Hani Elias, JD, MPH, CEO and Co-Founder of Procured Health
2016 has been a challenging year for value analysis leaders as they face the reality that value-based care is here. And more importantly, that this new healthcare paradigm doesn’t just require minor adjustments to the way things have always been done. It requires an entirely new way of thinking and operating. It requires a willingness to relinquish the safety of the status-quo for an uncertain future – because there is far too much at stake not to.
To prosper in healthcare today, providers must evolve to a more comprehensive, strategic, system-wide plan for clinical spend management that incorporates costs, quality, and outcomes. In this new world, the value analysis teams that will be most effective are those that make a deliberate effort to retool in order to thrive. What’s even more difficult is that many factors that previously contributed to the team’s success have now become shortcomings.
In our analysis of over 300 hospitals, we’ve identified 3 characteristics of value analysis teams that once served them well but are now impeding their progress and results.
1. Your team is narrowly focused: While traditional value analysis teams have been product-focused, or even focused on just new technologies, that approach has long out-lived its usefulness. It’s simply not sustainable to be product-focused because it fails to tackle the most significant opportunities to reduce wasteful spending and improve efficiency. The overarching mandate should be broadly defined around value; specifically, ensuring that medicine is practiced to deliver the best outcomes at the lowest cost. The emphasis should be on being a strategic resource for physicians, who care about far more than just products.
Moving beyond product selection to address larger issues like poor utilization and high clinical variation must become a priority, even though these competencies are outside of the traditional value analysis comfort zone. Further, decisions made in a vacuum about products don’t support the development of evidence-based guidelines and care pathways. Similarly, decisions made about products alone don’t allow for conversations with physicians about important trade-offs. For example, deciding that a new product isn’t necessary may allow the hospital to add another resource in the OR that can improve throughput.
2. Your team is comprised of value analysis PRO’s: The truth is that the shift to value also demands a shift to the value analysis team. Your current team of value analysis experts may be ill-equipped to navigate this transformation, not because they’re not good at the jobs they were hired to do, but rather because those jobs are evolving and will soon bear little resemblance to what they once were.
Executing on a more advanced strategy requires teams to think differently. So, in many cases, “industry expertise” brings its own set of problems – like the inability to stray from standard operating procedures. “Outsiders,” without healthcare experience, can be incredibly valuable additions to the team because they have a fresh perspective that allows them to ask smart questions and offer creative solutions to ongoing problems. We’ve seen firsthand that some of the most high-performing value analysis team members can be former project managers, consultants, and even medical device representatives. Staff with these backgrounds excel because of their expert analytical skills, solutions-oriented approach, attention to detail, and their tendency not to take no for an answer.
3. Your team is process-driven: Tasks that were once top priority, like processing new product requests, aren’t serving the industry-wide call to action to improve costs, quality, and outcomes. Many value analysis teams that consider themselves “advanced” today are stuck in this comfort zone and are too focused on just quick turnarounds. Even more troubling is that we often see that while they do measure turnaround time, they don’t measure much else.
Smart value analysis teams must shift from being process-driven to metrics-driven – because making an impact is much better when you can measure it. Tracking KPIs like cost avoidance, savings achieved, and new product approval rate helps teams not only to monitor progress towards clinical, financial, and operational targets, but also to improve efficiency and promote accountability. Teams must also dedicate more time and effort to auditing actual vs. expected clinical and financial benefit. We recommend that teams review progress and results at least quarterly, if not monthly, and secure a standing slot on the executive team agenda.
The big idea is that the impact of a strong value analysis team goes far beyond managing new product requests. What’s most exciting is that the chance to make a difference and deliver better healthcare is right in front of us. All we have to do is step up.
Hani Elias is the CEO and co-founder of Procured Health. Prior to starting Procured, he was a consultant in McKinsey & Company's healthcare practice and a founding fellow of the firm's healthcare economics think tank, the Center for US Health System Reform. He has spoken on clinical spend management at many industry conferences, including AHRMM and the MedAssets healthcare business summit. He is a three-time graduate of Harvard University, earning his bachelors degree, masters in public health, and law degree from the school. Visit Procured Health at www.procuredhealth.com/knowledge.
