transitioning value analysis teams to total value of care...2015/12/04 · 12/9/15 1 transitioning...
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Transitioning Value Analysis Teams to Total Value of Care
Assess value analysis structure and overall improvement potential to advance to total value of care by service line Explain cost reduction strategies beyond supply pricing and standardization Compare financial value to cost savings from operational improvements
Learning Objectives
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VHA’s Clinical Quality Value Analysis
A consistent decision-making process Interdisciplinary involvement Support by engaged executives Involved physician champions
Clinical Quality Value Analysis (CQVA)
An organized approach to decisions about products and services and their associated practices in the context of safety, quality and cost effective patient care that includes:
Applied consistently across the organization
Decision-making platform C
linical and physician preference Su
pplie
s an
d se
rvic
es
Clinical Quality Value Analysis Continuum
No Process New Product Team
Value Analysis Novice
Value Analysis Intermediate
Value Analysis Transformation
No formal process Purchases driven by
demand Minimal criteria
Process and team focused on review of new products
Suppliers initiate new product entry and have frequent unregulated access to clinical areas
Customer service to requestor
Often rubber stamp of approval
Process is led by supply chain
Vendor management policy is developed to govern supplier access to clinical areas
Limited Development of objective, non-financial criteria
Commodity and clinical preference product conversions
High volume of new product requests
Process is led by supply chain and clinicians
Supply chain uses market pricing benchmarks to obtain best financial value
Reduce or eliminate waste
Objective data used to - Ensure new
products add value
- Reduce variety of products
Integration of appropriate use for clinical preference products
Develop forum for new technology assessment
Integration with Performance Improvement
Limited strategies for savings
Pricing and limited standardization
Conversion, utilization and
standardization
Total value across care continuum
Value Analysis Advanced
Multi-disciplinary teams use supply chain, clinical, financial and operational data across acute care continuum
Outcomes data drives balanced decision making ˗ EMR ˗ MMS ˗ National Metrics ˗ Protocols ˗ Evidence
Integration of appropriate use for physician preference products
Total value in acute care
Community based, post acute and acute providers as well as patient and family caregivers collaborate to determine appropriate care and product use that results in improved patient engagement
Long term outcomes data drive supply chain, clinical, financial and operational decision making
Alignment of process drives seamless care - Patient access, flow
and care coordination
Pricing only
Greater Physician Involvement
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Characteristics
Focus on cost and standardization within a department or procedural area.
Membership is multi-disciplinary structure by department or clinical practice area.
Team Leader reports initiatives completed, savings achieved and pipeline opportunities.
Physician participation with supply chain in Value Analysis to review products and cost savings opportunities.
Analysis of products and services through the eyes of a patient and spans pre, acute and post acute care.
Membership is across internal and external departments and services that support the service line.
Service line director provides dashboard of service line business review.
Physicians co-chair teams who analyze cost, quality and outcomes.
Teams review practice variation along service line and implement evidence based best practice.
Traditional Value Analysis Advanced Value Analysis
Moving from Hospital Inc. to Health Company Inc. Hospital centric System of Care focused
Compete via size, scale consolidation, outcomes
Volume growth
Actively managing: Physician employment Physician incentives Supply chain metrics
Focusing on: Driving volumes Meaningful use
EMR install
Success = inpatient growth
Quality and value
Compete via care coordination price, service, connectivity,
outcomes
Actively managing: High risk populations Physician alignment
Redesigned value analysis Cost per case metrics
Focusing on: Integrated care management, clinical data across continuum,
post acute care network
Success = Connected lives and shared risk
Payment changes drive
model changes
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Consistent methodology that considers evidence, strategy, business development and risk to the organization and patient.
Accountability for team activities are achieved at the VP level
Cost of Care evaluated versus cost of products
Reimbursement, payor mix and outcomes are critical factors for decision-making.
Establishes solid infrastructure of subject matter experts to analyze complex cost and procedural data
Facilitates an environment for swift adjustments to market conditions.
