Value Analysis
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| As the supply chain evolves, health care organizations must evolve as well. New demands are being made on materials managers, and other departments also are feeling the economic pressure. But change is not possible without the support of leaders, especially those in executive positions. By making a convincing case to those who embrace change, a culture shift can begin to take place. This will unify departments, synchronize organizational goals and create a more efficient decision-making process involving clinicians. |
Health care organizations struggle as they juggle an ever-lengthening list of competing resource requirements, including labor, clinical measures, performance improvement, patient and staff satisfaction, and regulatory changes. Managers and directors often have 20-plus priorities facing them; and health care supply chain executives are pulled from one meeting to the next.
Understandably, the big short-term carrot is the promise of rapidly reduced supply expenses. However, organizations that invest the time to plan, develop and implement strong clinical quality value analysis (CQVA) strategy and processes will experience long-lasting cultural and organizational change when this approach becomes the organization’s standard business model.
Starting with culture
With culture change, employees, stakeholders and leaders understand the organization’s goals, speak a common language and recognize the individual and organizational value of a priority. A common language unites groups, fosters a universal drive toward excellence, breaks down existing silos or barriers and enables an environment of “oneness.” Working collectively toward common goals reduces variation.
Value analysis activities focus on objective, evidence-based decision-making. Clinical-based criteria are a key differentiator for a successful CQVA process. The Joint Commission and the Institute of Medicine have launched separate initiatives to promote evidence-based medicine. The June 2008 Senate Finance Committee Summit on Health Care Reform stressed that making better use of technology and evidence-based medicine could improve patient care.
A consistent CQVA methodology allows stakeholders to gain experience and expertise while simultaneously increasing efficiency. Experts cite broader benefits.
A Nov. 5, 2008, article in Quality Digest describes how a “well-respected surgical group requests a new surgical device that they swear will revolutionize how surgery is performed in your hospital.... If you are like most hospitals, you relent despite the negative ROI. You chalk it up to the cost of marketing and physician retention and look the other way.”
Involving stakeholders and using a clear decision-making process based upon objective criteria is an excellent way to bring physicians to the table, increase the understanding of stewardship and promote the need to balance new technology, clinical outcomes and return on investments. Creating culture change won’t occur without planning, and acting early will define the course.
The earlier, the better
Identifying a high-level leadership or core team of respected leaders from multiple clinical and operational departments to mold the new culture, provide guidance, remove barriers and increase accountability is an organizational imperative.
Responsibility for supply chain efficiency and savings no longer resides with the materials management department of old that was stuck in a basement.
Culture change cannot occur without engaged leaders from both materials management and the C-suite. Recruit those who will endorse change, have courage and fortitude, and can motivate staff.
The core team’s first tasks are to identify and discuss the case for change and to remove any barriers. A broad statement doesn’t motivate key stakeholders, but a well articulated, targeted, motivating, “burning” platform, or case for change, does.
For example, your CFO’s goal might be to save $5 million next year. But your platform is asking what will happen if you don’t meet that goal. Why is it important to save $5 million? What happens if the hospital doesn’t meet the target? Will it close? Will hours or programs be cut? What other goals also might be part of this initiative?
Key clinical discussions focus on patient care and the use of quality products that maintain or improve quality of patient care. When discussing planned physician communication, emphasize that their input influences decisions around the products they use.
Get creative. For example, several hospitals proposed that CQVA activities can help reduce expenses and liberate funds to allocate for significant clinical care improvements. Next, think about the barriers that may arise. Does your organization’s historical, organizational or political barriers require change?
When recurring initiatives and priorities come and go, change is often seen as the “flavor of the month.” The staff becomes immune, or worse yet, resistant to change. The attitude of maintaining status quo is adopted and staff will assume the initiatives will pass.
This often occurs because leadership folds when the going gets tough. The first time leadership caves, they will create a significant setback in their organization’s successful quest for culture change.
The No. 1 comment we hear from staff and middle management is, “We know what needs to be done, but the administration won’t support us if we try to do it.”
A leader’s role is to ensure stakeholders understand that change is an organizational imperative. When critical tests for change occur, all eyes will focus on them to see if they really will “walk the walk.”
