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Transcript of Partnering with IDNs for Efficiency and Innovation Moderator Patrick Carroll, President, Patrick E....
Partnering with IDNs for Efficiency and
Innovation
ModeratorPatrick Carroll, President, Patrick E. Carroll & Associates, Inc.
PanelistsDavid McCombs, VP ERP/Supply Chain Operations, Bon Secours Health System
Tony Benedict, CPIM, CIO, Vice President Supply Chain, Abrazo Healthcare
Raymond J. Seigfried, MA, Senior Vice President Administration, Christiana Care Health System
Healthcare Reform
Federal health care reform is the result of the March 2010 enactment of the Patient Protection and Affordable Care Act (PPACA) as amended by the Health Care and Education Reconciliation Act
These two laws are commonly referred to together as PPACA, the Affordable Care Act (ACA) or health care reform
Mandates become effective over several years. While health care reform is now law, many implementation details remain unanswered and will be clarified by future regulations and guidance
Reform Impact on Providers
Insurance Coverage Bundled Payments for Episodes of Care Pay for Performance Market Basket Updates Expansion of Medicaid Primary Care Funding Disproportionate Care Accountable Care Organizations Hospital Acquired Infections Preventable Readmissions Device Taxes
The Response from IDNs
Improve operational performance Changing decision-makers and influencers Physician consolidation and integration IDN/Hospitals mergers and consolidations Significant changes in the Care Model to create
value Capital/Cash investments redirected Elevate role, responsibility and expectations of
Supply Chain Management
4
The Healthcare Supply Chain
Extremely heterogeneous marketplace The playing field is not level
Advanced Supply Chain Executives Focus on Value Focus on partnerships with suppliers
Middle Level Supply Chain Executives Focus on Cost Preliminary discussion of partnerships with
suppliers Lower Level Supply Chain Executives
Focus on Price The supplier is “tolerated”
5
Value Based Competition
Bon Secours Health System, Inc. IDN Panel: Partnering with Suppliers for Efficiency and Innovation
Presentation Objectives
Review four major issues that will impact our future Supply Chain model and relationship with Suppliers:
1. Physician Preference Item (PPI) procurement will move from Contracts to more disciplined Formulary Models to insure optimal clinical outcomes and cost predictability
2. Supply Chain Logistics and Value Optimization Strategies must be integrated across the entire continuum of care
3. Supply Chain must directly support optimizing the Provider’s performance under Value Based Purchasing models
4. Progress toward Global Data Synchronization is critical for provider/supplier transaction efficiencies and data transparency
Profile of Bon Secours Heath System
Good Help to those in Need
Key Trends for Bon Secours Health System
1. Continued movement to centralization and standardization of all support functions
2. With EPIC installation nearing completion, movement toward standardized care and “hard wired” process/protocols in all locations
3. Aggressive participation in ACO and population health risk
• Medicare Shared Services Plan• Covers all BSHSI Acute Service
markets in five states• 57,000 beneficiaries as of January
2013• Partnership with Aetna, community
and employed Physicians, other acute non-BSHSI hospitals
Key Issues for BSHSI Supply Chain Partnering with Suppliers for Efficiency and Innovation
1. Physician Preference Item (PPI) procurement will move from Contracts to more disciplined Formulary Models to insure optimal clinical outcomes and cost predictability
Implant Formulary Definition: The main function of the Implant Formulary is to specify specific implant products that are approved for physician use within a facility . Implant products are grouped into functionally equivalent classifications. Within the classification implant products are authorized for use based on evaluation of efficacy, safety, patient outcomes and cost-effectiveness.
Differences of a Formulary and Contract Model:Formulary Contract
Same terms, definitions and provisions for change for all vendor purchase agreements for formulary items
Separate agreement for each vendor with distinct terms , definitions , changes
All items classified into functionally equivalent groupings; items evaluated in context of benefits as compared to equivalents
Each vendor item considered unique and evaluated separately
Includes only authorized items that meet evaluation criteria
Includes full or selected portion of catalogue
All items must go through new product classification and Clinical Value Analysis
Fairly “open” process for addition and conversion of new item versions
Ongoing review of utilization, cost and outcomes at procedure and physician level
Review of purchase volume as compared to committed volumes
Implant Formulary Design example – Spine hardware; other PPI products include Total Joint, Biologics, Cardiovascular products, Specialty Surgical devices
BSHSI Implant Formulary Model - Spine
80,000 Individual Items 36 Vendors
Cervical Spacer/Cage SP-Cerv SpacerInterbody fusion device - Anterior SP_ALIFInterbody fusion device - Direct Lateral SP-ALIFLInterbody fusion device - Parallel SP-PLIFInterbody fusion device - Transforaminal SP-TLIFPlate, Cervical Anterior - 1 level SP-Cerv Plt 1 lvlPlate, Cervical Anterior - 2 level SP-Cerv Plt 2 lvlPlate, Cervical Anterior - 3 level SP-Cerv Plt 3 lvlRod < 300mm straight/lordosed/bent SP-Rod < 300Screw Pedicle, Poly/Multi- axial SP-Ped MultiScrew Pedicle, set/locking screw/cap SP-Ped LockScrew, Cervical SP-Cerv ScrewCrosslink/Crossbar SP-CrosslinkCrosslink/Crossbar set/locking SP-Crosslink LockPlate, Cervical Anterior - 4 level SP-Cerv Plt 4 lvlPlate, Cervical Anterior - 5 level SP-Cerv Plt 5 lvlPlate, Cervical cover SP-Cerv Plt CovPlate, Lumbar SP-Lumb PltPlate, Lumbar cover SP-Lumb Plt Cov
Spine Construct Definition
Screw, Cervical
Any screw used to secure cervical plates to cervical vertebrae; Including but not limited to self-drilling, self-tapping, cancellous, cortical, locking, cannulated, translational, domed, transitional, semi-constrained, fixed or variable angle, washers, nuts, set screws, etc.
