Clinically Driven Supply Chain Methodologies. The Clinical Component of Value Analysis

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Clinically Driven Supply

Chain Methodologies

The Clinical Component of

Value Analysis

Dee Donatelli

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Many Faces of Value

Improved Bottom Line

Alignment with Evidenced-based Practice Improved Outcomes

Improved Safety for Patients and/or Staff Improved Patient Satisfaction

Increased Productivity

Improved Market Standing

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Clinical Value Analysis

Decision based on cost, quality and clinical effectiveness Clinician articulates needs Vendor articulates products to meet need Evidenced Based Practice

researched _articulatesHospital

financial concern

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Opportunities and Challenges

• Communication

• Administrative Support • Physician Champions • Lack of trust

• Lack of awareness or understanding • Inconsistent or poorly defined process • History of failed attempts

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Communication

“The single biggest problem with

communication is the illusion that it has taken place.”

– George Bernard Shaw

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Vital Communication Points

• Understanding the clinical needs versus wants • Determining feasibility and design of contracting

strategy

• Seeking assistance in working with vendors post RFP • Asking for support of implementation

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The Future of Clinical Value Analysis

• Integration of end user performance, total supply cost, patient outcomes, reimbursement

• Incorporation of comparative effectiveness

• Incorporation of project management principles • Decision support software (ROI, Total cost/case,

physician profiling – data driven process)

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Mayo Clinic Supply Chain

Performance Consulting

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Who We Are:

Organizational and Cultural Factors

•Mayo is a physician led organization. There is a clinical

voice in decisions

•Physician/administrators/allied health are on salary

(no bonuses on production or financial performance)

•Financial targets are developed by physician and

administrative leaders

•Strong alignment of mission and goals including financial

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Strategic Vision

• Differentiate Mayo through

– Unmatched focus on the patient

– Evidence-based medicine resulting in highest quality, safety & service,

– Excellent staff working in an environment that supports & recognizes their outstanding efforts

• Contribute to Mayo’s strategic differentiation by adding financial value & improving service through:

– Standardization

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Mayo Supply Chain Management

Performance Consulting

Vision

Provide world class supply chain analysis and consultative support for all aspects of the supply chain process, by focusing on analytics, auditable controls, and optimization though the utilization of an integrated support

team.

Purpose

Performance Consulting is the process by which we can work with Physicians, Administrative Leadership and others to identify and achieve

performance excellence linked to the expense reduction goals of Mayo.

Quality

Mission

Mayo Supply Chain Performance Consulting develops and implements strategies to drive improvements in Supply Expense Management. The Performance Consulting Team will provide coordination and delivery of Mayo Supply Chain solutions in order

to attain specific and measurable quality and cost outcomes for our customers.

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Patient Care Clinical Practice Inventory Technology Measurements Customer Service Analytical Support Process Standardization Utilization

Sup

pl

y

Ch

ain

Expense Management Integrated Support Team

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SCMPC Continuum of Service

Metrics Development

· Provides a snapshot of current state

· Shows data trends over time

· Enables comparisons to other sites or benchmark data

Supply Chain Consultation

· Facilitates supply chain communications

· Clarifies supply chain service options

· Assists and consults on supply chain activities

Analytical Support

· Uncovers data abnormalities and inconsistencies · Identifies actionable opportunities · Leads to tactical recommendations Metrics Development · Provides a snapshot of current state

· Enables comparison to other sites or benchmark data

Project Management

· Leverages analytical findings

· Executes on opportunities

· Moves strategic plans into operations

Analytical Support

· Uncovers data abnormalities and inconsistencies · Identifies actionable opportunities · Leads to tactical recommendations Metrics Development · Provides a snapshot of current state

· Enables comparison to other sites or benchmark data

Services Delivered Customer Value Matur ity of Supp ly Ch ain O perat ions a nd C ustom er Re lation ship

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Mayo Clinic Integrated

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Objectives

• Commit to consistent and active participation to enable enterprise-wide collaboration, decision-making,

implementation and compliance

• Establish a framework to share best practices, process improvements, patient safety, compliance and risk

reduction

• Optimize the standardization of products/devices and develop the creation of a supply formulary for

departments across the enterprise.

• Reduce the acquisition cost of products and devices and increase overall value.

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Objectives

• Provide Support of Mayo Clinic contracting philosophy and process

– Monitor on/off contract spend and correct to ensure compliance.

– Analysis and support - make versus buy decisions. • Manage assessment and availability of new

products/devices.

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Supply Chain “Internal” Structure

Focus

What are customer dept goals?

What are the key performance metrics?

How do we coordinate supply chain optimization plan? ( Projects, Technology, Contracting)

Is SCM delivering intended results?