Ensures decisions are being made from a holistic point of view.
Link products and practice with outcomes
Increased transparency and opportunity for physicians to lead changes to their practice.
Robust teams have ability to support bundled payment analysis
Benefits of Service Line Structure
Bundled Payments
Simplify the buying process
Shop for quality and convenience
Best price
Patients’ own unique needs
Workforce involved
High variable cost
RETAIL
HEALTHCARE
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Opportunity to align incentives across providers to deliver coordinated and efficient care.
ASCs can market their all-inclusive bundled procedures to consumers, creating new ambulatory opportunities in the market and threats to hospitals that are unprepared to compete on price and service.
One upfront price for all services in an episode of care vs individual, variable and sometimes opaque prices for each discrete service needed.
Consumers, Employers and Payors will have ability to shop around for services based on quality, experience and price transparency. Online services such as MediBid will allow patients to receive transparent price bids from providers, similar to Priceline for travel.
Bundled Payments – What is coming?
Shift from Supply Savings to Operational Improvements
65%
30%
5%
Pricing Process improvement Utilization
2014 and 2015 performance is baseline for future shift in operational improvements
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Success Factors
Build an efficient service line based value analysis structure to address cost, quality and outcomes across the continuum of care.
Align physician incentives to ensure they work together to reduce variability and achieve positive outcomes.
Create a laser-focused perioperative process that mitigates infections and other adverse events, efficiently utilizes OR time, and standardizes supply and device utilization.
Coordinate and align incentives with high-quality post-acute providers to reduce potentially avoidable complications and readmissions.
How to we get there?
Revise Value Analysis Team Structure and Process to support a Service Line approach to understanding Total Value of Care. Highly visible governance with Senior Executive oversight. Goals are aligned with clinical, financial and operational objectives. ACO will move certain DRG’s to a bundled payment structure. Multidisciplinary service line teams co-chaired by VP Executive Sponsor and Physician, facilitated by Team Leader, and team membership to include those disciplines and services that support service line success. Expand team skills to synthesize data from various clinical and financial sources to address utilization and clinical variation. Develop service line dashboards to identify, track and trend opportunities and re-measure implemented projects. Address new product entry parameters and develop triage criteria to route initiatives. Establish regular channels of strategic communication.
Migration of Teams to Total Cost of Care
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Example of Current State Value Analysis Team Structure
Value Analysis Steering
Committee
Peri-Op VAT
Patient Care VAT
Cardio-Imaging
VAT
Support Services
VAT
Admin VAT
Value Analysis Coordinator
Future State Service Line Structure
Value Analysis Steering
Committee
Ortho/ Spine
Service Line
C-V Service
Line
Patient Care Team
Support Services Team
Women / Children Service
Line
Surgical Services
Oncology Service
Line
OPS
New Technology and Innovation
Ass
essm
ent
Implem
entation
Ancillary Services Team
Service Line Teams
Physician Co-Leadership
Value Analysis Coordinator
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Incorporate New Technology and Innovation Physician and executive led new technology and innovation committee
• Triage • Research • Cost
analysis • Objective
summary
SLT Assessment
• Review findings • Peer review • Decision
New technology and innovation • Implementation
plan • Monitor outcomes
SLT Implementation
Supports capital, strategic planning, purchasing, IT and service lines
Team Leadership and Governance
Executive Sponsor – VP or Service Line Leader
Physician Co-leader
Team Leader – Department Manager or Business Manager
Service Line Committee Structure
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Service Line Committee Structure Membership to include all disciplines that interact with a patient throughout the course of their care both inside and outside the hospital. Contract Managers
Department Managers
Nursing Staff
Case Management
Quality
Education
Radiology
Laboratory
Pharmacy
Finance
IT
Reimbursement
Biomed
Clinicians – WOCN – ICP
Physician Offices
Home Health
Rehab
Clinics
Achieve accountability at VP level
Review financial reports compared to goals and budgets.
