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: expenditures as they
relate to supplies, services, and
other areas in supply chain
control
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”
5
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
Stage 2
Define
Current State:
Cost (any
expenditure)
•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
• 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)
Stage 4
Define
Current State:
Quality
(patient
experience)
• Process or Product direct and indirect impacts
• Short and long term
• Organization wide
• Cost avoidance
• 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
• Provide peer reviewed evidence, avoid vendor marketing
and self-funded studies
Implementation:
Strategy
Formation
• 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 valuebased 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
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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
Average purchase
price
Units
$ 0 .2207
158,700
Purchase Cost
$ 35, 027.00
Needlestick Injury Benchmark
Needlestick Injuries
37
Per Needlestick Cost
$ 3000.00
Total Needlestick Cost
$111.000.00
Total Cost of
Needlesticks/Needles
Total Cost of
Needlesticks/Needles $146,027.00
SUPPLY CHAIN INTERVENTION: DECREASE SAFETY SYRINGE PRICE BY 15%
Average purchase
price
Units
Purchase Cost
Total Savings
$ 0.1876
Needlestick Injuries
37
158,700
Per Needlestick Cost
$ 3,000.00
$ 29,772.95
Total Needlestick Cost
-15%
Note: * Negotiate minimum reduction of $3,500 mesh per unit cost
Total Cost of
$ 111,000.00 Needlesticks/Needles $140,772.95
0%
-3.60%
Case Costs: New vs. Conventional Safety Syringes
Actual Historical Spend
Average purchase
price
Units
$ 0 .2207
158,700
Purchase Cost
$ 35, 027.00
Needlestick Injury Benchmark
Needlestick Injuries
37
Per Needlestick Cost
$ 3000.00
Total Needlestick Cost
$111.000.00
Total Cost of
Needlesticks/Needles
Total Cost of
Needlesticks/Needles $146,027.00
SUPPLY CHAIN INTERVENTION: CONVERT TO IMPROVED SAFETY SYRINGES
Average purchase
price
Units
Purchase Cost
Total Savings
$ 0.3112
Needlestick Injuries
27
158,700
Per Needlestick Cost
$ 3,000.00
$ 49,387.44
Total Needlestick Cost
41%
Note: * Negotiate minimum reduction of $3,500 mesh per unit cost
Total Cost of
$ 81,000.00 Needlesticks/Needles $130,387.44
-27%
-10.71%
Case Costs: Conventional vs. New Safety Syringes
Actual Historical Spend
Average purchase
price
Units
$ 0 .2207
158,700
Purchase Cost
$ 35, 027.00
Needlestick Injury Benchmark
Needlestick Injuries
37
Per Needlestick Cost
$ 3000.00
Total Needlestick Cost
$111.000.00
Total Cost of
Needlesticks/Needles
Total Cost of
Needlesticks/Needles $146,027.00
SUPPLY CHAIN INTERVENTION: OBTAIN PERFORMANCE GUARANTEE
Average purchase
price
Units
Purchase Cost
Total Savings
$ 0.3112
Needlestick Injuries
18
158,700
Per Needlestick Cost
$ 3,000.00
$ 49,387.44
Total Needlestick Cost
41%
Note: * Negotiate minimum reduction of $3,500 mesh per unit cost
Total Cost of
$ 54,000.00 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
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Physician Data
Physician Average
3.5
3
2.5
2
1.5
National Stent Rate per
PCI = 1.54
(Medicare 2012)
1
0.5
0
Physician Average
Example: DES Rate Reduction to National
Average
Physician A
Physician B
Physician C
Physician D
Physician National Stent
Cost of
Savings
Stent Rate Average Variance
Stent
per PCI
2.4
1.54
0.86 $ 1,450 $ 1,247
1.4
3.3
2.8
1.54
1.54
1.54
-0.14 $
1.76 $
1.26 $
1,450 $
1,450 $
1,450 $
(203)
2,552
1,827
Physician E
1.25
1.54
-0.29 $
1,450 $
Physician F
1.2
1.54
-0.34 $
1,450 $
(493)
Totals
(421)
Cases Total Savings
150 $ 187,050
Less than
National Average
35
250 $
75 $
115
638,000
137,025
Less than
National Average
Less than
National Average
99
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
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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 1st Industry Engagement Group to
pull together all of the supply chain touch points to
address CQO.
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 - Weekly e-newsletter with latest on the industry and
association
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
A Diamond for You
Congratulations
on your
achievements!
Questions & Answers