Transcript CQO: a recap
AHRMM Update
WSHMMA, April 2014
Agenda
CQO: The Next Phase Educational Offerings Resources Career Planning Industry Initiatives and Advocacy Comments, Questions, Feedback
CQO: a recap
In 2013, AHRMM launched the CQO Movement, a new way of approaching supply chain.
Under the CQO movement, the supply chain can no longer focus exclusively on price, but rather the combination of product cost, the quality of care delivered, and the reimbursement outcomes to support healthcare’s new value-based models.
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CQO: a new way of decision-making…
Cost:
control expenditures as they relate to supplies, services, and other areas in supply chain
Quality:
patient-centered care aimed at achieving the best possible clinical outcomes
Outcomes:
financial reimbursement driven by outstanding clinician care at the appropriate cost 4
…has become healthcare’s new “buzzword”
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So is CQO the most important supply chain issue? No.
CQO teaches us that “supply chain issues” no longer exist.
In the new world of healthcare, supply chain ties to: • Patient care • • Profit margins Quality control CQO isn’t a supply chain issue. It’s a healthcare issue.
CQO Methodology
Define Current State Implementation Evaluate and Measure Results
CQO Methodologies, Stages 1 & 2
Stage 1 Define Current State: Stakeholders
•Define the objectives and breadth of the initiative, e.g., • Reducing complications or infection rates • Improving employee safety, e.g., needlestick injuries • Improving process and efficiencies •Who are the stakeholders and what are their roles?
• Direct users • Indirectly affected cohorts
Stage 2 Define Current State: Cost (any expenditure)
• Utilization and cost of the current products or category • Frequency and cost of adverse events • Cost of inefficiencies • Cost of change
CQO Methodologies, Stages 3 & 4
Stage 3 Define Current State: Outcomes (revenue lost or gained)
• Process or Product direct and indirect impacts • Short and long term • Organization wide • Cost avoidance
Stage 4 Define Current State: Quality (patient experience)
• Review of patient satisfaction data • Define quality indicators around product or process • Quality indicators must be unaffected or improved to proceed
CQO Methodologies, Stage 5
Implementation: Strategy Formation
• Provide peer reviewed evidence, avoid vendor marketing and self-funded studies • Empower the CQO intersection group to make the strategy decisions about product utilization or process improvement considering all the information about cost, quality and outcomes provided in current state • Remind stakeholders of mission to improve value (improved financial performance with better or similar quality and patient satisfaction • Reach strategic consensus with all stakeholders • Use strategy formation to guide next stages of implementation
New Metrics
CQO requires new metrics to transition from cost-based measurement to value based measurement… “Supply cost” per limited revenue categories are too narrow.
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CQO Metrics: Managing to Value Value Determines Reimbursement, e.g., Value-based Purchasing Score
Core Measures (70%) HCAHPS (30%) Your VBP Performance Score
• • •
Core Measures becoming more supply dependent
Pressure ulcers stages III and IV Vascular catheter-associated infections Catheter-associated urinary tract infects 12
When Supply Chain Owns the CQO Intersection: Case Study 1
• • •
CQO Asks:
How Do We Reduce Needlestick Injuries in Healthcare?
>800,000/yr in US Risk of blood borne pathogens Education only means of addressing
CQO Asks:
How Do We Reduce Needlestick Injuries in Healthcare?
• New syringes with improved safety mechanisms
CQO Asks:
What is Unique About its Clinical Performance to Justify its Cost?
Safety Syringes
• 1 Needlestick injury/6,000 injections • Average cost of testing/treatment after injury equals $3,000 • Additional costs of treatment can add up to hundreds of thousands
Case Costs: Conventional Safety Syringes
Actual Historical Spend Needlestick Injury Benchmark Total Cost of Needlesticks/Needles Average purchase price $ 0 .2207
Needlestick Injuries 37 Units 158,700 Per Needlestick Cost $ 3000.00
Purchase Cost $ 35, 027.00 Total Needlestick Cost $111.000.00
Total Cost of Needlesticks/Needles $146,027.00
SUPPLY CHAIN INTERVENTION: DECREASE SAFETY SYRINGE PRICE BY 15% Average purchase price Units $ 0.1876 158,700 Needlestick Injuries Per Needlestick Cost Purchase Cost $ 29,772.95 Total Needlestick Cost Total Savings -15% Note: * Negotiate minimum reduction of $3,500 mesh per unit cost 37 $ 3,000.00 $ 111,000.00 Total Cost of Needlesticks/Needles $140,772.95 0% -3.60%
Case Costs: New vs. Conventional Safety Syringes
Actual Historical Spend Needlestick Injury Benchmark Total Cost of Needlesticks/Needles Average purchase price $ 0 .2207
Needlestick Injuries 37 Units 158,700 Per Needlestick Cost $ 3000.00
Purchase Cost $ 35, 027.00 Total Needlestick Cost $111.000.00
Total Cost of Needlesticks/Needles $146,027.00
SUPPLY CHAIN INTERVENTION: CONVERT TO IMPROVED SAFETY SYRINGES Average purchase price Units $ 0.3112 158,700 Needlestick Injuries Per Needlestick Cost Purchase Cost $ 49,387.44 Total Needlestick Cost Total Savings 41% Note: * Negotiate minimum reduction of $3,500 mesh per unit cost 27 $ 3,000.00 $ 81,000.00 Total Cost of Needlesticks/Needles $130,387.44 -27% -10.71%
Case Costs: Conventional vs. New Safety Syringes
Actual Historical Spend Needlestick Injury Benchmark Total Cost of Needlesticks/Needles Average purchase price $ 0 .2207
Needlestick Injuries 37 Units 158,700 Per Needlestick Cost $ 3000.00
Purchase Cost $ 35, 027.00 Total Needlestick Cost $111.000.00
Total Cost of Needlesticks/Needles $146,027.00
SUPPLY CHAIN INTERVENTION: OBTAIN PERFORMANCE GUARANTEE Average purchase price Units $ 0.3112 158,700 Needlestick Injuries Per Needlestick Cost Purchase Cost $ 49,387.44 Total Needlestick Cost Total Savings 41% Note: * Negotiate minimum reduction of $3,500 mesh per unit cost 18 $ 3,000.00 $ 54,000.00 Total Cost of Needlesticks/Needles $130,387.44 -51% -29.2%
Substantiating Evidence
Tuma SJ, Sepkowitz KA. Efficacy of safety-engineered device implementation in the prevention of percutaneous injuries: a review of published studies. Clin Infect Dis
2006;42:1159–1170.
