Claim OwnershipHealthcare Supply Chain Best Practices Podcast
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© Copyright Robert Yokl
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A Podcast for healthcare supply chain managers, value analysis professional and anyone who manages a supply budget or cost management initiatives in a healthcare organization today.
Robert T. Yokl, President & Chief Value Strategist will share (with special guests) his over 35 years of healthcare supply chain operation, consulting and training in the latest strategies in Cost Management, Cost Avoidance and Reducing Overall Supply Chain Spend While Dramatically Improving Quality and Customer Satisfaction in the Process.
Robert T. Yokl, President & Chief Value Strategist will share (with special guests) his over 35 years of healthcare supply chain operation, consulting and training in the latest strategies in Cost Management, Cost Avoidance and Reducing Overall Supply Chain Spend While Dramatically Improving Quality and Customer Satisfaction in the Process.
150 Episodes
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A Special Interview with Mark Copeland
Let’s face it, inflation, clinical labor shortages, and market conditions are doing a number on our health systems’ bottom lines and forcing organizations to find new and better ways to eke out costs while maintaining quality and outcomes. This is easier said than done. Group purchasing organizations and your own custom contracting are readjusting to the new normal, but inflation has taken away the majority of what I call “home run savings opportunities” that we once had. There are still some singles and doubles with savings that can add up, but they just aren’t what they used to be, nor can they alleviate the hit our health systems’ bottoms lines are taking. None of this is new to anyone in the healthcare industry, we all know what the market conditions are. The big question is, where are we going to get the next major level of savings to start hitting doubles, triples, and even home runs again in the savings department?
A new year will no doubt challenge many in our supply chain industry to up our game to new levels that we never thought possible. Let’s face it, there is a heck of a lot of change going on and higher demands from our Chief Financial Officers to optimize costs to mitigate the budgetary shortfalls that all health systems are seeing. All this on top of the new product requests, contract conversions, recall facilitation, and managing teams and projects. This year could be a daunting year if you don’t have some form of strategic plan with clear-cut goals and objectives.
Timing is everything and it does apply to the cost/value/quality world in our healthcare supply chain. In a perfect world, you would want to take the time and have your value analysis teams review all of their major product and/or service category spends and wring the towel dry on savings. But given that the average hospital purchases anywhere from 5K to 25K line items (major systems can be 25K to 85K in SKUs) with over 2,000 contracted categories, there just isn’t enough time in our teams’ agendas to undertake this. This is a tough challenge that you need to be prepared for.
Cost optimization is the art and science of saving money for our healthcare organizations and, at one time, used to be fairly easy by just implementing that right group purchasing contract and garnering the savings that the contract would bring at the best tier level. This has dramatically changed in the past few years with the record inflation and market conditions all but eliminating the big savings we once got from our group purchasing organizations. So where do we go from here? No matter where you take your organization in the next level of cost optimization, you will need to incorporate the following dynamics into this next level of savings.
What is the point of signing a new or renewal contract with the goal of saving money if the savings do not materialize as planned? That’s what savings validation is all about. In fact, here are four ways to leverage savings validation for maximum results.
This podcast was a conversation with Rob Corley, Chief Growth Officer, from Impensa Advisors. Rob has previously been a VP of Supply Chain Services and Analytics for major GPOs and has a vast wealth of savings knowledge and experience in advanced non-salary (supplies & services) expenses. Our goal was to share with you the true potential of looking beyond contract price and thinking outside the box but with your existing data sets in order to save as much as 7% to 15% of your total non-salary budget. We packed a lot of great information and even some benchmarks into this podcast. We hope you enjoy this episode!
Everyone has a degree of experience in cost management, personal and business-wise, which we bring to the table in our value analysis meetings. There is also common sense that can guide us as well, but these experiences and common sense can only get us so far in the savings game. We need to have solid mindsets, knowledge-based tools, and some clever methods in order to find the next level of major savings led by value analysis. Here are the top four elements that will help you save big with your health system’s value analysis program.
We are in tough budgetary times right now with regards to expense reduction at just about every health system in the country. Increased labor costs, supply chain issues, pricing increases, and inflation are really hurting our health systems’ bottom lines. As a value analysis professional, you may ask, how do we make a big splash in the savings bucket when a good amount of our efforts are related to new products, product problems, contract conversions, and recalls? The answer is, retrospective value analysis reviews (RVAR).
With Suzanne Smith, Solutions Advisor, Lumere—a GHX Company, and Kerry Lepage, Clinical Nurse Leader and Director of Surgical Services at Maine Health. Suzanne and Kerry discuss how they got into healthcare supply chain and value analysis, successful strategic sourcing initiatives, the key stakeholders in value analysis, and how to gain buy-in for successful change.
