A step-by-step approach lays the groundwork for future value analysis projects
By Eric Tritch
Does this describe your approach to value analysis:
- The committee meets sporadically, not regularly?
- Periop finance runs the show?
- Three or four people sit at a conference table, take handwritten notes, then disseminate them in long form after the meeting?
This describes University of Chicago Medicine’s approach when we arrived in late 2011.
We had one committee (Operative Products Evaluation Committee, or OPEC) for the OR, and another (the Med/Surg Value Analysis Team, or VAT) for the nursing floors. Both were hanging on by a thread. There was very little progress being made from month to month – which is about how often they met. What’s more, the teams seemed to focus only on deciding whether or not to bring in a new product that a clinician had requested; neither was looking at opportunities to improve current products and processes.
Despite the challenges, we did have a couple of things going in our favor. The first was the support of Dr. Arieh Shalhav, our chief of urology and chair of the robotics committee. The second was our publicly stated desire to rebuild the value analysis process from the ground up.
Focus on the OR
We decided to focus on the OPEC committee, hoping to use it as an example to grow value analysis in other areas. Instead of hiring a nurse to conduct clinical analyses of new products and opportunities, we sought experts in supply chain and strategic sourcing who knew how to effectively communicate with various stakeholders, manage projects, and perform in-depth analytics. Ian O’Malley was one of our first such hires. With a background in strategic sourcing at a large industrial products manufacturing company and an energy startup, Ian was a good choice to take responsibility for running the committee.
Step One involved putting into place a formal agenda to track projects and status. Then we developed a template allowing all participants to easily see relevant data, including product comparisons, reason for change, cost per case and estimated annual cost impact.
Next, we made a simple but very important change to the meeting: We conducted it by projecting the analysis directly from our template onto the conference room wall. This accomplished two things: First, it allowed us to present data in an easy-to-view format; and second, it allowed us to control the focus of the meeting and highlight concerns – such as cost impact – without appearing argumentative or negative. We worked closely with Dr. Shalhav and we enlisted committee co-chairs among highly respected leaders, including our chief of cardiac/thoracic surgery, our chief of transplant, and an anesthesiologist, who is our perioperative medical director. We also increased the frequency of the meetings to twice per month to accommodate additional requests and the variation in physician schedules.
With a more effective structure in place, we were able to use this committee of surgeon champions to drive projects that we knew would add value to the organization, such as surgical glove standardization, skin adhesive conversion, and trocar standardization. With the support of surgeon leadership and through clear presentation of the data around trials and feedback, we were able to hold firm with the committee’s decisions. These changes allow clinicians to focus on evaluation criteria surrounding the clinical use and outcome impact of the initiative, and allow our supply chain leads to focus on the commercial aspects, leveraging the expertise of each group.
We believe that the key to having effective committees is having the right clinical champions co-chairing them, and proving that the committees are a valuable use of their time. We accomplished that second goal by demonstrating that we could efficiently and accurately analyze data and present it succinctly, so that the clinicians’ time commitment was minimal – both during the meetings and outside them. And we proved that the committee could make decisions and move quickly to implement them.
The word spread that OPEC was a “surgeon friendly” committee, and surgeons came to believe that bringing ideas to the committee was the best way to make progress. We knew that once they were inside the process, we could win them over with its transparency and effectiveness. We demonstrated to them that the process could weed out the winners and losers in terms of new products, without any one individual having to be the bad guy.
Beyond the OR
We took the success of the OPEC committee and adopted a similar approach to our Med/Surg Value Analysis Team. The key here was to make sure we had broad representation, so that the teams bought in to the changes we were proposing, and so that they knew all new products needed to come to the committee for review. As we did with the OR process, we made sure that once the committee approved something, it was quickly implemented, and we used the same analytical tools and projected the agenda and analysis on the conference room wall in the same way.
After showing we could successfully transform the two existing committees at UCM, we looked into setting up committees for our electrophysiology lab, a second committee for the OR (to focus on commodity items), our clinical laboratories, and a team for linen usage. We are in the early stages of building teams for GI/bronch, cardiac cath lab, and ambulatory clinics. We intend to use the same strategy in these areas as we did with the first two, that is, enlist key clinical champions to drive the clinical review and discussion, and direct our team to mine and present the commercial and product analysis.
Our early successes received recognition from the University HealthSystem Consortium, or UHC, as we were awarded their Silver Award for 2nd place overall from their membership’s value analysis programs for our program ROI based on savings and labor expense.
Our next step in our value analysis evolution will be a focus on utilization analysis, that is, looking at our usage of products in procedural and patient care settings. We are currently analyzing software tools to help us mine this data and provide it to our teams.
Now that we have the support structure in place and the confidence of our clinical leaders, we can drive these projects without our clinicians getting defensive. But it all depends on having strong and accurate data. In one pilot project, we looked at the cost per case of our laparoscopic cholecystectomy procedures and compared the supplies costs among various surgeons. The data showed significant differences, causing us to explore other components, including case length and complexity. It will serve as a pilot for other projects, as we seek to drive real efficiencies and help us move to the next step in value analysis.
Eric Tritch is director, strategic sourcing – supply chain, The University of Chicago Medicine, Chicago. Prior to joining UCM in 2011, he had a brief stint at Loyola University Medical Center in its supply chain department, but spent most of his career in supply chain roles in the manufacturing sector and some time in eSourcing consulting.