The Clinical Impact of Supply Chain Decisions and Managing Physician Preference Items: The Art of Collaboration and Communication Karen Rago, RN, MPA, FAAMA, FACCA Agenda • • • • • • • • • • Imperative for Change: The IHI Triple Aim New Economic Reality Collaboration Structure and Governance Difference in Physician/Surgeon Styles Education New Supply Implant Request Process Vendor Negotiations Examples of Successful Physician Engagement Keys to Success The IHI Triple Aim The IHI Triple Aim is a framework developed by the Institute for Healthcare Improvement that describes an approach to optimizing health system performance. It is IHI’s belief that new designs must be developed to simultaneously pursue three dimensions, which we call the “Triple Aim”: • Improving the patient experience of care (including quality and satisfaction); • Improving the health of populations; and • Reducing the per capita cost of health care http://www.ihi.org/Engage/Initiatives/TripleAim/pages/default.aspx New Economic Reality Quality Patient Experience Cost o Quality and Cost improvement imperatives  The US health care system is the most costly in the world, accounting for 17% of the gross domestic product with estimates that percentage will grow to nearly 20% by 2020 according to CMS projections.  Aging populations and increased longevity, coupled with chronic health problems, have become a global challenge, putting new demands on medical and social services http://www.ihi.org/Engage/Initiatives/TripleAim/pages/default.aspx New Economic Reality Quality Patient Experience Cost • Quality and Cost improvement imperatives – Medicare Pay for Performance – Reduction in reimbursement from payors – Obamacare: Increased number of people insured but underinsured – Continued transition to Outpatient and Observation care with lower reimbursement than inpatient – Aging population Collaboration Cooperation Networking Exchanging Information for mutual benefit Short term informal relationship for sharing information with separate goals and resources Coordination Collaboration Longer term effort around a project or task with some sharing of resources and division of roles Changes the way organizations work together for a common vision resulting in service integration, or system change http://www.kansaslearning.org/index/collaboration Collaboration and Communication: The Way to Win • Redefinition of Partner: Hospital and Physicians – Medical Directors • Should have annual goals aligned with the strategic mission • Contractual requirement for participation and performance, aligned incentives • Decision-making responsibilities • Goals and objective determination • Oversight of practice performance, quality and economics Collaboration and Communication: The Way to Win cont’d • Supply Chain VP Role – The supply chain is the second largest and fastest growing expense for healthcare providers; with only labor costing most providers more. * – Supply chain is also a key to creating better endto-end visibility about all of the products, devices and supplies used in healthcare – critical to running businesses better *Bruce Johnson, CEO of GHX http://hitconsultant.net/2013/05/13/5-ways-supply-chain-can-reduce-rising-healthcare-costs/ Collaboration and Communication: The Way to Win cont’d • Working in Interdisciplinary Teams – Break down department boundaries • Collaborative Approach • Win-Win Situations – Trust, openness and respect Structure/Governance • Steering Committee • Clinical Improvement Team/Task Force/Value Analysis Committee Structure/Governance • Steering Committee – Senior Leadership: CEO, CMO, CFO, COO, CNO, VP Supply Chain – Roles/Responsibilities • Sets the mandate/goals • Removes barriers to success • Hold Teams accountable Structure/Governance Cont’d • Clinical Improvement Team/Task Force/Value Analysis Committee – Leadership – Team Members – Roles/Responsibilities Structure/Governance Cont’d • Clinical Improvement Team/Task Force/Value Analysis Committee – Leadership: Physician, Administrative and Supply Chain Lead • Physician needs to be someone who is respected by his/her peers • Empowered to make decisions • Aligned with the hospital – Medical Directorships with goals aligned with the strategic mission of the hospital – Team leadership’s goals aligned – Quality and Efficiency goals • Accountable to CMO Structure/Governance Cont’d • Clinical Improvement Team/Task Force/Value Analysis Committee – Team Members • Physicians – Involve multiple physicians to minimize or mitigate potential conflicts of interest – Have physicians complete a conflict of interest document • • • • • • • • • Supply Chain Nursing Operating Room/Cardiac Cath Lab RT/PT Radiology Transfusion Services Laboratory Case Management/Social Work Finance Structure/Governance Cont’d • Clinical Improvement Team/Task Force/Value Analysis Committee – Roles/Responsibilities • • • • Patient Centered Decision Making Approve of all new requests for Supplies/Implants Generate quality and cost improvement ideas