by Annette Alexander, Kate Lizzi and Kristi Blitz
Clinical Advisory Solutions
08/05/20

This blog post is one of a five-part series on clinical-supply integration, a process for informed business decisions that engage clinicians, preserve quality and safety and lead to greater patient satisfaction.

As John D. Rockefeller once said, “Don’t be afraid to give up the good to go for the great.” It’s hard to argue with Rockefeller’s successful approach to business. To apply his philosophy in supply chain, we need to rethink our approach to product decision-making.

Success in the evolving health care market requires an ongoing, interdisciplinary partnership between clinicians and supply chain professionals to understand the differences in products that may affect quality outcomes and cost. While standardizing clinician product choices is a good start, we need to move toward clinical-supply integration (CSI), a collaborative decision-making platform led by physicians.

Using data to improve total cost, quality and financial outcomes

As organizations tap physicians to lead the charge in CSI, they must provide them with comparisons of cost, utilization, clinical variation and benchmarking. To do so, organizations need to leverage actionable, integrated supply, clinical and operational data.

Supply Data

  • No direct link between supply data and electronic health records
  • Demonstrates changes in purchase volumes and line item pricing, and savings impacts based on those trends

Clinical Data

  • Identifies differences in physician practices and patient populations
  • Found in the electronic health records
  • Includes patient length of stay

Operational Data

  • Shows supplies used and the pathway of care of a patient encounter
  • Includes subset of the patient encounter data, found in the electronic health record
  • Outlines the difference in patient types and procedural settings

When integrating these data sets, two key steps must take place. First, ensure the final data set is actionable. Second, confirm that the method to compile and update the data is sustainable.

Once your integrated data set is compiled, two primary methodologies can be used to move patient outcomes from good to great: the development of category management and the identification of practice variation. Let’s take a deeper look at each of these to better understand how CSI uses data differently than a traditional product standardization approach.

Category Management

Category management is a strategic approach that identifies and reduces unwarranted variation in cost and quality. This strategy aligns and engages organizations into specific groups of supply and/or service categories.

The data used within category management includes market insights, national benchmarking  and patient outcomes. 

The benefits of implementing category management include:

  • Engaging cross-functional category management teams, including clinicians, supply chain sourcing, contracting and value analysis
  • Giving equal weight to strategy, internal and external benchmarking, clinical acceptance, and cost and quality impact
  • Defining your organization’s guiding principles that lead to optimized contract value, clear objectives and actionable data all working together to create a continuous lifecycle of improvement.

Good: Traditional Approach

Great: CSI Category Management

Limited Collaboration

  • Siloed approafch with sourcing events
  • Lack of full organizational engagement/alignment

Expanded support with enhanced clinical input

  • Clincial engagement/alignment
  • Cross-functional teams
  • C-suite support

Single Focus

  • One-time sourcing event; episodic analysis
  • Limited market knowledge/benchmarking

Expanded Focus / Process

  • Ongoing contract lifecycle maintenance
  • Access to market insights/ national benchmarking, continual analysis

Supplier Interaction

  • Focus on immediate need/cost reduction
  • Adversarial engagement

Supplier Engagement

  • Ongoing collaborative supplier relationships focused on programs and win/win strategies

Practice Variation

Practice variation connects data from supply, clinical and operational databases to identify overall clinical practice variations in cost and care. In order to execute at a CSI level, we combine the data from these three sources to make informed decisions about patient care.

The overall goal in a CSI model is an improvement in patient outcomes through a reduction in practice and product variation. Variations become the center of physician peer-to-peer conversations. The patient is the customer, the physicians own and drive the change, the executives support the determinations and the data is the epicenter providing direction.

 

The benefits of identifying practice variation include:

  • Standardizing care, better clinical outcomes, increased revenue, supply cost reduction and consolidation of like products
  • Peer-to-peer discussions using actionable data to promote variation reduction
  • Positive impact on outcomes measurements including length of stay, readmissions, mortality and complications

Good: Traditional Approach

Great: CSI Clinical Practice Variation

Supply chain data

  • Products and pricing
  • Contract commitments and inventories 

Determining cost/case variation

  • Cost data/spend data
  • Vendor market share data

Clinical data

  • Physician-specific product utilization
  • Evidence-based practices
  • Decision support

Physician specific practice variation

  • Differences in products used by physicians
  • Differences in patient populations (age, complications and comorbidities)
  • Differences in clinical outcomes
  • Development of clinical protocols based on findings

Operational data

  • Coding and reimbursement
  • Staffing patterns

Physician-specific operational variation

  • Differences in OR/procedural area times
  • Differences in patient types (inpatient/outpatient) and procedural settings (operating room, ambulatory surgery center)    

 

What are the next steps in moving toward a CSI data driven model?

The starting point is to engage with the clinical stakeholders, ideally at the service line level. Know your facts and validate all data before engaging your physicians. Once you know their total cost of care and how that cost compares to others, you can build an actionable plan. Listen to the needs and concerns of your physician partners. Physicians’ professional goals must also be considered so that all parties can find common ground. This will build their trust to engage in the CSI process and, more importantly, motivate them to lead the process.

Next, executives must understand and acknowledge the necessity and benefits of physician leadership, expertise and participation in clinical and cost management efforts. Together, clinicians and executives will drive the CSI message across the organization. Recognize that opportunities for improvement may lie in multiple areas, including contracting, physician product selection, overall clinical practice and revised plans of care.

With actionable data and strong physician leadership, your approach to supply decision-making will soon move from good to great.

Clinical-supply integration is an ongoing, interdisciplinary strategy encompassing four performance domains — engagement, insights, process and knowledge — to inform decision making about products and services in order to eliminate harm, improve outcomes and lower costs. Read about the domains in the related articles below or learn more about clinical-supply integration.

About the authors. Annette Alexander, brings more than 35 years of experience in healthcare delivery and leadership. Annette spent the past 14 years leading healthcare provider cost reduction projects and project management development with Vizient and Accenture. Her areas of expertise include clinical leadership in perioperative, in-patient and ambulatory departments, as well leading Value Analysis/Supply Chain teams by leveraging her experience in clinical supply management to support product conversion/standardization efforts.

Kate Lizzi, Senior Consulting Director, brings almost 20 years’ experience in healthcare delivery and health insurance.  Kate has spent the past seven years creating and implementing physician engagement and cost reduction strategies.  She excels in physician integration, culture change and strategy implementation.  She holds two bachelor degrees, (mathematics and computer science), obtained her MBA from Arizona State University, earned her project management professional certification as well as her accident, health and life insurance license.

Kristi Biltz, CMRP, Consulting Director, Clinical Advisory Solutions  As consulting director on the clinical advisory team, Kristi Biltz uses her more than 25 years of experience in the health care industry to assist acute care hospitals consistently integrate clinical and supply chain data in a clinical value analysis setting. She helps hospitals improve practice and product variation through a standardized decision-making process supported by evidence and best practice within a culture of continuous process improvement.  Prior to joining Vizient, Kristi held various roles in the hospital setting including O.R. business manager, supply chain manager and value analysis co-chair. She was instrumental in the management of central sterile supply and its supply warehouse as she drove down variation in the O.R.