strategic sourcing and value analysis decision-...

STRATEGIC SOURCING AND

VALUE ANALYSIS DECISION-

MAKING PROCESS AND TOOLS

TYLER LOEB

STRATEGIC SOURCING MANAGER

JEFFERSON HEALTH

*Any opinions contained herein are my own and not

endorsed by Jefferson or any of its employees

The Triple Aim of AHRMM

• Triple aim of cost, quality, and

outcomes from the Association for

Healthcare Resource & Materials

Management

• Provides a framework for the

decision-making process

“So there I was”…

How this got started

Compression Sleeves

Value Analysis-lead committee of

Nursing

Nurse Education

Performance Improvement

Supply Chain Logistics

Strategic Sourcing

Update clinical practice with new technology option(s)

Address clinical needs

Supplier Score = σ𝑖=110 ൫

൯

𝑅𝑀𝐻 ∗ 7 + 𝑅𝐼 ∗ 4 +

𝑅𝑁𝐻 ∗ 1 ∗σ 𝑥

𝑠

RMH=count of “Must Have” responses

RI= count of “Important” responses

RNH=count of “Nice to Have” responses

X=value of respondent score

S=number of respondent scores

Individual Decision-Making Biases

Overconfidence

Hindsight

Anchoring

Framing

Availability bias

And others…

Challenges of working in a group

Coordination

Social-Loafing

Time

Groupthink

Self-Censorship

Direct pressure

Illusions of unanimity

“Mind-guards”

Benefits of working in a group

Information sharing

Creativity

Motivation and support

Easier implementation

How we addressed the problem


൯

𝑅𝑀𝐻 ∗ 7 + 𝑅𝐼 ∗ 4 +

𝑅𝑁𝐻 ∗ 1 ∗σ 𝑥

𝑠


൯

𝑹𝑴𝑯 ∗ 𝟕 +

𝑹𝑰 ∗ 𝟒 + 𝑹𝑵𝑯 ∗ 𝟏 ∗σ 𝑥

𝑠

Importance Level

First…

Survey team members

List all relevant

considerations

Create Request For

Information questions based

on considerations

Score each question

whether it is a “Must Have”

feature or “Important”, or

“Nice to Have”

Non-financial factors used to determine selected supplier of DVT

compression therapy sleeves and pumps Importance LevelSupply Chain/ Biomed considerations

Describe your options of placement or purchase of pumps

Describe your options for repair of pumps. Is our biomed department able to

repair pumps in-house?

Product Features

What tubing length is available?

- Pump to Sleeve

- Extension tubing (if any)

What is the weight of the pump (in pounds)?

What is the battery life of the pump (in hours)?

What is the inflation pressure of the sleeves (in mm of mercury)?

What is the inflation/deflation cycle of the sleeves (in seconds)?

Does your pump feature hours worn traceability?

Does your hours worn traceability communicate directly to EMR/EPIC systems?

Value- Add considerationsIs your company willing to enter into a risk-share agreement that guarantees a

reduction in DVT rates?

Does your company offer any "green"/environmental initiatives?

Additional Company features

Please list and provide references for the largest 5 hospital systems that use your

product( especially any academic medical centers).

Does your company offer any home-care products?

Then…

Clinical factors used to determine selected supplier of

DVT compression therapy sleeves and pumps Must Have Important Nice to Have

Number of

Responses

Importance

Level

Supply Chain/ Biomed considerations

Describe your options for repair of pumps. Is our biomed

department able to repair pumps in-house?5 3 8 47

What is the turn-around time to repair pumps that have been

sent back (in days)?5 2 1 8 44

Product Features Must Have Important Nice to Have


- Pump to Sleeve 3 5 8 41

- Extension tubing (if any) 7 1 8 29

What is the weight of the pump (in pounds)? 5 3 8 47

What is the decibel noise level of the pump? 7 1 8 53

Do you offer sequential and uniform therapy sleeves? 2 6 8 14

What is the battery life of the pump (in hours)? 2 6 8 38

What is the inflation pressure of the sleeves (in mm of

mercury)?2 5 1 8 35

What is the inflation/deflation cycle of the sleeves (in

seconds)?1 4 3 8 26

Value- Add considerations

Is your company willing to enter into a risk-share agreement

that guarantees a reduction in DVT rates?4 4 8 20

Does your company offer any "green"/environmental

initiatives?2 6 8 14


Please list and provide references for the largest 5 hospital

systems that use your product( especially any academic

medical centers).

4 4 8 44


൯

𝑹𝑴𝑯 ∗ 𝟕 +

𝑹𝑰 ∗ 𝟒 + 𝑹𝑵𝑯 ∗ 𝟏 ∗σ 𝑥

𝑠

Top 10 Factors

And then…


DVT compression therapy sleeves and pumps Must Have Important Nice to Have

Number of

Responses

Importance

Level

Top 10 Factors-

Rank

Supply Chain/ Biomed considerations


department able to repair pumps in-house?5 3 8 47 5


sent back (in days)?5 2 1 8 44 9

Product Features Must Have Important Nice to Have

What is the weight of the pump (in pounds)? 5 3 8 47 5

What is the decibel noise level of the pump? 7 1 8 53 2

List the sleeve product material. 6 2 8 50 3

Does your pump feature hours worn traceability? 8 8 56 1

Describe and list the alarms that your pump will initiate. How

do the alarms display/how can clinicians determine there is a

problem? Are there any visual displays of the alarm?

