A Strategic Approach to Integrating
Utilization Management Into Your Value
Analysis Program
For
SEPAC
Presented by Robert W. Yokl, Vice President,
Operations, Strategic Value Analysis in Healthcare
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
1
Utilization Management - the Missing
Link In the Supply Chain Continuum
Dispelling the Misconceptions
• It’s Not Contracting
• It’s Not Best Price
• It’s Not Best Valued
Product or Service
• It’s Not Inventory
Management
• It’s Not Spend
Management
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
2
Understanding the Relationship GAP Between
Supply Utilization and Value Analysis
Current Approaches
Employed Today
Are Not Built to
Reduce, Manage,
and Control
Utilization Over the
Short or Long Term
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
3
Utilization Management Is Continuous Monitoring,
Managing, and Controlling the Cost of
Consumption of Products and Services
VALUE ANALYSIS
• Meet Functional
Requirements
• Align Products with
Contracting
Strategies
• Prove Products Work
for Departments
• Convert Products
From Old to New
UTILIZATION MANAGEMENT
Vs.
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
• Eliminate Waste
• Eliminate Over-Use
• Eliminate Product
Mismatches
• Manage
Consumption
• Control Short and
Long Term Costs
4
Typical Value Analysis Study –
Exam Gloves
New Project
Contract
Terms Set
Last Year’s Usage
2.1 Million
Gloves
New GPO
Contract for
Exam Gloves
New Contract
Will Save 12%
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
Value Analysis
Performed
Validate Product
Features
Prove Product
with Clinical Trial
Implement New
Contracted
Product
5
Unintended Consequences of a
Simple Value Analysis Study
Original Spend $90K
15% Savings = $14K
---------------------------Utilization Increased
Spend $94K
Cost Overrun Due to
Utilization
Overspend $18K
---------------------------36% Increase in Cost
Overall
Utilization
Management
Utilization
Analysis
Value Analysis
Re-Review
Required
Find Problem
Glove Usage Is at
2.7 Million Gloves
Used
Develop Solution
Exam Glove Costs
Have Gone Up by
20%
Hospital Not
Achieving 15%
Savings
Over-consumption
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
Deploy Solution
Continue to
Monitor
6
Example of Exam Glove Utilization
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
7
Getting Past "Price Thinking" to Increase Savings
Opportunities by 7% to 13% of Overall Budget
Price Savings 1%, 2% or 3% Overall
•
•
•
•
Group Purchasing
Standardization
Capitation/Constructs
Custom Contracts
Price
Utilization 7% to 13% Overall
•
•
•
•
•
Over-Consumption
Waste
Misuse
Product Mismatches
Mismanagement
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
Utilization
8
The Big Picture on the Remaining
Supply Savings Opportunities
Standardization,
3%
Price, 3%
Utilization,
78%
Copyright 2013/2014 - Strategic
Value Analysis in Healthcare
Value Analysis,
16%
9
Getting Your Organization Ready for
Supply Utilization Management
Bridging the Utilization Gap
Copyright 2013/2014 - Strategic
Value Analysis in Healthcare
10
The Strategic Approach to
Utilization Management Integration
•
•
•
•
•
Reporting
Training
Management Buy-In
Deployment
Ongoing Savings
Copyright 2013/2014 - Strategic
Value Analysis in Healthcare
11
Utilization Over-Spend Can Effect Over 78% of Your
Major Products, Services, and Technologies
Hand Soaps
Custom OR Packs
IV Sets
Underpads
Harmonic Scalpels
Enterals
Orthopedic-Knees
Stethoscopes
Pacemakers
Sterilization Wraps Sutures Lab-Vacutainers
Ablation Catheters
Vascular Stents
BP Cuffs
Electrodes
Exam Gloves
Ostomy
Grafts & Tissues
Urological Stents
SCD Sleeves Lab-Reagents
Floor Cleaner
Biopsy Needles
Foley Catheters
Suction
Dressings Forceps
Adult Diapers
Laundry/Linen
Endo-Trocars
Anesth-Trays
Surgical Skin Prep Patient ID Bands