Elder A, Paterson C. Sharps injuries in UK health care: a review of injury rates, viral transmission and potential efficacy of safety devices. Occup Med (Lond) 2006;56:566–574. Adams D, Elliott TSJ. Impact of safety needle devices on occupationally acquired needlestick injuries a four-year prospective study. J Hosp Infect 2006;64:50–55.
Whitby M, McLaws ML, Slater K. Needlestick injuries in a major teaching hospital: the worthwhile effect of hospital-wide replacement of conventional hollow-bore needles. Am J
Infect Control 2008;36:180–186.
Jagger J, Perry J, Gomaa A, Kornblatt Phillips E. The impact of US policies to protect healthcare workers from bloodborne pathogens: the critical role of safety-engineered devices. J Infect Public Health 2008;1:62–67. Lamontagne F, Abiteboul D, Lolom I, et al. Role of safety-engineered devices in preventing needlestick injuries in 32 French hospitals. Infect Control Hosp Epidemiol 2007;28:18:23.
When Supply Chain Owns the CQO Intersection:
DES rate reduction to national average 22
Physician Data
Physician Average
3,5 3 2,5 2 1,5 1 0,5 0 National Stent Rate per PCI = 1.54
(Medicare 2012) Physician Average
Example: DES Rate Reduction to National Average
Physician A Physician B Physician C Physician D Physician E Physician F
Physician Stent Rate
2.4
1.4
3.3
2.8
1.25
1.2
National Average
1.54
1.54
1.54
1.54
1.54
1.54
Stent Variance
0.86
-0.14
1.76
1.26
-0.29
Cost of Stent
$ $ $ 1,450 $ 1,450 $ 1,450 1,450 1,450
Savings per PCI
$ 1,247 $ $ $ (203) 2,552 1,827 $ (421) -0.34
$ 1,450 $ (493) Totals
Cases
250
Total Savings
150 $ 187,050 Less than 35 National Average $ 638,000 75 $ 137,025 Less than 115 National Average Less than 99 National Average 724 $ 962,075
Example: DES Rate Reduction to National Average
• Assumptions – – – – – – – – Simulated data is risk adjusted Procedure is PCI MS DRG is 247 Average stent rates per physician over 6 months National stent average per PCI is 1.54 (Medicare 2012) Cost per DES is $1,450 Fully loaded room cost per hour = $1,500 Average case time = 1 hour
DES rate reduction to National Average
• • • • •
STAGE I – Current State - Stakeholders
Direct stakeholders – Interventional Cardiologists Indirect stakeholders – Inventory Control Staff, Chairman of Medicine, Risk Management $1450 cost of DES stent $962,075 excess spend on stents based on variance against national average Costs greater when other factors considered, e.g., cardiac cath pack, manifold, staffing, fluoroscopy, documentation system, contrast, and medications
DES rate reduction to National Average
• •
STAGE II – Current State - Cost
Cost of adverse event – readmission for chest pain within 30 days Opportunity cost – reduction in case time based on $1500/hr cath lab rate • • •
STAGE III – Current State – Outcomes
Same DRG reimbursement using fewer hospital resources, decreased number of stents, and increased case load Direct impact – increased case volume with same capacity at reimbursement rate $11,836 for MS DRG 247 Indirect impact – cancellation rates
DES rate reduction to National Average
• • • • • •
STAGE IV – Current State – Quality
Review of practice guidelines: --ACCF, AHA, SCAI Practice Guidelines --2011 Guidelines for PCI: Executive Summary Review patient satisfaction data incl. HCAHPS Quality indicator – FDA approved product Quality indicator – monitor 30 day post PCI mortality rate from state registry Stage V - X as per methodology Evaluation – stents used/patient/MD
CQO Principles
• Supply chain contributes greatly to patient care.