Department New Technology Assessment Meetings Departmental Customer Service Needs Office of Expense Management (Specialty Councils) Surgery Team

Champion – Leadership Team Member Facilitator – Performance Consulting

Procurement Contracting Value Analysis

Logistics

Coach – Director Performance Consulting

DLMP Team

Champion – Leadership Team Member

Facilitator – Performance Consulting

Logistics

Radiology Team

Logistics

DOM Team

Logistics

Purpose: Coordinate support of

SCM projects and Specialty Councils, including plan

development, resources, timeline, and roles and responsibilities.

Supply Chain Management Integrated Department Support

Deliverables:

Align SCM teams and support activities associated with the SCM Strategic Plan, Projects and Specialty Councils on an ongoing basis

Tools:

Standard Work Plan Standard Tracking Tools

Standard Measurements of Success Project plans where appropriate Agenda with standing items

Purchased Services Team

Logistics

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Customer Support Structure

Mayo Clinic Board of Governors Supply Expense Management Committee (SEMC) Mayo Clinic

Clinical Practice Committee

Lab Radiology GI/Endo Cardiology Surgery Research

Clinical Equipment Acquisition and Maintenance Pharmaceutical Formulary

Satisfy Our Patients

Achieve Mission-Advancing Financial Performance

Plans Policies Scorecards

Improve and Demonstrate Quality, Safety, Service and Value Attract, Develop and Retain the Best People

MAYO CLINIC SUPPLY CHAIN

INTEGRATED DEPARTMENT SUPPORT

Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons. Medical Surgical Formulary Dept. Sponsor TBD SCM Sponsor SCM Contract Mgr SCM Perf Cons.

Note* A specific support team has not been established for Purchased Services. This area of expenditures crosses

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2011 Primary Goal

Physician Preference Products Formulary Development

Important Factors

• Building Trust with Physicians and Senior Executives

– Utilize data that is meaningful to physicians

– Work with consultants to develop standards by which comparative effectiveness can be measured

– Seek partnerships with the Quality Office that drives decisions driven by the science

• Physician engagement through Mayo’s Enterprise Integrated Department Support Teams

• Integration of Category Management processes and methodology (A Mayo Supply Chain Strategic Direction)

• New Technology evaluation based on evidence ”Value Based Purchasing” and “Comparative Effectiveness Research” methods • “Door to Discharge” thinking that considers total cost factors

(Reimbursement included)

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CARILION CLINIC

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Carilion Clinic

• Carilion Clinic operates eight

community hospitals and outpatient centers throughout western Virginia. • 600 Physicians representing 60

specialties

• 152 Practice sites

• 768,576 Primary care visits • Licensed beds – 1,215

• RMH – 60 bed Neonatal Intensive Care Unit

• RMH – Level 1 Trauma center • Virginia Tech Carilion School of

Medicine and Research Institute (VTC)

• Jefferson College of Health Sciences

• National Quality Award from The National Committee for Quality Healthcare (2002)

• Top 100 Most Integrated Healthcare Network in the United States (by SDI Health as published in Modern Healthcare

• Magnet status (Carilion Roanoke hospitals) from American Nurses Credentialing Center

• Consumer Choice #1- National Research Corporation

• Level 3 Patient-Centered Medical Home, Carilion Clinic Family

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Managing Through an Economic Downturn

Four Categories of Strategic Focus

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Interim Value Analysis Structure

Executive Board Focus Group (as needed) Value Analysis Leadership Team Focus Group (as needed) Focus Group (as needed) Focus Group (as needed) Focus Group (as needed) Focus Group (as needed) Nursing Products Value Analysis Team

Non-Clinical Products Value Analysis Team Surgical Products

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Objectives

• Provide framework

• Define roles and responsibilities • Communicate

• Awareness and Accountability • Decrease expenditures

• Assure timely, consistent product trial and evaluation • Monitor and Measure

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Guiding Principles

• Quality • Effectiveness • Cost • Storage/space Availability • Product Availability • Operations • Education/Training

• Safety/Infection Control/Waste Management • Service and Repair

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Sourcing and Contracting

Cost Reduction Strategies

– Price of Products – Request for Proposals – Vendor Standardization or Decentralization – Product Line Compression

– Utilization – Elimination

– Rebate Implementation and Capture – Procedure Price Caps or Shelf Pricing – Bulk Purchases

– Vendor Management

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Clinical Alignment Working

Across the Supply Chain

Achieved Savings

• GE Contrast Media $280,256 • Orthopedics $2,800,000

Identified Savings

• Pharmacy Benefits Management $1.8 m • Sealant/Hemostatics $100K

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Together We Have Implemented FY10

Savings of $8 Million

Price Reductions, $708,480 Services, $947,286 Minor Equipment, $89,998 Medical Supplies, $2,276,026 General Supplies, $1,183,166 Implants, $2,585,343 Food, $209,701