We are all looking for new supply chain expense savings beyond price and standardization to help our healthcare organizations weather this perfect storm (high inflation, high labor costs, and shrinking bottom line) we all are experiencing. With this in mind, Healthcare Value Analysis & Utilization Management Magazine asked five experts their views on Clinical Supply Utilization Management as one solution to generating more savings.
HVAUMM: What exactly is Clinical Supply Utilization Management?
R. Yokl – The old adage that (the) supply chain’s job is to deliver the right product at the right price at the right time to the right place has been a stalwart in our industry but there is more to managing the overall total cost of supplies and purchased services. How much we consume will have a greater effect than any price or standardization initiative. The selection of the exact requirements of the products that we buy is also critical because if we overshoot, we have feature-rich costlier products that needlessly increase costs. If we undershoot the requirements of our customers, then we have them using two or three products per instance when they should have only used one or two. The bottom line is that these are invisible to supply chain (professionals) right now in the price world.
Clinical supply utilization management (CSUM) allows supply chain and value analysis leaders to see invisible savings opportunities with the use of patient volume centric metrics comparing key performance indicators and cohort benchmarks. CSUM hierarchical systems then allow supply/value chain to strategically target the best opportunities that can result in up to 7% to 15% in overall budget savings.
A. Kaiser – This is a great question, and it depends on who you ask. Hospital-based, clinical quality value analysis (CQVA) professionals who work with a team of value analysis (VA) coordinators and committees define it as:
Defining CSUM in the Eyes of Andrew Kaiser’s VA Leaders at UW Health:
- “Quantifying the use of a product or service,” Amanda Hasburgh, Surgical Tech, Anesthesia/RT/New Technology CQVA Coordinator, UW Health
- “How products are used to fill a clinical need, by who, where and how often,” Melissa Meister, RN, Med/Surg CQVA Coordinator, UW Health
- “Amount of time a product is used for a clinical application. It could be used to show the variance of products within the same specialty,” Sarah Richards, RN, Surgical CQVA Coordinator, UW Health
As clinical supply utilization becomes more patient-focused, our work encapsulates clinical practice standardization. Clinical supply utilization management is dependent on the culture of an organization. We, at UW Health, are currently building dashboards to demonstrate the monthly utilization of key initiatives within clinician utilization to help identify variances as well as compliance. Clinical utilization is all-encompassing for anyone utilizing a product to care for our patient populations.
A. Orlando – At its core, clinical supply utilization management is a concept that centers around aligning the right product for the right patient. Of course, this is a very simplistic view, but the conceptual foundation rings true. I equate it to a 360° review of the products used. This includes elements such as standardization, evidence-based decision-making, vendor and contract management, education and training, and continuous improvement. The overarching goal is to ensure the right supplies are used efficiently and effectively to provide high-quality patient care while minimizing waste and unnecessary costs.
S. Demps – CSUM, in my opinion, is the continuous assessment and management of supply usage and clinical criterion. We’ve become great at cost savings using historical utilization figures and contract renewal strategic savings, but now is the time that we strengthen the focus on eliminating waste, removing inappropriate utilization, and stratifying outcome improvement which may lead to a specific subset of patients that may benefit from the use of a superior product choice. The best way to think of CSUM is that not all patients require the ‘Rolls Royce’ for great clinical outcomes and superior quality care…the ‘Honda’ will work for the majority. Creating, advocating, and managing the selection criteria for when/where/who the ‘Rolls Royce’ product will be utilized is where you will find the greatest reduction of waste and cost reduction potential…CSUM.
T. Chadwell – In a nutshell, CSUM is the appropriate product with the appropriate functionality used on the appropriate patient at the appropriate time. The concept involves making sure there is not over utilization, misalignment, or inefficient use or value mismatches. Additional objectives would be the pursuit of appropriate standardization and waste reduction.
HVAUMM: Why have we taken so long to recognize Clinical Supply Utilization as a highly useful tool/strategy to take our organizations to new levels of value analysis, cost optimization, and quality success?
