Moving forward, how health systems manage clinical spend will determine their long-term success—and this responsibility cannot be relegated to traditional value analysis which focuses primarily on managing new product requests. The emphasis on products only, especially new products, is incredibly limiting. It makes it difficult to engage physicians in meaningful conversations and to address the larger issues that contribute to inefficiency and waste, like poor utilization and high variation.
To prosper in the world of value-based care, providers need to evolve to a more comprehensive, strategic, system-wide model of clinical spend management that takes into account costs, quality, and outcomes. The overarching mandate should be broadly defined around value – specifically, ensuring that medicine is practiced to deliver the best outcomes at the lowest cost.
In this new model:
• A strong governance structure is the epicenter: Developing a high-performing clinical spend management program requires a governance structure that is cross-functional and leverages existing service line structures with representation from physicians, medical staff, supply chain, quality, operations, finance, strategic planning, and even marketing. The members are charged with identifying ways to improve clinical outcomes, enhance efficiency, and boost volume.
• Decisions are more informed: Patients are top-of-mind for all decisions, which are based on a sound fact base of clinical evidence, and aligned with the health system’s mission and vision. Product decisions are also based on clinical outcomes and the total cost of ownership, namely the long-term effectiveness of medical devices. This higher-level of analytical rigor is a core component of eliminating wasteful spending and keeping a patients-first approach.
Further, decisions aren’t made about devices alone but rather to support the development of best practice guidelines and care pathways that standardize care, as identified by physicians. For example, making a decision that boosts volume, without addressing other issues, could easily result in unexpected consequences (think readmissions) if flawed performance factors aren’t tackled as well.
• Physicians are partners in creating value: In this new normal, physicians are not merely passive observers who request their go-to physician preference items. Physicians help supply chain to see the world through their eyes and actively identify new value-optimizing opportunities. For example, physicians may highlight that a new device requires extensive training or extra prep time in OR which reduces efficiency.
• Committing to ongoing improvement is a must: When implementing this new model, supply chain leaders should review progress and results at least quarterly, if not monthly. Tracking key performance indicators (KPIs) like cost avoidance, savings achieved, new product approval rate, and average days to resolve a request, helps to drive accountability and improve performance. Supply chain leaders should also seek feedback from stakeholders to discover what’s working, what’s not, and why. That why, which often goes unasked question, is critical because it gets to the root of the problem, rather than just providing a quick fix solution.
In the end, the power of a strong clinical spend management model goes far beyond the committee members and meeting agendas. At the core, it’s about serving patients and families. It’s about helping communities. It’s about delivering better healthcare—and everyone can get onboard with that.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