Agenda for monthly Steering Committee – Volume and profitability
– Accomplishments and pipeline: supply, clinical, operational and financial improvements
– Impact on cost per case
– Declined initiatives and rationale
– Remove siloes to enhance transitions of care
– Identify barriers
Accountability
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Support services – Controllable costs per adjusted admission
Patient care – CMI adjusted variable cost per case for all medical DRGs
Surgical services – Surgical CMI adjusted supply cost per case
Ancillary services – Contribution margin percentage
Cardiovascular, oncology, women’s, ortho and spine – Contribution margin percentage
Goal Measurement for New Teams
New products, technology, services and capital
Evidence based consistent methodology
Consider utilization, variation, consumption, need and waste
Use financial discipline for decision-making
Consider alternative payment models
Include transitions of care, LOS and readmissions and post acute care
Physician co-leader not just for messaging to physicians
Functions of New Service Line Value Analysis Teams
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Exploring Cost per Case
Dr. Newtech has requested to trial an optical trocar for laparoscopic hysterectomy.
He learned about it from a colleague at another hospital.
The hospital is 80% standardized with Applied Medical and 20% Covidien.
The new trocar is more costly than the current product and from a different vendor.
Physician Preference Item Request
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Product Application How is it used?
Bladeless Trocars • Separates fibers versus cutting tissue • Reduces risk of tissue/organ injury
Blunt Trocar • Hasson – Uses a cut down technique-safer for the umbilical area • Balloon Tip – Inflates a balloon to prevent trocar from slipping out
Optical Trocar • Blade that cuts with a visual guide for placement • Reduces risk of injury to tissue and organs
Reposable Trocar • Allows hospitals to reuse some of the parts to save expenses • Obturators and cannulas are reusable
Various Surgical Approaches for Hysterectomy What procedure will Dr Newtech use this for?
Abdominal Hysterectomy
Vaginal Hysterectomy
Laparoscopic Hysterectomy
Laparoscopic Total Hysterectomy
Laparoscopic Supracervical Hysterectomy
Laparoscopic Assisted Vaginal Hysterectomy
Robotic Approach
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Total Laparoscopic Hysterectomy
CPT 6841 DRG 742-743 Avg. LOS 1.58 days* Avg. reimbursement
§ With CC/MCC $8031 § Without CC/MCC $5240
§ Less intraoperative bleeding § Shorter hospital stay § Faster recovery § Lower infection rates
The Surgical Services Value Analysis Team (or Women’s Health Service Line Team) will coordinate the DRG review for cost savings opportunities and practice variation.
Patient population will be normalized to include only patients discharged to home. Oncology patients are excluded.
The data to be analyzed will include: – Clinical application and properties of trocars – Trocar cost analysis and contracts – Physician trocar practice and preferences – DRG profitability by physician – Variable cost of OR supplies and ancillary services – Quality and safety measures for Laparoscopic Hysterectomy – Clinical evidence based practice and leading practices
Project Scope
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Be prepared with accurate, in-depth clinical and financial data
– By procedure and physician
Quality of outcomes
Utilization patterns and compliance with care protocols
Cost of care
Understand variation
– Over time
– By facility
– By physician
The Importance of Data-driven Decisions
Case Study Goals
Value Analysis
Improve Outcomes
Manage Cost
Reduce Variation
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Stakeholders
Supply Chain Analysis
Trocar Utilization and Contracts
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Summary of All Trocar Usage
VENDOR CAT # ANNUAL USAGE
COST / EA SPEND
Applied Medical
12 SKUs 4774
$20 - $62 $130,262
Covidien 4 SKUs 300 $73 - $121 $30,272
Applied Medical is prime vendor at 80% with Covidien at 20%.