R. Yokl – There is a matter of maturity of the healthcare supply chain, and value analysis programs within healthcare organizations have come to the point where they have driven out all major savings in pricing and standardization. Thus, the normal next level of savings is to attack what we call savings beyond price which is CSUM. It is part of the evolution of the supply chain program and maturity of value analysis to be the action tool to drive out the savings once they are found through your CSUM reporting tools.
A. Kaiser – I think there are two major components to this: Data management and the approach to change management with your clinicians. They both relate to the culture of the organization. I work and assist our CQVA team in compiling the data across five facilities and three enterprise resource planning systems that have different approaches to clinical documentation. Understanding a baseline and then operationalizing key metrics in that baseline is very challenging when the data is coming from multiple sources with different fields. And as we know, healthcare is becoming the “melting pot” of integrated delivery networks, so we see more and more of these systems having significant variations in their clinical and business practices.
Change management refers to the desire to shift how people think or approach a topic. People often think clinical supply utilization can be done overnight, but this mindset shift can often take years to become rooted in business and clinical application. Change management is done best in small tests of change through data sharing, and the “ask offer ask” methodology, helping people see benchmarking (cost and utilization) of their peers at the same organization but also across the region at comparable organizations.
A. Orlando – Historically, supply chains were very transactional and siloed from the clinical areas. Purchases were driven by cost and contracts, not always quality and outcomes. The value analysis process was in its infancy and clinicians often did not have a seat at the table. This all changed with value-based purchasing and subsequent hospital acquired conditions (HAC) scores. This program and its associated performance-based penalties incentivize hospitals to prioritize patient safety to deliver high-quality care. Consequently, this alignment catalyzed the advancement of clinical supply utilization. Hospitals could no longer solely rely on price or contractual considerations when selecting products. Instead, they were compelled to adopt a comprehensive approach, considering factors such as product quality, clinical outcomes, patient safety, and satisfaction of both patients and clinicians. The emphasis shifted from isolated cost-driven decisions to a holistic view that emphasized optimizing patient care and clinical outcomes through better supply selection.
S. Demps – I believe we have always known the concept of CSUM, but the conversation requires high level clinical engagement components inclusive of risk stratification, when it comes to supplies, at the highest level of the value analysis structure, physician-driven service line committee and/or C-suite. At the root of each product must be an agreement amongst your key stakeholders regarding supply efficacy, differences, and the potential of similar case use. This is tough in many IDNs purely based on strong clinical preferences, even with commodity items. It was not until we were ready to have those pressing but necessary conversations that we poised for a new concept which at the root is in many ways avoiding waste.
T. Chadwell – The continual changes in reimbursement have driven organizations to seek out more opportunities to streamline expenses, putting supply chain and clinical value analysis activities at the forefront. Focus had been on purchase price and standardization for a long time. Lack of actionable data has hindered deeper dives, and healthcare organizations have been slow to put resources into data collection and interfacing disparate data sources. Data on the clinical and operational impacts was not readily available to the supply chain. Organizations are now starting to recognize and acknowledge the weighty impact that value analysis, and by extension, clinical supply utilization can have on the operational and financial success of a healthcare organization. As clinical integration into value analysis has been embraced by many healthcare organizations, the scope of value analysis team initiatives has also shifted to include clinical as well as financial outcomes in their decision making.
HVAUMM: What are some things that Healthcare Supply Chain Leaders and their C-Suite should know about Clinical Supply Utilization that they may not know or believe today?
R. Yokl – We have been studying and tracking clinical supply utilization savings for over two decades now and have found that there is still 7% to 15% in overall supply chain savings available to healthcare organizations. Getting a better price cannot fix the fact that three of the hospitals in your health system are consuming more PICC lines than the rest of the seven hospitals. You must have CSUM.
A. Kaiser – Clinical supply utilization isn’t just a process done by clinical quality value analysis. It is a collaborative and cross functional approach to manage data, monitor for trends, and collaborate to understand the variations in the data to ensure we understand any differences we may see in purchasing, logistics, distribution, and most importantly the actual clinical utilization.