We continue to see value analysis professionals working through a value analysis committee structure on new and renewal GPO contracts, new product requests, recalls, etc., even if they call them value analysis teams. Let me remind you that there is a big difference. To this end, here are three tips about value analysis committees vs. teams you can’t afford to miss:
I recently had a sales call with a hospital Director who was interested in starting a Clinical Supply Utilization Management (CSUM) program at his hospital. His reasons were that they had been doing as much as possible with GPO/contract price and standardization but that they were doing nothing about clinical supply utilization. Being new to the CSUM space, he thought that he could start small and benchmark something like the top 10-20 categories and go from there and asked if that was realistic. My answer was that I wish it was, but it wasn’t.
As we begin a new year, it is good to take a step back and take a good look in the mirror at your value analysis and cost management programs. These are especially important right now in these tough economic times where your Chief Financial Officer is looking for every dollar of revenue and savings they can muster. Plus, it is just a good time to improve the things that need to be improved and make your value analysis program more efficient, time savvy, and get better results than you have in the past.
Too often when a product, service, or technology is purchased, it is considered a completed transaction by your contract managers once they have obtained the best price, and then it is quickly forgotten. You might not realize it, but this is the #1 reason why you would have higher per patient day supply costs than your competition. Remember, price is the smallest element of your lifecycle cost equation. To this end, your optimal lifecycle cost drivers reside in the following six things that happen when the products, services, and technologies you are buying are put into the hands of your customers:
Everyone is back in saving money mode in a big way, but many of the streams of savings have fallen off or fizzled out altogether. That does not mean that there are not major savings still left in the healthcare supply chain, because there are. Most healthcare supply chain pundits and afficionados agree that the next big wave of healthcare supply chain savings is about to happen. This is right at your fingertips, but in order to gain this next level of savings you have to position your organization for the big wins.
I don’t think I need to tell you that the effects of the double whammy of the pandemic and inflation (8.5% as I write this article) is eating into your healthcare organization’s margins. That’s why the need for big supply chain savings couldn’t be greater as your healthcare organization’s volumes drop, supply costs soar, and increased agency nurses and temporary personnel usages are incurred to meet the demand of patient care. To assist you with this challenge, here are five strategies for big healthcare supply chain savings in the current inflationary environment:
Price is a very simple element of the healthcare supply chain procurement process. You order the product at that price and get the total spend for that line-item product. This is the total spend that we see every day from the vendors and manufacturers that we purchase from. Now envision this same scenario happening to thousands or even tens of thousands of products on an ongoing basis at your health system. Standard operating procedure, right? That is a lot of prices to look after and, yes, a heck of a lot of spend to track after as well. There is a synergy to these that add up to the total spend cost at your organization. No surprises here, yet. None of this is surprising anyone in the healthcare supply chain world, but the true “total cost” really involves keeping the organization’s quantity used to the lowest possible level while maintaining the best price. There are many ways that price can get out of line, but we also need to track utilization cost, which goes beyond total cost and uses a patient volume centric metric to measure it. So, tracking Cost Per Adjusted Patient Day to the Supply Category Cost or Cost Per Cath Lab Case Per the Cath Lab Category is a quality measuring tool. So, why aren’t we employing this further?
Now that the value analysis community has embraced value analysis software (VAS) as a best practice, more hospitals, systems, and IDNs are acquiring this easy to master technology. However, for those value analysis practitioners contemplating purchasing value analysis software in the future, here are some of the top mistakes to avoid that can be costly when deciding on your own VA software:
I don’t need to remind you that the cost of just about everything you buy is increasing due to supply chain shortages, higher labor cost, and surging energy prices, which all contribute to the high inflation rate we are now experiencing. In fact, many economists believe this situation can get worse in the coming months! Is there anything you can do about it? Our position is that there are three strategies for dealing with our healthcare organization’s rising supply chain costs that we would like to share with you:
There are many different iterations that value analysis has morphed, evolved, and emerged into leading up to 2022. Value analysis is predominantly applied to products, services, and technologies in the healthcare supply chain. The primary focus of value analysis practitioners is working with hospital and/or system-based value analysis teams that are assigned categories of products and services to review. The main goal is to validate the efficacy of these products and services but also to assist with the selection of the right product used in the clinical environment. Lastly, healthcare value analysis should be a catch point for savings and quality improvements while performing various reviews, studies, and evaluations on an ongoing basis.
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