Cost Impact of Request
Current State • Applied Medical Hasson Trocar
COR47 • 12mm x 100mm • 180 / year • $30.96 • $5,573 annual spend
Future State • Ethicon Optical Bladed Trocar
B11LTH – off contract • 11mm x 100mm • 180 / year • $205.79 • $37,042 annual spend
Dr. Newtech did 180 Laparoscopic Hysterectomies last year Conversion increases procedural cost by $174.83 per case. Conversion increases hospital spend by $31,469 annually.
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Trocar Vendor Cross-Reference Current Trocar Volume Applied Medical Covidien Ethicon
Descrip9on Mfg Cat# U/M Order Cost Qty Cost/EA Spend Cat # Cost/EA Spend Cat # Cost/EA Spend Cat # Cost/EA Spend
TROCAR SET 5MM X 55 Dual Pack Applied Medical CTR14 Bx/10 $280.00 40 $ 28.00 $11,200.00 CTR14 $ 28.00 $11,200.00 NBFCA5SH $ 41.36 $ 16,544.00 B5ST $ 48.74 $19,496.00
TROCAR, BLUNT, BALLOON 11 X 100MM Applied Medical CFR33 Bx/6 $198.08 3 $ 33.01 $594.24 CFR33 $ 33.01 $594.18 NB11STF $ 36.29 $ 653.22 B11LT $ 58.94 $1,060.92
TROCAR, BLUNT, BALLOON 12 X 130MM Applied Medical C0R50 Bx/6 $180.00 18 $ 30.00 $3,240.00 C0R50 $ 30.00 $3,240.00 No match $ 3,240.00 No match $3,240.00
TROCAR, HASSON 12 X 100MM Applied Medical C0R47 Bx/6 $185.76 172 $ 30.96 $31,950.72 C0R47 $ 30.96 $31,950.72 NB12STF $ 36.29 $ 37,451.28 H12LP $ 76.70 $79,154.40
TROCAR, OPTICAL, BLADELESS, Fios 12 X 100MM Applied Medical CFF73 Bx/6 $180.00 61 $ 30.00 $10,980.00 CFF73 $ 30.00 $10,980.00 No match $ 10,980.00 No match $10,980.00
TROCAR, OPTICAL, BLADELESS, Fios 5 X 100MM Applied Medical CFF03 Bx/6 $120.00 60 $ 20.00 $7,200.00 CFF03 $ 20.00 $7,200.00 NB5STF $ 42.32 $ 15,235.20 B5LP $ 34.51 $12,423.60
TROCAR, OPTICAL, BLADELESS, THREADED 12 X 100MM Applied Medical CTR73 Bx/6 $185.76 145 $ 30.96 $26,935.20 CTR73 $ 30.96 $26,935.20 NB12STF $ 36.29 $ 31,572.30 B12LT $ 45.67 $39,732.90
TROCAR, OPTICAL, BLADELESS, THREADED 12 X 150MM Applied Medical CTF71 Bx/6 $180.00 15 $ 30.00 $2,700.00 CTF71 $ 30.00 $2,700.00 NB12LGF $ 52.65 $ 4,738.50 B12XT $ 70.44 $6,339.60
TROCAR, OPTICAL, BLADELESS, THREADED 5 X 100MM Applied Medical CTR03 Bx/6 $123.84 225 $ 20.64 $27,864.00 CTR03 $ 20.64 $27,864.00 NB5STF $ 42.32 $ 57,132.00 B5LT $ 34.51 $46,588.50
TROCAR, OPTICAL, BLADELESS, THREADED 5 X 150MM Applied Medical CTF01 Bx/6 $120.00 8 $ 20.00 $960.00 CTF01 $ 20.00 $960.00 NB5LGF $ 42.32 $ 2,031.36 2B5LT $ 45.00 $2,160.00
TROCAR, OPTICAL, BLADELESS, THREADED 8 X 100MM Applied Medical COQ19 Bx/6 $120.00 6 $ 20.00 $720.00 COQ19 $ 20.00 $720.00 NB8STF $ 38.01 $ 1,368.36 B8LT $ 40.38 $1,453.68
TROCAR, OPTICAL, BLADLESS, THREADED 15X100MM Applied Medical C0R37 Bx/6 $369.87 16 $ 61.65 $5,917.92 C0R37 $ 61.65 $5,918.40 VS101015
P $ 66.36 $ 6,370.56 B15LT $ 116.86 $11,218.56
TROCAR, VERSAPORT, BLADELESS 12MM W/ FIXATIO Covidien NB12STF Bx/6 $725.22 25 $ 120.87 $18,130.50 CFF73 $ 30.00 $4,500.00 NB12STF $ 120.87 $ 18,130.50 B12LT $ 45.67 $6,850.50