A. Orlando – Clinical supply utilization and evidence-based decision-making are not mutually exclusive. They, indeed, are symbiotic. It is essential to dispel the misconception that clinical supply utilization solely involves opting for the cheapest options. On the contrary, evidence-based decision-making plays a pivotal role in clinical supply utilization and guides supply selection to ensure that the chosen supplies align with patient needs and outcomes.
S. Demps – I believe that each Supply Chain Leader and C-suite should know that CSUM is necessary. Period! Regardless of how well we believe that we are doing, utilization practices have vast variation across enterprises which will continue to bleed unless managed closely as a collaboration. Our team scans usage patterns quarterly and engages projects with the key stakeholders as necessary to bring awareness to the dichotomy on a timely basis.
T. Chadwell – The investment in managing clinical supply utilization can pay for itself over time, and its impacts go far beyond the supply chain. Standardization of products and procedures/processes reduces variation, which in turn, reduces opportunities for the introduction of errors. It makes staff training and cross training easier, especially now that the use of travelers and PRN staff has increased. In some cases, it can lead to increased income and improved margins when the efficiencies free up OR or procedural time and other resources. Supply SKUs and inventory expenses are reduced, which can improve the organization’s balance sheet. Improved staff and customer satisfaction can result when clinical supply utilization is optimized.
HVAUMM: Adding a new modality to a value analysis program can sound daunting at this point. How can it make value analysis and supply chain professionals’ jobs easier?
R. Yokl – Setting up a CSUM system will start the funnel and make the saving come to you as a supply/value chain professional instead of endlessly chasing savings that may or may not be there. If the savings come to you and you get to control which projects and how you want the savings addressed, then this is a major plus. You will need to set the expectation that you will be starting out slow and handling 3-5 utilization opportunities at a time and then as those are implemented you will bring on more.
You must start to make room on your (VA) agendas for these 3-5 areas and must also ask your value analysis team members to step up and assist you as customers, stakeholders, and experts to drive out the savings. It would not hurt to give them a little training in this advanced area of savings beyond price which will make your job and theirs much easier.
A. Kaiser – Anytime we add in a new modality within value analysis, we need to determine if it will add value to the program. Clinical supply utilization can only enhance the process by enabling the users to pivot much more readily, with less variation at the bedside, with fewer category management engagements by clinicians and experts. It can also make the value analysis of a professional’s jobs easier by having a reduction in variation and therefore a reduction in back-orders and quality concerns.
A. Orlando – Before implementing any new modality, value analysis and supply chain must take an introspective look into their specific value analysis program and understand current existing gaps. Many tools are available, including those on the Association of Healthcare Value Analysis Professionals (AHVAP) resource page, that can help guide some of these discussions and assist with this process. Regardless of conducting a formalized gap analysis, both value analysis and/or supply chain should implement programs that address their pain points and effortlessly fill in any process gaps that exist. Having a clear understanding of how these modalities integrate into their current program facilitates smooth implementation. It minimizes potential redundancies, thus alleviating the workload for the value analysis and/or supply chain professional.
S. Demps – Eventually, clearly understanding utilization and setting expectations will make everyone’s life easier by removing guesswork surrounding usage. We created a utilization project around something as simple as dry wipes. We identified that these 100-count pack of wipes were taken into patient rooms, and therefore would have to be discarded at the patient’s discharge or given to the patient. Instead of changing the item, we went to the vendor and explored changing the count of the item in the pack. The vendor created a 25-count pack wipe for us which allowed us to stop throwing out all of the unused wipes! This was not only a cost savings but a landfill avoidance for us; a win-win which did not change our clinicians’ practice and kept us compliant with regulatory guidelines.
T. Chadwell – Reduction in the number of individual SKUs reduces the workload on all supply chain staff. Less inventory to manage and shipments to receive can free staff up to take care of more patient-oriented tasks. With each successful project, the value analysis team demonstrates its significance to the organization’s mission. As variation is reduced and appropriate utilization is enhanced, strategic sourcing becomes possible. Decisions are based on clinical evidence, best practices, and objective financial data, making value analysis projects more streamlined and decision-making more efficient.