• Supply chain is a critical part of hospital management strategy.
• Under the “new healthcare,” supply chain performance requires new metrics.
• All hospital stakeholders need to be educated about the role of supply chain in daily care delivery.
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Lots of people are talking “CQO.”
What’s next?
• • • • • Vanderbilt University Medical Center Scottsdale Healthcare Wellmont Health System Ochsner Health System University of Virginia Health System Read more in Supply Chain Strategies and Solutions 30
CQO requires outreach.
CQO requires supply chain leaders to build new and different types of relationships with: o o o o o o Clinicians Finance/reimbursement teams Medical leadership Manufacturers Distributors GPOs
Monday, August 4
AHRMM will host the 1 pull together all of the supply chain touch points to address CQO.
st Industry Engagement Group to
The Future of Healthcare is Now.
The Future of Healthcare is CQO.
Supply chain is perfectly positioned at the
intersection of cost, quality, and outcomes
to take the lead on responding to the demands of health reform.
Join the CQO movement and help transform healthcare.
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Educational Offerings
Education: Live Webinars
Upcoming live webinars include:
May 1
Detecting Product Equivalency to Drive Lower PPI
June 19
Harnessing Data Normalization to Drive Product Savings
August 21
Understand How Predictive Tools Help Expedite Value Analysis
October 16
Controlling Costly Physician Preference Items
Education: On Demand Webinars
Recently recorded webinars include:
WHY, WHAT, and HOW of Strategic Planning (3 part series) Managing Supply Chain in Healthcare Reform Decoding Supply Chain Analytics for Improved Cost, Quality, and Outcomes Suppliers – Partners or Pariahs?
Capital Equipment Procurement, Contracting, and Management CMRP Examination Overview Knowing When to Outsource – Making Purchased Services Work for You A Value-Analysis Perspective on Infection Prevention and Control: The Role of Contaminated Hands, Environmental Surfaces, and Skin in Transmission
Education: Online Courses
Online Courses
Embracing the Cost, Quality, and Outcomes Movement – the Future of Healthcare Supply Chain
Supply Chain: Owning the Intersection of Cost Quality, and Outcomes Patient Protection and Affordable Care Act – Goals and Components, Provider Reimbursement, and Health System Changes
Application of Six Sigma to Inventory Management Challenges and Opportunities in Healthcare Provider Adoption of GS1 Standards Clinical Department Supply Management Creating and Sustaining a Lean-Cost Conscious Culture Giving Powerful Presentations Healthcare Supply Chain Considerations in Emergency Management MMIS Systems Evaluation Selection More available at www.ahrmm.org/learning_center
Education: Highlights
Leading a Systematic and Integrated Change Initiative
In this environment of continuous change it’s critical to know how to not only manage change, but lead it. Change Management 101: Preparing to Be a Change Agent Change Management 201: How to Be a Change Agent
The Why, What, and How of Strategic Planning
Demonstrate how you and your department can contribute to the hospital’s bottom line with a well thought out and expertly implemented strategic plan.
Strategic Planning 101: Why is a Strategic Plan Important Strategic Planning 201: How to Develop a Strategic Plan Strategic Planning 301: Implementing a Strategic Plan
Education: Face to Face
AHRMM Annual Conference & Exhibition
Interactive educational sessions led by industry leaders Largest exhibition of its kind Face-to-face networking opportunities with peers, vendors, and association leaders
Resources
AHRMM provides print and electronic resources and tools to the membership to keep members informed and engaged in the CQO Movement.
Resources
News and information
Magazine and Special Reports
Supply Chain Strategies & Solutions -
Bi-monthly member magazine
AHRMM eNews -
association Weekly e-newsletter with latest on the industry and
Publications
Numerous publications specific to the healthcare supply chain both published by AHRMM and other standards from the industry
Online Resources
Complimentary access to online resources such as CQO Headquarters, RFP Library, Lexicon, Sustainability Roadmap, Knowledge Center, etc.
Networking Resources
ListServs, social networking platforms, mentor program, and affiliated chapters provide an opportunity for members to connect with their peers.
Career Planning Tools
Career Planning Tools
Career Center
Open position listings, resume posting, apply online, recruit for a position
AHRMM Mentor Program
Connect with seasoned veterans in the field to address issues, solve problems, and plan your career path
Career Advancement Guide
Career milestones, education, experience, tools, and skill-sets
Compensation Survey
Current industry trends and demographics
Career Planning Tools: Development
Certified Materials & Resource Professional (CMRP) Certification
Nationally Recognized Established and managed by AHA Certification Center (AHA-CC) Independent body affiliated with the AHA Convenient and Affordable Two-hour exam Available online at your local H&R Block location Administrations available at the AHRMM Annual Conference Study and review materials available through AHRMM
Champion Industry Initiatives
Industry Initiatives
Hospital Environmental Sustainability
Collaboration with ASHE and AHE Sustainability roadmap – an implementation guide for performance improvement measures to save organizations money, improve facility environmental performance, and respond to community concerns.
www.sustainabilityroadmap.org
UDI and Industry Data Standards AHA Engagement