TROCAR, VERSAPORT, BLADELESS 5MM W/ FIXATIO Covidien NB5STF Bx/6 $598.44 6 $ 99.74 $3,590.64 CTR03 $ 20.64 $743.04 NB5STF $ 99.74 $ 3,590.64 B5LT $ 34.51 $1,242.36
TROCAR, VERSAPORT, BLADELESS 8MM W/ FIXATIO Covidien NB8STF Bx/6 $550.02 2 $ 91.67 $1,100.04 COQ19 $ 20.00 $240.00 NB8STF $ 91.67 $ 1,100.04 B8LT $ 40.38 $484.56
TROCAR, VERSAPORT, V2 5MM TROCAR Covidien 179094 Bx/3 $219.15 34 $ 73.05 $7,451.10 CTR03 $ 20.64 $2,105.28 179094 $ 73.05 $ 7,451.10 D5LT $ 34.51 $3,520.02
Total Spend $160,534.36 $137,850.82 $ 217,589.06 $245,945.60
Price Benchmarking
Company Name Product Description HCO Price 10% 25% 50% 75% 90% Price IndexCovidien TROCAR, VERSAPORT, V2 5MM TROCAR 73.05$ 111.88$ 112.86$ 116.13$ 118.50$ 118.50$ 06.5Applied Medical TROCAR, HASSON 12 X 100MM 177.84$ 152.06$ 159.21$ 186.00$ 284.97$ 408.50$ 38.2Applied Medical TROCAR, BLUNT, BALLOON 12 X 130MM 180.00$ 155.79$ 168.00$ 192.00$ 298.92$ 426.12$ 35.0Applied Medical TROCAR, BLUNT, BALLOON 11MM X 100MM 198.08$ 186.83$ 191.65$ 198.08$ 198.08$ 204.02$ 50.0Applied Medical TROCAR, OPTICAL, BLADELESS, Fios 12 X 100MM 180.00$ 174.00$ 186.00$ 197.18$ 209.39$ 257.71$ 15.5Covidien TROCAR, VERSAPORT, BLADELESS 12MM W/ FIXATIO 120.87$ 131.89$ 133.98$ 148.14$ 207.35$ 213.30$ 9.1Covidien TROCAR, VERSAPORT, BLADELESS 5MM W/ FIXATIO 99.74$ 123.99$ 127.56$ 154.75$ 186.66$ 192.00$ 8.04
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Utilization and Variation
Practice Variation and DRG Profitability
Total Laparoscopic Hysterectomy
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Physician Preferences for Trocars Laparoscopic Hysterectomy
Qty Price Qty Price Qty Price Qty Price Qty Price Qty Price TROCAR, Bladeless w/fixation 12 X 100MM Covidien NB12STF 120.87$ 1 120.87$ 1 120.87$ TROCAR Kit FiOS Optical Z-Thread 12 X 100MM Applied Medical CTF73 30.96$ 1 30.96$ 1 30.96$
TROCAR Hasson 12 X 100MM Applied Medical COR47 30.96$ 1 30.96$ 1 30.96$
SLEEVE THREADED 5MM Applied Medical CTS02 8.77$ 2 17.54$ 1 8.77$ 2 17.54$ 1 8.77$ 2 17.54$ 2 17.54$ TROCAR Kit Advanced Fixation 5 X 100MM Applied Medical CTF03 20.64$ 1 20.64$ 1 20.64$ 1 20.64$ 1 20.64$ 1 20.64$ 1 20.64$
159.05$ 60.37$ 159.05$ 60.37$ 69.14$ 69.14$ TROCAR COST PER CASE
Description Vendor Catalog # Cost Each
Dr. A Dr. B Dr. C Dr. D Dr. E Dr. Newtech
Evaluating DRG 742-743 Data Physician Profitability
Physician # Cases Avg LOS
Avg Cost Avg Pmt CMI
Dr A 118 2.57 $9,481 $9,619 1.10
Dr B 91 2.35 $8,263 $7,875 1.10
Dr C 100 2.25 $6,440 $6,288 1.03
Dr D 82 2.29 $6,972 $6,136 1.02
Dr E 79 2.82 $7,212 $10,346 1.10
Dr Newtech
180 2.82 $6,869 $6,577 1.04
2011 UHC National Data ALOS = 1.58 Reimbursement: $5,240 - $8,031 (with CC/MCC)
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Evaluating DRG 742-743 Data Variation in Practice – Ancillary Services
Physician Avg Anes
Avg Lab
Avg Rad
Avg Pharm
Avg Supp
Avg OR
Dr A $57 $448 $54 $1,067 $650 $3,682
Dr B $244 $240 $67 $316 $1,016 $3,034
Dr C $73 $148 $59 $392 $1,842 $2,530
Dr D $84 $317 $63 $500 $628 $3,425
Dr E $195 $252 $66 $572 $1,353 $2,390
Dr Newtech
