharmacy $900,000 $1,240,150 138%
Total Savings Goal $6,000,000 $5,737,926 96%
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} GPO LOC Signatures ◦ At System and at Hospital Level ◦ 156 Signed in 2013 Estimated Annualized Savings of $1,015,000
} Rebates ◦ FY13 Goal -‐ $860,000 ◦ Actual Rebates Received -‐ $1,762,239
Committee % of Total Goal
TOTAL FY14 Savings Goal by Committee
Perioperative Services 40% $2,249,200
Diagnostics Services 25% $1,405,750
Laboratory Services 10% $562,300
Specialty Nursing Products 15% $843,450
Pharmacy 10% $562,300
Total Savings Goal $5,623,000
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This is only a reZlection of the initiatives completed by the Best Practice Committees through the end of August.
Version 3.0 will explain why the shortfall at this point in the year!
Additional savings & rebates have been achieved and are
reported in the monthly savings/rebate tracker.
Committee
TOTAL FY14 Savings Goals by
Committee YTD SavingsYTD Savings Goal
AttainmentPerioperative Services 2,249,200$ 627,874$ 28%Diagnostics Services 1,405,750$ 282,296$ 20%Laboratory Services 562,300$ 614,985$ 109%Specialty Nursing Products 843,450$ 299,926$ 36%Pharmacy 562,300$ -‐$ 0%Total Supply Savings Goal 5,623,000$ 1,825,081$ 32%
§ Realized vs. Annualized Savings ⤵ § Realized is based on month initiative was implemented § Annualized is estimated annual initiative savings
§ Savings by Category § Products/Services, Pharmacy & Capital § Rebates
§ Supply Chain Scorecard ⟶ PROCURED HEALTH COMPLIANCE (NEW PRODUCT REQUEST)
SUSTAINABILITY/REPROCESSINGOPTIFREIGHT
SUPPLY CHAIN KEY SAVINGS DRIVERS ON TARGET NEEDS ATTENTION OFF TARGETPRODUCT CONVERSIONS/STANDARDIZATION
$1,830,494
$2,192,796
$2,923,960
$-‐
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
2014 REALIZED YTD 2014 TOTAL WITH PULL THRU 2014 GOAL
$502,703
$633,681
$-‐
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
REBATES 2013 REBATE TOTAL
} Review new product request } Standardization of product categories } Strategic work plan development ◦ GPO contract work plan ◦ LHP Internal strategic plan
} Vendor management ◦ LOC Management ◦ Price Parity
} Distribution channel management
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" Value Analysis Process v2.0 " Tools & Resources added " Standardization Initiatives
December 2012: VA Director/ SC Operations Dir. Hired/Program
Designed
January 2013: Site Visits for Value Analysis 1.0 Program Roll
Out
February-‐December 2013
28 Large Committee Initiatives Completed
November 2013:
Committee Surveys/ CFO Feedback
December 2013: Value Analysis Version 2.0 Roll
Out
January 2014: Implement Value Analysis 2.0 Strengthen the program
DESIGN
IMPLEMENT
ASSESS LEARN/FEEDBACK
DESIGN
IMPLEMENT
2014!
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What did we learn ….
ü We understand the need (advantages)… ü The process is not perfect (pain points) … ü We have a lot of work to do to make it perfect … ü It is going to take a total team effort to get it done!
} Membership Responsibilities ◦ Revised membership packet will be reviewed
� Signature of understanding is required for 2014 } Involvement ◦ Continue to provide participation logs to Executive Leadership at each facility to promote participation
◦ Re-‐evaluate the committee membership on a quarterly basis to ensure accurate member designation
} Communication/Surgeon Involvement ◦ Provide Clinical Oversight Committee with Best Practice Committee meeting minutes at the end of each month
◦ Provide Nursing Education with Best Practice Committee meeting minutes at the end of each month
◦ Ask that each of you actively discuss all initiatives with your end users, physicians, educators, IT departments and Executive Leadership to identify any “speed bumps” at the beginning of the process
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} Surgeon Involvement/Geographical Practices ◦ Clinical Oversight Committee ◦ Surgeon/End User representation on the Best Practice Committee call
� Membership Packet (Page 4): Each facility will be permitted to designate one “Ad Hoc” member on a monthly basis. The appointed Ad Hoc member must be reported to the Director of Value Analysis at least Vive business days prior to the scheduled committee meeting. This member is not a voting member however should be a clinical expert resource on the agenda topic(s).
