1. Pain Points of Product Conversion
Where do those products come from and why this understanding is a bigger priority more than ever
Brent Petty, CMRP Barbara Strain, CVAHP
Executive Industry Consultant Director Value Management
Global Healthcare Team University of Virginia Health System
Lexmark International, Inc.

2. Objectives This session will provide a roadmap for:
Reviewing the mix of products in the delivery of patient care and how to pinpoint where the value is and why. 
Developing strategies using standard processes, purchase driven costs and patient outcomes helping drive the value to the organization will be understood. 
Analyzing a criteria based decision matrix that will reveal critical success factors such as collaborating with clinical stakeholders, keeping supply chain management and finance in the loop and getting to a win-win solution.

3. Where do those products come from?

4. Origin of Products – know the why
Professional Meetings
Articles
New staff
Onboarding new physicians
New contract cycle
Supplier discontinues product
Benchmarking; price, utilization, strategic direction
Regulatory
Procedure change
Equipment – new or upgrade
Unresolvable product issues
Other, other, other, other, other

5. How to Get to the What
Nurses or other clinically trained staff employed by Supply Chain Management
Physician liaison to or employed by/leads SCM
Alignment of institutional resources; finance, contracting, data analysts
Value Analysis processes
New Product Introduction standard work

6. One example of a decision matrix

8. Decision Criteria Clinical based evidence Length of stay
Choose what is the best fit for your organization and the initiative
Clinical based evidence
Length of stay
Patient satisfaction
Physician alignment
Efficiency
Restarts/Redraws/Redo’s and Re-
OUTCOME IMPROVEMENT
QUALITY IMPROVEMENT
SAFETY IMPROVEMENT
ORGANIZATION STRATEGIC GOALS
FINANCIAL IMPACT

9. Decision Criteria Actual performance vs Expected performance
Reduction of Hospital Acquired Infections
Be a member of the groups working on these initiatives
Actual performance vs Expected performance
Apply to the initiative under review
Example Right Supply, Right Time
Time or timing to deliver supplies
Triggers/pars
Patient special needs
Hand Hygiene
Falls Reduction
OUTCOME IMPROVEMENT
QUALITY IMPROVEMENT
SAFETY IMPROVEMENT
ORGANIZATION STRATEGIC GOALS
FINANCIAL IMPACT

10. Decision Criteria Reduce employee injuries sticks/exposures
Employee Health
Workman’s Compensation
Staff temp pool expenses
Right product, Right procedure
Patient Handling
Shears
Staff injuries
Repositioning patient in bed
Transferring patient to stretcher/bed/chair
Up out of bed/down the hall
OUTCOME IMPROVEMENT
QUALITY IMPROVEMENT
SAFETY IMPROVEMENT
ORGANIZATION STRATEGIC GOALS
FINANCIAL IMPACT

11. Decision Criteria Product Standardization
Utilization of products or services
Contract compliance/GPO
Reduce on hand inventory
Purchased Services
OUTCOME IMPROVEMENT
QUALITY IMPROVEMENT
SAFETY IMPROVEMENT
ORGANIZATION STRATEGIC GOALS
FINANCIAL IMPACT

12. Decision Criteria Return On Investment – ROI Create Margin
Decrease cost:
per patient day
per procedure
per operative case
per CMI
Return On Investment – ROI
Net cost/savings of product
Net cost of conversion
Net improvement of initiative
Overall ROI
Create Margin
Physician Preference Items – PPI
Neutralize or Increase Reimbursement
OUTCOME IMPROVEMENT
QUALITY IMPROVEMENT
SAFETY IMPROVEMENT
ORGANIZATION STRATEGIC GOALS
FINANCIAL IMPACT

13. Plan the Work and Work the Plan

14. Cross-Industry Comparison of Size, Quality & Productivity / Efficiency

15. What do these numbers have in common?86
1095
Died today - Ebola
Died today - Guns
Died today -
Accidentally in US Hospitals

16. The way IT is designed remains part of the problem!
Tejal Gandhi, MD, president of the National Patient Safety Foundation and associate professor of medicine, Harvard Medical School, spoke at the hearing.
WASHINGTON | July 18, 2014
It's a chilling reality – one often overlooked in annual mortality statistics: Preventable medical errors persist as the No. 3 killer in the U.S. – third only to heart disease and cancer – claiming the lives of some 400,000 people each year. At a Senate hearing Thursday, patient safety officials put their best ideas forward on how to solve the crisis, with IT often at the center of discussions. 
Hearing members, who spoke before the Subcommittee on Primary Health and Aging, not only underscored the devastating loss of human life – more than 1,000 people each day – but also called attention to the fact that these medical errors cost the nation a colossal ----
$1 trillion each year!

17. ~$750B 68% 60-70% 25% Too much waste in the U.S. healthcare system!
per year in waste in the US
healthcare system, according to the Institute of Medicine. (25% of total U.S. healthcare spend)
Unnecessary services: ~$210
Excess admin costs: ~$190
Inefficient delivery of care: ~$130
Inflated prices: ~$105
Fraud: ~$75
Prevention failures: ~$55
3 out of 10
68%
of specialists receive no information from Primary Care physician prior to referral visit
60-70%
of referrals go unscheduled
25%
of appointments are
missed
lab tests
are reordered because results are lost!
Institute of Medicine report: ‘Best Care at Lower Cost: .
20 September
The Path to Continuously Learning Health Care in America”

18. Achieving a better way .…
The single functional requirement for the design of a jet aircraft cockpit is to facilitate interaction between the decision – maker and the critical information. The cockpit design creates an environment that allows for efficient and reliable interaction.

19. Comprehensive Care for Joint Replacement Model (CJR)

20. Example --Scorecard Orthopedic

21. Supply Cost per patient Medicare Exp Reimbursement
Example --Scorecard Slipper Socks
Scorecard
MSDRG Name
Total Volume
Supply Cost per patient
Total Cost per patient
Margin per patient
Medicare Exp Reimbursement
Falls
Measure Value
GOAL
Fall per QTR
Slipper socks
MFG
Price
Parity
Floor
A400 A
$1.73 3
2West B
$1.85 5
ICU C
$1.68 8
Step Down D
$2.01 12
LEGEND
GOAL MET =
SC Goal
1 Std Deviation from Lowest Cost
Total SC
Actual MSCM
Total Cost
HPM
GOAL UNMET =
Margin
Total or Exp Payment (greater) - SC + Direct Variable

22. Value based healthcare is a reality
Holistic
Concerned with complete systems rather than with the analysis of or dissection into parts
Session Wrap up:
Value based healthcare is a reality
Payer based programs will drive increase focus on cost-effectiveness of all aspects of care delivered
Patients as consumers will ultimately define value
Increasing demand for clinical evidence and reducing variation to support products.
Can you answer this question:
“In my bundled payment cases, this product will represent an increased cost that will directly reduce reimbursement. Why should I use it?”
Wellmont Holston Valley Medical Center