Advance ideas that have high probability of successful implementation and gain support from constituents • Negotiate with Vendors • Develop implementation plan • Develop dashboard to track progress and make adjustments as necessary Recognizing Difference in Styles • Medicine Physicians: – Process oriented – More willing to attend meetings – Willing to discuss and develop ideas • Surgeons – Outcome oriented – Less willing to attend weekly meetings – More open to having ideas presented in an all hands meeting for approval Increase Knowledge: Helps set the imperative for change • Educate all team members to: – – – – Triple Aim Improvement Process Financial terms Reimbursement from Government and Commercial Payors • Readily share: – Internal financial and utilization data – External benchmark data • • • • • UHC for Academic Medical Centers Advisory Board Premier Sg2 Etc. Example of Slide included in all financial presentations Glossary of Financial Terms • • • • • • • Gross Charges-What the Hospital charges for services and supplies Net Revenue-What the hospital gets paid by government and commercial payors Direct Costs- any cost directly attributed to an individual patient – Directly related to physician ordering practices and preferences. – Nursing Care, Supplies, RT, PT, OR time, diagnostics, devices and implants….. – Variable costs – costs that go up or down with patient volume (labor, supplies) – Fixed costs – costs that don’t change with changes in volume (CT, surgical instruments, medical director) Contribution Margin-Net Revenue minus Direct Costs Indirect Costs-Overhead of running the hospital – Administration, Billing, Heating and Lighting, Building Maintenance Total Costs-Direct and Indirect Costs Net Profit/Loss- Net Revenue-Total Costs New Supply/Implant Request • Develop process for physicians to request new supplies/implants • Develop form to be completed by physician, vendor and department administrator to include: – – – – – Supply item, catalogue number Cost Supply/Implant to be replaced if any Analysis of annual financial impact Clinical/Quality imperative • Requesting physician presents request to the Supply Chain Value Analysis Team – Team includes peer physicians Vendor Negotiations • Identify team members to participate in meeting with vendors – Physician – Administrative – Supply Chain • Prep with physicians for meeting with vendors • Utilize hospital reimbursement and cost information Examples of Successful Physician Engagement • University of California Medical Centers – 5 Academic Medical Centers – 5 Electrophysiology Chiefs – Collaboration between all to reduce costs for EP implants • Process – Led by UC Office of the President and UCSF CV Administrator – Supply Chain Administrators collated the utilization data – Several conference calls with the 5 Chiefs and respective administrators – Consensus reached on implant utilization and price point for each Medical Center – Successful negotiations with vendors with full support from the EP Chiefs Examples of Successful Physician Engagement • Stanford University Medical Center • Reduction in number of Cardiac Coronary Artery Bypass Graft (CABG) and Valve Surgical Packs – Unique pack for each procedure for each of the 6 surgeons – Set up a conference room with all packs – Reviewed each pack item in a single meeting with 5 of the 6 surgeons – Outcome • 1 pack for CABG and 1 pack for Valve procedures that all surgeons would use • Reduce “have available” items Examples of Successful Physician Engagement • Stanford University Medical Center – Swan-Ganz Catheters • Were used in every cardiac surgery procedure • Developed guidelines for utilization – Left Ventricular Ejection Fraction (LVEF) threshold set for abnormal function – Swan-Ganz Catheters utilized only in cases with abnormal LVEF – Reduced utilization by 25% year over year – Reduced Nursing time in the ICU » No need to record data » No need to change solution and bandage Examples of Successful Physician Engagement • Stanford University Medical Center – Infusion Pumps • Several different infusion pumps used throughout the hospital • Goal was to agree on one vendor and one pump • Pulled a multidisciplinary team together – Anesthesiologists – Nurses – Supply Chain • Each Infusion Pump Vendor presented to the team including demonstrations of pump • Consensus reached on one vendor and one pump Keys to Success • Senior Leadership and Physician Support/Partnership • Physician Leader – – – – Respected by peers Annual goals are aligned with hospital Empowered Included in discussions/negotiations with supply vendors • Partnership with Supply Chain VP and Team • Multidisciplinary Teams – Led by Physician, Administrator and Supply Chain Administrator • Collaborative Process • Knowledge – Educate to: • Improvement Process • Financial Terminology • Reimbursement from Government and Private Payors • Financial Analysis Support: Data • Dashboards and Follow-through Questions? 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