A strategic communication plan enables the leadership team to clearly identify and define key stakeholders, craft clear and common messages, provide information that considers everyone’s interests and supplies the motivation to achieve organizational change. A common mistake is not taking the time to carefully craft this plan. Pay the time now or pay it later.
Change that makes sense
As teams work through savings initiatives, another important goal in achieving culture change is the framework that defines the team-focused guiding principles that are aligned with the organization’s mission and values. As teams move into more complex savings initiatives associated with utilization, waste reduction and DRG management, guiding principles become the roadmap for making tough decisions.
Examples of guiding principles include:
- Maintaining or improving quality
- Ensuring that new products add value (i.e., improve care, quality or efficiency or reduce operational costs).
A well functioning CQVA program requires a structure that is tailored to the hospital’s needs. Unrelated to reporting and hierarchical relations, it provides a forum for communication and promotes accountability.
Some common elements include: Teams that are formed around specific services or focus areas and an oversight team to monitor progress and ensure momentum by providing support and barrier busting. Each team member’s role and responsibility is clearly defined and they are held accountable for outcomes. Ensuring that teams follow a consistent decision-making process helps build trust and organizational cohesion. Process mapping can be useful and helps team members understand the steps necessary to accomplish objective decision-making on products and services used.
As executives understand decision-making steps, it becomes easier for them to support the process. Regularly measuring team-specific quality and savings outcomes improves the program’s objectivity. Develop the measurement plan, activate it and stick to it. Reporting outcomes regularly at oversight meetings ensures that supply chain initiatives remain visible and a high priority.
Critical success factors
The following culture change-related success factors have emerged through the use of CQVA at various hospitals:
1. Leadership engagement: Active executive involvement is key to driving change management, culture change and supply chain efficiency as an organizational imperative.
2. A clear case for change: The hospital’s ability to clearly articulate reasons for change in a way that’s relevant to multiple clinical and organizational stakeholders.
3. Clarity in roles and objectives: The better the stakeholder’s ability to visualize the new environment and their individual role in the process, the more likely he or she will become actively involved in affecting the change.
There are a couple of old sayings, “talking the talk” and “walking the walk.”
One refers to saying the right things, while the other refers to taking action to support the words.
Executives must do more than embrace change. They must live and support the change. Their ability to clearly articulate the vision and goals is merely talking the talk. However, when the plan is put into action and the first critical barrier occurs, the entire organization will watch to see what leaders do. As leaders “walk the walk,” they provide courage to teams who recognize that leadership supports their work.
As work progresses and teams tackle utilization and care management savings, they can quickly learn that organizational incentives aren’t always aligned. For instance, as cost centers work to reduce expenses and revenue centers work to increase growth and productivity, some revenue centers’ volumes shrink.
Additionally, as physicians align their practices with an internal best performer, a specific radiology DRG may decline. Does the radiology executive recognize the budgetary impact? Or does he or she end up in the uncomfortable position of defending a reduction that was a result of another organization’s imperative? This is not simple work and executives must see and manage the big picture.
Also, effectively, objectively and consistently monitoring progress showcases success for everyone. Organizations often embrace the CQVA approach hoping to exceed the limits of reduced supply costs offered by traditional value analysis programs.
However, they quickly discover with its lasting decision-making model and useful tools, CQVA’s work continues to grow and adapt to today’s health care challenges. Teams find new ways to continue to enhance their work and identify new waste-reducing opportunities. They apply the same concepts to other organizational areas.
The CQVA approach integrates clinical and performance improvement methods with value analysis; but the work is never done. It evolves, improves and advances in its ability to tackle complex initiatives
| Elements to making a successful culture change |
• Extending the decision-making process to other organizational decisions, such as physician recruitment • Changing the decision-making process from materials management’s responsibility to organizational accountability • Building a foundation to address multisite standardization and product utilization • Creating effective, efficient ways to involve clinicians and physicians in decision-making • Becoming the bridge between clinical and business decision-making • Embedding the clinical quality value analysis process into the organization’s decision-making rather than just being another initiative. |
• Consistent decision-making processes with supplies and other noncommodity items | Organizational breakthroughs resulting from overall leadership involvement and culture change |
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• Accelerates non-salary cost reductions This article first appeared in the February 2009 issue of Materials Management in Health Care.
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