By Robert W. Yokl, Sr. VP, Operations — SVAH Solutions
“There is always a new way: A new way to solve a problem, a new way of climbing the mountain. The ability to identify that ‘new way’ is a valuable asset because most people won’t see past the way things have always been done. The confidence to pursue that ‘new way’ and look at an issue from a new angle is rare enough because most people will obstinately refuse to change. The desire and drive to execute the ‘new way’ lies at the heart of every great innovation.”
My very astute colleague, James Russell, Director of Clinical Resource Management at MD Anderson, and past contributor to HVAUM magazine, was a big influence on me having an inspirational tag line on my email signature. If you have ever emailed with James, you will find that he changes his tag line quite often and always makes great points with his tag line regarding value analysis, quality improvement, and supply chain. Though I don’t change my signature tagline as often as James does, I have settled on one that I believe needs to be the focus of our value analysis and supply chain world moving forward.
The quote above was from Sir Jackie Stewart’s Autobiography (three-time Formula One World Drivers’ Champions back in the late 60s). For those that don’t know much about Formula One Racing, it is and has always been the pinnacle of innovation in racing technology. As one driver stated in an interview, “Our team hires engineers from NASA, and the engineers used to design a part and then they would see it on the spacecraft in about three to five years. In Formula One, they design a part and it is on the race car in two weeks.”
Most recently, Formula One Race Teams based out of the UK and European countries pitched in during the pandemic to make ventilators and breathing devices. They did not just want to take a given design. They re-engineered the ventilators and respiratory breathing devices to make them better, smaller, and less costly to manufacture in less time. They used their capabilities to innovate and found a better way.
During the pandemic, where Personal Protection Equipment (PPE) was scarce, healthcare providers had to find a new and different way to protect their frontline caregivers – and they did! Hospitals and health systems started reprocessing/sterilizing N95 masks when they could not purchase masks. They found a new way out of necessity.
My firm, SVAH, has been a pioneer in the clinical supply utilization area of the healthcare supply chain world over the past 10 years in an extremely price focused time where the GPO contract price is king. Supply utilization is based on reporting, benchmarking, trending, and analyzing in-use costs of products to identify waste and inefficient use, value mismatched products, and other non-price related cost increases. The key here is that it incorporates the total cost of a product category, not just the price of the products, and then marries them to their patient volume metric. This gives a powerful baseline of data to benchmark and create amazing key performance indicators not only today but on an ongoing basis. It will not only incorporate your price changes but will capture increases as well as consumption and waste issues.
Why aren’t more organizations jumping on the clinical supply utilization bandwagon? Even though it has been around over 10 years, 10 years is still very new, and new takes time in any mature environment like the healthcare supply chain. Think about something like value analysis which has been in healthcare for over 40 years but has only come into prominence over the past 15 years. What we have found is that there will be those who will look no further than the way things have always been done (price is king and only price). However, there are many that are starting to realize that there is more to the savings equation than just getting a better price year after year.