6 1 1 8 47 5

How can clinicians determine what is wrong and trouble-shoot

issues when alarms go off?7 1 8 50 3

What is the decibel noise level of the alarm(s)? 6 1 1 8 47 5




medical centers).

4 4 8 44 9


൯

𝑹𝑴𝑯 ∗ 𝟕 +

𝑹𝑰 ∗ 𝟒 + 𝑹𝑵𝑯 ∗ 𝟏 ∗σ 𝑥

𝑠

Average Score

Next…


DVT compression therapy sleeves and pumps Supplier #1

Supply Chain/ Biomed considerations Score 1 Score 2 Score 3 Score 4 Score 5 Score 6 Score 7 Score 8 Average Score


department able to repair pumps in-house?1 3 2 1 2 3 3 0 1.875


sent back (in days)?-1 -2 -2 -3 -3 -2 0 0 -1.625

Product Features


- Pump to Sleeve 1 -1 -1 1 0 1 1 2 0.5

- Extension tubing (if any) 0 3 3 2 0 0 3 3 1.75

What is the weight of the pump (in pounds)? 0 -2 -2 -2 -3 -3 -3 0 -1.875

What is the decibel noise level of the pump? 0 0 1 2 1 1 1 1 0.875

Do you offer sequential and uniform therapy sleeves? 0 0 0 1 0 0 1 0 0.25

What is the battery life of the pump (in hours)? 2 3 3 3 3 1 2 3 2.5

What is the inflation pressure of the sleeves (in mm of

mercury)?2 2 0 3 3 1 2 3 2

What is the inflation/deflation cycle of the sleeves (in

seconds)?2 3 3 3 3 0 2 3 2.375

Value- Add considerations

Is your company willing to enter into a risk-share agreement

that guarantees a reduction in DVT rates?3 2 1 3 3 0 3 3 2.25

Does your company offer any "green"/environmental

initiatives?2 1 1 0 2 0 1 1 1




medical centers).

0 3 2 0 1 2 2 2 1.5


൯

𝑹𝑴𝑯 ∗ 𝟕 +

𝑹𝑰 ∗ 𝟒 + 𝑹𝑵𝑯 ∗ 𝟏 ∗σ 𝑥

𝑠

Multiply Importance Level by Average Score

Finally…

Financial Clinical (Top 10) Total

Supplier 1 1 4 5

Supplier 2 2 2 4

Supplier 3 3 1 4

Supplier 4 4 3 7

Supplier Ranks

*These Savings figures and Clinical Features scores are made up

Supplier

Like-to-Like Option

Savings

Clinical Features

Score

Top 10 Clinical

Features Score

Supplier 1 $200 1405 496

Supplier 2 $135 1900 705

Supplier 3 $110 1850 872

Supplier 4 $75 1600 655

Considerations and Limitations

Asking the right questions

You don’t know what you don’t know – what is important that we don’t know about?

Do we have all of the right people in the room?

Type of decision being made

Are there “must-have’s” or minimum thresholds?

Do respondents understand the questions and responses?

Do they care?

Interpretation of questions and supplier responses

Too much information?

Benefits

Flexibility

Fully understand why a decision was made

Rational decision-making

Understand what is important to the health system

and why

Feedback to suppliers and other end-users

Resources

Stanford University, Lindred Greer-http://worldview.stanford.edu/blog/challenges-group-decision-making-worldview-interviews-lindred-greer

“Principles of Management” University of Minnesota-Creative Commons license-http://open.lib.umn.edu/principlesmanagement/

Forsyth, D. R. (2006). Decision making. In Forsyth, D. R. , Group Dynamics (5th Ed.) (P. 317-349) Belmont: CA, Wadsworth, Cengage Learning.

“Thinking, Fast and Slow” Daniel Kahneman. Farrar, Straus and Giroux. 2011

http://worldview.stanford.edu/blog/challenges-group-decision-making-worldview-interviews-lindred-greer

Resources

Patterson, Kerry, Joseph Grenny, Ron McMillan, Al Switzler, Laura Roppe. “Crucial Conversations: Tools for Talking When Stakes Are High” 2nd Edition, 2012. McGraw-Hill.

Dan Gilbert. “Why we make bad decisions.” TED talk. July 2005 at TEDGlobal 2005. Viewed on 9/2/2017. https://www.ted.com/talks/dan_gilbert_researches_happiness

Bart de Langhe, Stefano Puntoni, Richard Larrick. “Linear Thinking In a Non-Linear World” Harvard Business Review. May-June 2017 Issue. https://hbr.org/2017/05/linear-thinking-in-a-nonlinear-world

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