Orthopedic Hips
Balloon Catheters
Endo-Staplers
Electrosurgical
Wound Care Pulse Oxisensors
Transcription Services
IV Start Kits
Tissue Sealants
Infection Control Wipes
Dietary Paper Products
Blood Collection Needles
Blades & Burrs
Coronary Stents
IV Solutions
Bone Cement
Drapes
Suture Trays
ISO Gowns Endo-Pouch
Oral Care Kits
Copyright 2013/2014-Strategic Value Analysis in Healthcare - Skippack, PA
12
Reporting
You Have to Find the Utilization Savings Opportunity
Before You Can Do Anything About It
• Monitor and Control the Day to Day
• Follow Up On Previous Changes
• Develop New VA Study Candidates
for Your Teams
• Control "GAPS" in Supply and
Purchase Service Utilization
• Make a Better Case for Key
Changes
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
13
Training
Don’t Expect Your Value Analysis Team/Committee Will
Instantly Know How to Handle Utilization
• Don’t Underestimate the
Power of Good Training
o For Yourself
o For Your Teams
o For Your Department Heads &
Managers
o For Your Senior Leadership
• Don’t Reinvent the Wheel
o Learn From the Best with Pride
o Deploy the Best Strategies for Your
Organization
o You Owe it to Your Team to Give Them
the Best Training Available
• Better Training Ensures
Better Results
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
14
Management Buy-In
If Senior Management and Physicians “Get It”
Your Utilization Efforts Will Be So Much Easier!
• Management still lives in the
price/contract first world
• They are not thinking on the
level of a Supply Chain
Professional
• Help them understand the
upside savings potential of an
organization-wide Utilization
Management Program
• Give them case studies on
Utilization Savings
Copyright 2013/2014 - Strategic Value Analysis in
Healthcare
15
Deployment
The Deployment Plan is Your Shortcut to Success!
•Find it and stop
it from hurting
your bottom line
•Does the heavy
lifting so you
don’t have to
Utilization
Savings
Technology
Quality
Objectives
People
•Find the quality
gaps revealed in
utilization
reporting
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
•Train your teams
to win the
utilization game
16
Ongoing Savings
Utilization Is Not a One Time Event, It Is a Method to Control
and Manage Costs Over the Short and Long-Term
• Employ An Ongoing Benchmarking
System So You Always Know Where
You Stand
o High Level Benchmarks Let You Know Which Way
the Needle is Moving
o But Ground Level Benchmarks Are Where the
Actionable Savings Resides
• Share the Reporting With Your
Department Heads and Managers
o They Control the Utilization of the Products and
Services
o At Some Point They Need to Be Responsible for
Their Own Supply Consumption Beyond Budget
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
17
Best Practices to Uncover ALL of Your
Hidden Utilization Savings
Opportunities
• Track All of Your Utilization in Your
Multi-Million Dollar Supply Chains
o Supplies
o Purchase Services
• Strategically Attack Any and All
Utilization Variances
• Make It Competitive With Your
Department Heads and Managers
• Focus Your Value Analysis Teams
On Utilization Studies to Freshen
Up Your Team’s Approach
• Make Your Job Easier
Copyright 2013/2014 - Strategic Value Analysis in
Healthcare
18
Utilization Management – The Future is Now!
This is Our Time to Shine!
• We Have to Take Our Value
Analysis Game to a New
Level
• Our Organizations Are
Depending Upon Us to
Deliver the Savings and
Quality Results
• We Have to Meet These
New Challenges Head On!
• Failure Is Not An Option!
Copyright 2013/2014 - Strategic Value Analysis in Healthcare
19
QUESTIONS?
THANK YOU!
Robert W. Yokl, Vice President-Operations
Strategic Value Analysis in Healthcare
www.StrategicVA.com
Email ryokl@strategicva.com
1-800-220-4271
Copyright 2013/2014-Strategic Value Analysis in Healthcare - Skippack, PA
20