} New Product Request Process/Approvals ◦ Procured Health implementation
} State of Constant Evaluation/Change ◦ Standardization takes a lot of work ◦ Front end involvement ◦ Will slow down some in 2014 but will always be evaluation/change
} Vendor Relationships ◦ Should not be a relevant factor in making decisions
} Version 2.0 Updates ◦ Membership List (page 3) ◦ Committee Charter (page 4) � Inclusion of Procured Health process ◦ Standardization Initiatives (Page 7) � Inclusion of Procured Health process ◦ Committee Expectations (page 10) � Communication expectations
q Procured Health
q CD Quick Contract Catalog
q Healthcare IQ – Data Mining Analytics
q Pricing Benchmark Tools
q Distribution Spend Analytics
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} Value Analysis – Project Management Tool ◦ Go Live January 2, 2014
} New Product Request ◦ End User Submission of New Product Request ◦ Real Time Status Review Available ◦ Stakeholder Assignments
} Approval Threshold and Request Routing ◦ <$5K Estimated Annual Spend -‐ Approved via Request Format
� Spend will be monitored starting Q2 in Healthcare IQ ◦ >$5K Estimated Annual Spend -‐ Reviewed via Project Format
� CFO NotiVication Approval � Financial Review � Best Practice Committee Review � CFO Final Approval
Request <$5K Annual Spend Total = 67 Approved = 41 Denied = 3 Still Open = 23
Request >$5K Annual Spend Total = 13 Archived = 5 Still Open = 8
Total New Product Request = 80 Average Request per Month = 26.7
88% of New Product Request are resolved in <14 Days
* 58% are resolved in <4 days
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} Enhanced patient care } Improved Asset/Inventory Management } Contractual compliance } Decrease supply/operating expense } Streamlined logistics
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} Commitment ◦ Deriving the beneVits of standardization requires sustained commitment at all management levels.
} Collaborative Approach ◦ Multi-‐disciplinary committee members
} Internal Communication/Awareness ◦ Standardization objectives, goals and results should be communicated to all management levels and affected end users
} Measurement ◦ Successful standardization is achieved only when signiVicant levels of compliance with the standardization decision are achieved.
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Planning & IdentiVication⟶
Clinical Evaluation⟶
Analysis ⟶
Decision⟶
Conversion⟶
Results Measure⟶ 42
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} Visibility of “Emotional” Product Evaluation and Conversion ◦ Project Plan and Timeline ◦ Strategy for Decision ◦ Tools for Success
� Example: Current Stryker Ortho Trauma customers } Bi Weekly CEO/CFO Conference Call ◦ Supply Chain Update
} Monthly Email Update ◦ Value Analysis Best Practice Committee Meeting Minutes
} Quarterly WebEx ◦ Executive Oversight Committee review
� Quarterly activity ⟶ Savings Implemented � Next Quarter Initiative Review � Initiatives for Approval
� Increased supply cost associated with implementation � System initiatives (ie. SurgiCount, CLABSI Prevention Products,
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v End User Meetings • Committee Members • Executive Leadership • Surgeon Support
v Host Best Practice Committee Meetings
v Visibility to end users and team members
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" GPO Partnership for Supply Chain Management § Transaction Management § GPO Reimplementation § Strategic Sourcing Focus
" Value Analysis Process v3.0 implemented
Salaries, Wages & BeneVits
Supplies & Purchased Services
Other
} Supplies & Labor ⟹ Largest Expenses ◦ 2013/2014 – Large Reduction in Force Initiatives completed
} Shifted focus to Supply Expense ◦ High ‘Supplies as a % to net revenue’ as a system ◦ No three way match on pricing ◦ Disparate item masters ◦ Inconsistent processes and procedures ◦ Manufacturer shell game
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} Realigned structure
GPO Reimplementation Transaction
Management Strategic Sourcing
Price Parity
LOC Signatures
Commodity Standardization
Single Item Master
Three Way Match Centralized Purchasing
PPI Contracted Services
} Current process state review } Organizational complexities } Readiness Assessment } Process Maturity Assessment
No Process New Products Traditional Value Analysis Total Value of Care
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} Membership Packet v3.0 to be launched ◦ Addition of Purchased Services
} New Process Flow Charts ◦ Initiative Management ◦ New Product Request
} Increased responsibilities to the Materials Management Directors at the Hospitals ◦ New Product Request
} Increased Hospital & Corporate CFO initiative engagement ◦ 6+1 Hospital Committees
} Single Item Master for pricing parity } Single Purchasing Channel to reduce “rogue” purchasing habits
} Pharmacy GPO Implementation – Completed by 11/1/14
} GPO Reimplementation – Completed by 12/31/14
} Single Item Master File – Completed by 12/31/14
} Centralized Purchasing Services – Completed by 4/1/15
… check in with me next year! J
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“The world as we have created it is a process of our thinking. It cannot be changed without changing our
thinking.” ― Albert Einstein