In this Business Profile, Drew Preslar, Andrew Motz and Vicki Alberto, senior program leaders at HealthTrust, discuss the benefits of a value-analysis program to reduce costs while improving clinical outcomes.
HealthTrust: A holistic approach to value analysis
How do you help healthcare organizations?
HealthTrust partners with hospitals and health systems to fine-tune all dimensions of spend, including medical/surgical supplies, purchased services and physician preference items. We examine an organization’s supply chain and purchasing agreements and find ways to optimize cost, quality and outcomes. We provide varying levels of service depending on organizational needs, but overall, we’re committed to creating and sustaining a value-analysis program that optimizes the supply chain to facilitate strong patient and financial outcomes.
What are the biggest challenges you see affecting healthcare organizations?
Some of the largest hurdles relate to purchased services and physician preference items, including implants. It can be difficult for organizations to clearly identify their spend in these areas and ensure they are paying the negotiated price for various items. With purchased services, it’s hard to be certain what vendors are being used in specific categories. When we work with hospitals and health systems, we often find multiple vendors within a space, even though the health system may believe it had only contracted with one. With physician preference items, it can be tough to get a handle on what physicians are using and how they introduce new products into the health system. In some situations, the physician may be using an item in the operating room (OR) prior to it being contracted, and the organization ends up paying a higher price for the item than if it had contracted for it.
A second challenge is effectively engaging the right people and getting them involved in product analysis and selection. Given the dynamic mergers and acquisitions landscape, it’s not unusual to have a large health system with multiple hospitals under its umbrella that have different contracts for the same products and services. Each entity may have a different — and sometimes conflicting — point of view on how it wants to manage products or services and establish purchasing and contracting strategies. Trying to get all stakeholders engaged and aligned to streamline spend can be a hurdle.
Clinicians, in particular, can be difficult to engage. Pulling them away from patient care to attend meetings and partner in decision-making can be a challenge — especially if they don’t perceive the work to be valuable. It’s important to keep meetings productive by having the evidence at hand to enable decision-making. This is especially true when working with physicians who will be looking for the clinical data to back up any decisions.
How does your service offering address these needs?
HealthTrust takes a holistic approach to value analysis, which starts with reviewing an organization’s existing value-analysis program, processes and structure. We review the organization’s contract and invoice data. Some health systems don’t have data repositories that allow easy access to the information, so it may take manual work to comb through everything. We dedicate people and resources to create a true picture of the organization’s spend and use this to inform new purchasing strategies. Every category and product is going to have slightly different methods for driving savings, whether it’s through utilization best practice, pricing or standardization strategies. We think through the available opportunities and devise a customized strategy for each category and client.
The next stage involves drafting a charter for the value-analysis program, identifying key stakeholders and crafting a structure to sustain the program over time. We also recommend processes to underpin the program, including a framework for implementation, decision-making, exceptions and appeals.
To help with clinician engagement, we involve nurses, physicians and other providers in developing processes for new product selection to increase transparency around product purchasing and use. We also assist in identifying and reducing redundancies. Sometimes, pointing out a redundancy to clinicians is all it takes to sway opinion, but in other cases we need to present the best-value product based on evidence and gain clinical buy-in for moving away from other products. This not only helps the organization standardize their products or supplies to decrease cost variations; it can also limit clinical variations to drive care quality and consistency.
As mentioned, HealthTrust offers varying levels of engagement. For example, we can partner with an organization to design, stand up and manage its own value analysis program, or we can embed HealthTrust resources within the system to lead the program. We can also take on specific categories of spend to analyze. Since there is not one model that fits every client’s needs, we adjust our offerings to align with areas where we can be of most assistance.
What are key considerations for healthcare leaders when choosing this type of service?
Look for a vendor that will deliver more than just a playbook on how to reduce costs. Those playbook arrangements tend to result in a big document that gets put on a shelf and ignored. Instead, organizations should look for a partner that will work with them to design a customized program, identify the right people to participate and assist in implementation. Not only should the vendor help set up the program, but it should serve as a mentor in sustaining it, so the organization is empowered to continue progress when the vendor steps back. HealthTrust works with clients to design and establish an array of programs, involving and guiding stakeholders throughout the process and tracking results to ensure consistent performance over time.
We can also offer a progression of harvesting value. Many hospitals and health systems have difficulty identifying additional savings opportunities after they address the low-hanging fruit. We can uncover and unlock the next iteration of savings opportunities based on our experiences with other organizations. This way the hospital or health system doesn’t have to reinvent the wheel but can follow the best practices established by its peers. By having this continuous pipeline, the organization can realize additional savings and avoid having the team lose interest in the initiative and return to old habits.
As healthcare organizations implement use of your product into their day-to-day operations, what advice would you offer so they can best set themselves up for success?
Before embarking on this journey, an organization should understand the maturity of its value- analysis program. Do you currently have a program and are just looking for extra resources to focus on specific categories to collect more savings? Or, are you very early in the process and need help designing, standing up and monitoring a program? Even if an organization does have a program in place, does it engage in value analysis, or is it just reviewing and signing off on new items? A value-analysis program includes key stakeholders, such as clinicians, physicians, supply chain experts and finance, and determines the best products in terms of the clinical value they bring, as well as the cost.
To fully appreciate your starting point, you should assess your existing approach to see where there are gaps and improvement opportunities. The next step is to identify an executive sponsor who can work with the vendor throughout the engagement. Without executive engagement, the program could stall, so it is crucial to identify the best person early in the process. Having a communication plan is also beneficial. If there is a disconnect between the group making the decisions and the frontline staff using the equipment, it can breed dissatisfaction and mistrust. Establishing a consistent and reliable method for sharing information around decisions is critical before getting too far into the value-analysis process.
How can organizations learn more about your company?
For more information, go to https://healthtrustpg.com/supply-chain/insight-advisory-supply-chain/.
HealthTrust (HealthTrust Purchasing Group, L.P.) is committed to strengthening provider performance and clinical excellence through an aligned membership model and the delivery of total spend management advisory solutions that leverage its operator experience, scale, and innovation. Headquartered in Nashville, Tennessee, HealthTrust serves over 1,500 hospitals and health systems, and more than 35,000 other locations, including ambulatory surgery centers, physician practices, long-term care, and alternate care sites. On Twitter @healthtrustpg.