$128 $247 $46 $574 $1,587 $2,284
"In God we trust. All others bring data.“
William Edward Deming
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Clinical Practice
What is our practice? What are our outcomes? How can we improve?
70% 45%
20% 10%
30%
30%
30% 25%
25%
30% 40%
20% 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CMS Value-Based Purchasing Program
Preparing for Shift in CMS Payment Incentives CMS continues to shift emphasis towards Outcomes and Efficiency away from Clinical Process Domains
FY2013 1.0%
FY2014 1.25%
FY2015 1.50%
FY2016 1.750%
FY2017 2.0%
Clinical HCAHPS Outcomes Efficiency
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Clinical Benchmarking Data
Clinical – Performance and improvement rates are around the 50th percentile as compared to other hospitals in the system.
Clinical - This view compares your hospital to other hospitals in your region.
Sample Hospital
Surgical Care Improvement Project
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Clinical Benchmarking Data Core Measures Associated with DRG 742-743
Analysis of Current Clinical Practice
Normothermia
Prophylactic Antibiotics
Pre-Operative Testing
Urinary Catheter Removal
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Determine current compliance to core measures.
Understand the significance of compliance.
Review current literature for recommendations to improve practice.
Review blueprints.
Determine best practices.
Compare best practices against your current order sets and policies.
Implement change and support with education and training.
Improving Outcomes
Hierarchy of Research and Evidence
Systematic Review/Meta-Analysis - summary of the comprehensive medical literature and critical appraisal of individual studies
Randomized Controlled Trials - experimental, prospective study in which participants are selected randomly and followed over time Cohort Studies - observational, prospective or retrospective; involves two groups (cohorts) of patients, one that received the exposure of interest, and one that did not Case Control Studies - observational, retrospective; involves identifying patients who have the outcome of interest (cases) and control patients Case Series/Reports- report on a series of patients with an outcome of interest; no control group is involved. Expert Opinion- clinical experience, expertise, and judgment
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Healthcare Resources
Value analysis manager/director or clinical resource
High functioning value analysis process (Intermediate Level)
Strong physician and executive leaders as change agents
Timely cost accounting and other actionable data
Consistent and timely communications
Finance and supply chain liaisons for each team
Change goals from supply based savings to cost per case savings
Lessons Learned – Must Haves
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Contact Susan Hogan shogan@vha.com for more information.
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