When consumers buy expensive products, such as a car, they tend to look to publications and websites that help them help rank the pros and cons of their intended purchase. However, for healthcare finance leaders there is no centralized way to rank vendors or products in terms of quality and cost, which is why some providers are creating their own ranking methods.
In years past, much of supply-chain management strategy meant contracting for supplies at the lowest possible cost; however, as quality initiatives take center stage, now healthcare leaders are turning to a clinical quality value analysis to guide them. CQVA uses an evidence-based process to evaluate the clinical value of products and considers not only the cost, but also quality and safety of an item.
Mike Hildebrandt, associate vice president of supply chain at Scottsdale (AZ) Healthcare knows well the value of using a CQVA. With a net revenue of $2 billion, the three-hospital system has been using this approach for two years and the process has saved an estimated $12.5 million in audited savings, with another $5 million to be realized in the next few months.
With an ever-growing number of medical products, technologies, and services, healthcare organizations, such as Hildebrant’s, are establishing multidisciplinary teams to review specific items to ensure that they are a good fit for patients, physicians, and the organization as a whole—from both a clinical and cost perspective. These teams use a value analysis process to look at products in an objective, standardized manner based on their overall needs.
The team consists of members from a variety of departments, depending on the items being reviewed, and may include anyone from the CFO to the chief nursing or medical officers to the cleaning staff or an outside consultant to provide a larger, comparative view. According to VHA, a cooperative that works with nonprofit healthcare providers, when its members use a CQVA, they see a 5% to 25% supply cost reduction.