In Part 1 of our series on implementing a patient-centric supply chain, we talked about how communication and collaboration are not interchangeable and the differences between the two need to be understood in the transition to a Value Based Purchasing environment. Now, let’s take a deeper look at how to create this shift.
The ability to successfully transition to the value-based reimbursement world depends on departmental strategic business plans that reflect the overall goals of the organization and consolidate the known strengths of your departmental contributions.
In a volume based environment, Supply Chain and Perioperative Services focus on their own goals and utilize linear communication to manage the intersections between the two cultures – Supply Chain concentrates on the organizational mandate to reduce cost and Perioperative Services on providing efficient quality patient care. Although these perspectives are generally aligned globally, the focus on departmental success tends to prioritize short term individual accomplishments instead of long range sustainable financial growth.
A patient-centric culture can be defined as an approach that evaluates all clinical and supporting activities in terms of what is best for the patient and their family/support system. It is a shift from focusing on problems to focusing on the patient.
Adapting and functioning within a patient-centric culture specific to perioperative supply chain begins with minimizing linear communication and management silos and maximizing cross-departmental collaboration. This starts by embracing the uncomfortable realization that the value of each department is no longer measured only by individual accomplishments, but rather to the level a department’s contribution optimizes cost, quality and customer satisfaction for the patient.
The conversion to a patient-centric culture will require a shift in focus from quality processes to measurable quality outcomes. The key is to re-design processes with this new patient-centric end in mind, not just making the existing process cheaper or faster. Key elements pivotal to this effort include:
- What is value?
- How do you define it?
- How do you measure it?
- Can you improve it?
- Only that which can be measured can be improved.
- How do you measure performance?
- How do you measure & track the impact of efficiency on quality; is all efficiency automatically good; is there a tradeoff/a point of diminishing return?
- How do you re-define accountability for ensuring the communication loop is completed consistently?
- Is this process necessary?
- What are the key steps in any process?
- Do we really need to do this step?
- How does this add or subtract value?
- How does this add quality to the patient experience?
- Does the patient and/or clinician perceive this as adding quality and value to his/her experience?
Old way of measuring departmental success: Look inward and improve the process
For decades, Supply Chain departments have measured operational improvement in terms of negotiated savings and the efficiency of core processes. Total savings, lines per purchase order, expense per adjusted patient day & adjusted discharge, inventory turns and other Key Performance Indicators (KPI), have been, and will continue to be, used to justify the organization’s investment in Supply Chain operations.
New way of measuring departmental success: Look outward and improve the system
In today’s VBP environment, these benchmarks become secondary to the overall quality, cost and customer satisfaction of the services provided. Let’s look at these one at a time.
Most of us weave the assessment of an item’s quality into our daily personal purchasing decisions. Does the name brand item actually taste better, clean more efficiently or last longer than the low cost generic alternative? The relationship between these subjective quality assessments, and our financial resources, fuel the cost/benefit analysis that influence what we buy.
In the world of healthcare, when financial resources were abundant and the reimbursement was a “cost plus” model, this analysis was an exercise that allowed a greater emphasis on preference (including paying list price and/or acquiring the latest technology) as we may have been willing to pay more for an item that we considered to be of higher quality. When financial resources are restricted, the need for collaboration between the “forces” of cost vs. perceived quality are essential.
In the VBP world, the assessment of quality must shift from clinical preference to clinical acceptability. Each organization must define these terms within a framework that includes patient safety and clinical outcomes. This framework will shift the conversation from subjective preference to the objective selection of items based on cost, defined risk and measurable patient outcomes.
In this environment purchasing decisions are made based on: documented utilization, clinical outcomes, total cost, service, vendor support, vendor reputation, market share, etc. This requires collaboration between, Physicians, Clinicians, Finance, Administration, IT, Risk Management, Audit, Supply Chain and other key stakeholders.
