2013 - 4th Quarter

Supply Chain retools Clinical Resource program to focus on Total Value

By Tony A. Hall, Chief Procurement Officer

“Healthcare reform has acted as an accelerant to already intense supply chain initiatives nationwide.  As providers anticipate declining reimbursement, historical preferences for items based on good vendor relationships, physician preference or history are diminishing as decision makers are now moving their focus almost entirely on total value.”  –Mitch Wasden, CEO/COO University of Missouri Health Systems

The message: the traditional healthcare supply chain model must refocus some of our programs to deliver higher than ever returns i.e., increase total value proposition QUICKLY and substantively.   To assure success the team stepped back and took a deep dive into their structure, talent pool, available resources (which would turn out to be a key issue) existing tools and ,most importantly, current processes.  While the team has always prided itself on ‘keeping their eye on the ball’ organizationally, it was clear that two things had to improve quickly and exponentially: 1) Our ability to produce critical and relevant data and 2) To increase the efficacy of our existing Clinical Resource Management program.

Enter Value Analysis.  In the healthcare supply world the terms Value Analysis and Clinical Resource Management are used to describe programs that manage product analysis and review.  The intent of our original CRM program was to evolve from a traditional reactive model to a more proactive, physician driven model. The reality was that we didn’t currently move in that direction aggressively enough, thus leaving us with a ‘reactive’ program.

So, earlier this year the team launched their retooled Value Analysis program (nicknamed VAT).  This program represents an ambitious endeavor to save over $6.3 million over the fiscal year 2014.  The recipe for success includes physician and key end user support as well as strong executive team support and team chair direction.  The program is now designed to be proactive and we now actively involve medical leadership and staff in discussions about standardization, pricing models, changes in supplies utilized today, process improvements, and support when vendors contact key stakeholders directly.

Reaching these ambitious expense reductions will be achieved by renegotiating contracts and standardizing by using better and less expensive equipment, supplies and purchased services.  Essentially doing more with less while still improving resources, patient care or clinical quality.

The program currently includes seven teams headed up by department directors, managers or physicians.  These teams identify cost-savings opportunities and work with vendors.  They are also actively involved in product evaluation, reviewing purchased services and will ultimately conduct audits to see how and if changes are working. The teams include members from all health care facilities. 

We expect that our seven Value Analysis Teams (VAT’s) will be on-going with continued oversight and progress reporting to our Executive Oversight Team, which is chaired by Dr. Les Hall.   In the end, the Strategic Sourcing team will work to assure the process is sustainable for many years to come.

In conclusion, aggressive pursuit of these activities and other programs being developed by UM Procurement will free up resources for the University of Missouri Health Care’s core mission which is to advance the health of all people, especially Missourians. Through exceptional clinical service, University of Missouri Health Care supports the education and research missions of the University of Missouri. 

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