Robert W. Yokl, Sr. VP, Supply Chain & Value Analysis Solutions, SVAH Solutions
Robert has over 31 years of experience in the healthcare supply chain and leads the SVAH Solutions team in day-to-day operations on various clinical supply utilization, value analysis, and savings validation solutions. Robert has worked with over 385 hospitals, IDNs, and health systems throughout his career and has engaged in value analysis and supply utilization at every level in a healthcare organization.
Robert W. is the co-author of Healthcare Supply Utilization Revolution – The Future of Supply Chain Management and the Managing Editor and continuing article contributor for Healthcare Value Analysis & Utilization Management Magazine. He is also the chief software architect for SVAH with many value analysis, benchmarking, supply utilization, supply validation, and purchased services solutions in production.
Anne Marie Orlando, RN, MBA, RCIS, CVAHP, Senior Director, Clinical Programs at Blue.Point Supply Chain Solutions; Treasurer, Association of Healthcare Value Analysis Professionals
Anne Marie has been a critical care nurse for over 19 years with a leadership foundation in the Interventional Cardiology and Interventional Radiology space. During her supply chain tenure, Anne Marie held a dual role of Supply Chain and Clinical Resource Director where she operationalized many clinical initiatives while maintaining fiscal accountability. At the GPO level, Anne Marie served as the Director of Clinical Services for Yankee Alliance supporting member value analysis teams and their work with clinical utilization. Anne Marie is currently the Senior Director, Clinical Programs for Blue.Point Supply Chain Solutions supporting value analysis teams in the use of the Blue.Point platform focusing on aligning product utilization and standardization with evidence-based practice.
Shaneka Demps, RN, BSN, MHSc, CIC, CVAHP, Manager, Value Analysis, BayCare Health System
Shaneka Demps is a clinician with vast expertise in healthcare including critical care nursing, value analysis, infection prevention, contract negotiation, data analytics, quality improvement, and numerous scientific abstract/poster presentations and publications. Shaneka takes a multifaceted approach with healthcare advocacy, awareness, and promotion, with the goals of improving the quality of healthcare, decreasing associated costs, and promoting health.
Tracey Chadwell BSN, RN, CVAHP, HACP, Value Analysis Recall Management Advisor and Owner, TACH Consulting
Tracey has 30 years of clinical and supply chain experience driving clinical and operational performance improvement, demonstrating significant returns on investment through clinical utilization management of resources and operational cost savings. Her experience covers aspects of supply chain including data analytics, operational efficiencies, internal and external customer relations, GPOs and contracting, and consulting in these areas. Her experience in value analysis includes leading a program, developing or refining existing programs, and implementing millions of dollars in savings through various healthcare organizations. This included operational and clinical process improvement programs which contributed to cost savings in both labor and non-labor expenses.
Tracey has also been active with state healthcare organizations in all classes of trade, providing educational presentations and advisory services. She has appeared on several podcasts, such as Power Supply and The ASC Podcast as well as several industry blogs. She is a member of the Association for Healthcare Resource and Materials Management (AHRMM) and the Association of Value Analysis Professionals (AHVAP).
Andrew Kaiser, RRT, MBA, CVAHP, System Director, Clinical Quality Value Analysis, UW Health
Andrew Kaiser has over 13 years of experience in value analysis and currently serves as the CQVA Director within the Supply Chain Department at UW Health in Madison, Wisconsin where he partnered with clinicians across the enterprise to transform the Clinical Quality Value Analysis program into a fully integrated clinical service line that prioritizes patients into their decision-making matrix. Andrew’s past work experiences include serving as a Value Analysis Director, Clinical Operations Manager, Business Operations Manager, and Contracting/Implementation leader. Prior to his work in supply chain leadership, Andrew worked as a registered respiratory therapist and ECMO specialist.
Andrew is a member of AHVAP, NBRC, ACHE and has been involved in many AHVAP planning committees. He is also actively engaged in the alumni board for Viterbo University and currently serves on behalf of the engagement committee. He is currently working toward his fellowship status with ACHE and is running for board president of the Viterbo Alumni Association. In his down time, Andrew enjoys singing with the Madison Opera Company and spending time with his 4 dogs!
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