Most Value Analysis programs have expanded the traditional analysis of unit cost to include total cost and life-cycle cost.
Key elements of this expanded analysis include:
- Purchase price
- Shipping costs
- Inventory costs
- Distribution costs
- Tiered volume incentives
- Procurement/Receiving Costs
- Opportunity costs associated with spending financial resources vs. potential interest revenue
In their book: “Advanced Lean in Healthcare”, Craig T. Albanese MD, MBA; Darin R. Aaby MS; and Terry S. Platchek MD suggest the perception of insurmountable complexity in healthcare is due to the wide scale adoption of “Healthcare Exceptionalism”. “Healthcare Exceptionalism is the belief that healthcare provision is so unique, complicated, challenging, and regulated that any lessons to be learned from other industries are largely irrelevant.”
Variations of Total Quality Improvement, (and similar programs), have been around in healthcare for decades, and although improvements have been made, there can still be resistance to adopting Lean methods in the healthcare environment.
Healthcare organizations experiencing the transition to value based reimbursement recognize customer satisfaction as one of the keys to financial viability, as it is in any business. We are still learning how to apply the techniques implemented by our industrial/business counterparts to redesign processes that align with customer expectations. This requires knowing all your customers and the keys to their satisfaction.
Keys to Patient Satisfaction:
Empathy: understand the experience from the patient’s point of view
Patient is the customer & treated holistically, not just as a body needing repair
Involve everyone wisely & efficiently: as we illustrated in our previous blog post, the patient is the epicenter of everything everyone does but they can be frustrated by duplication.
Keys to Clinical Practitioner Satisfaction:
The practitioner (Nurse, MD, etc.) at the bedside has the greatest impact on the patient experience
Resources needed to provide care are available and appropriate
Technology used contributes to workflow efficiency and productivity
Data used in all information systems is standardized, meaningful, and reportable to meet the needs of all departments that use the information
Supply Chain’s role in optimizing patient & practitioner satisfaction:
The struggle to define a department’s role in the patient’s continuum of care can be simplified by accepting the premise: “In a patient centric culture, if you do not provide care to the patient “at the bedside”, then you work for someone who does”. From a Supply Chain perspective this means implementing processes that enable the clinician to spend more time with the patient and less time in core Materials Management functions while achieving the organization’s goals of cost savings and operational efficiency.
Key elements included in this effort:
Clinicians and Supply Chain leadership & staff must understand:
- How their respective information systems impact each department?
- How standardized data elements impact optimizing quality, cost and customer satisfaction. For example:
- Standardizing data enables the implementation of Item Synchronization Interfaces reducing the manual effort associated with maintaining disparate clinical and Materials Management item masters.
- Standardizing descriptions streamlines communication between clinical and Supply Chain personnel.
- Standardizing UOM improves the accuracy of intraoperative documentation and corresponding usage statistics.
- Standardizing Unit Cost improves the accuracy of case cost reporting.
- How to optimize the financial and operational tradeoffs of using clinical personnel to manage core Materials Management functions.
- The impact of organizing inventory to optimize cost, efficiency, quality and customer satisfaction.
- The impact of accurate documentation.
- How to ensure information stored in their respective information systems is capable of providing reliable, timely & accurate utilization and case cost reporting.
- How to ensure all processes produce measurable data as needed to support ongoing cost reduction initiatives and produce accurate case costing reports?
- How to prioritize and support the development of a clinical informatics infrastructure to guide and direct collaborative initiatives.
Collaboration means more than scheduling more meetings, fine-tuning meeting agendas and minutes, inviting more people to the meetings or listening more carefully. Even though cost, quality, outcomes and efficiency will continue to dominate the healthcare landscape, they no longer represent the end of the journey. Collaboration channels these interconnected forces to a new focal point at the center of the continuum of care: the patient.
J2 will be presenting this information during a presentation at the Surgical Services Summit in Las Vegas in December, 2016. We hope to see you there.