Plate, Cervical 1-3 Levels
One, two, or three level translating and fixed plate; including hole covers, integrated locking mechanisms and all materials
Plate, Cervical 4+ Levels
Four + level translating and fixed plate; including hole covers, integrated locking mechanisms and all materials
Plate, Occipital Translational single and multi-level plate (2 and 3 levels) involving C1; includes hole covers includes integrated locking mechanisms and all materials
Screw, Lumbar
Any screw/bolt used to secure anterior, posterior or lateral plates to Thoracic-Lumbar-Sacral vertebrae; including but not limited to self-drilling, self-tapping, cancellous, cortical, locking, cannulated, translational, domed, transitional, semi-constrained, fixed or variable angle, washers, nuts, set screws, etc.
Plate, Lumbar
Any anterior Thoracic-Lumbar-Sacral plate - includes anterior single or multi - level plate and cover if applicable; excludes Buttress plates
Plate, Posterior or Lateral
Any posterior or lateral plates for Thoracic-Lumbar-Sacral fixation(i.e. Arch, Core)
Buttress Assembly Includes any buttress plate & screws or staple assembly
Hooks and Offset Assembly
Includes any fixed-angle, posted or monoaxial hook or offset assemblies including all washers, nuts, collars, off-sets, locking caps, blockers, set screws, etc. required for the assembly and / or attachment of the hooks offsets to the rods (or links/hooks). Includes all Anterior / Posterior / Cervical / Lumbar / Thoracic / hooks used with rods.
Pedicle Screw Assembly, fixed angle
Includes any fixed-angle, posted or monoaxial pedicle screw assemblies; screw assembly includes all washers, nuts, collars, off-sets, locking caps, blockers, set screws, etc. required for the assembly and / or attachment of the screws to the rods (or links/hooks). Includes all Anterior / Posterior / Cervical / Lumbar / Thoracic / Iliac fixed angle, posted or monoaxial screws used with rods.
Pedicle Screw Assembly, Polyaxial
Any Pedicle Screw used in conjunction with a rod (or link). Anterior / Posterior Cervical / Lumbar / Thoracic / Iliac (including multi-axial or variable angle extended tab, reduction, favored angle, fenestrated, or those used with flexible rod and cord) and dynamic screws include all washers, nuts, collars, off-sets, locking caps, blockers, set screws, etc. required for the assembly and / or attachment of the screws to the rods. Includes all multi-axial and variable/favored angle screws used with rods (or link).
77 Product Classification Codes
32 Component Constructs - Fixed Price per Construct
Implant Purchase Agreement for all vendors
(Facility)
100% Audit of every Implant Purchase Order to confirm price, data
Implant Formulary Reports, New Technology Review, Item Additions
226180 SCR SPNE PEDCL SEQUOIA 6.5X45 ABBT SPIN 3305-6545239817 SCR POLY SEQUOIA 6.5X50MM ABBT SPIN 3305-6550239818 SCR POLY SEQUOIA 7.5X40MM ABBT SPIN 3305-7540142942 SCR ANT CERV SC-ACUFIX 4X13 ABBT SPIN 402-40113142944 SCR ANT CERV SC-ACUFIX 4X13MM ABBT SPIN 402-4413142945 SCR CERV CANC THINLINE 4X14 ABBT SPIN 402-4414142946 SCR ANT CERV SC-ACUFIX 4.5X14 ABBT SPIN 402-4614142934 CLOSURE TOP LOK PTHFNDR TI ABBT SPIN 2101-1169862 CONN SPNE TRNSVRS 4X35MM ABBT SPIN 721-4035169863 CONN SPNE TRNSVRS 4X40MM ABBT SPIN 721-4040142901 PLT ANT CERV SC-ACUFIX 2LEV 34 ABBT SPIN 1703-2034142902 PLT ANT CERV SC-ACUFIX 2LEV 36 ABBT SPIN 1703-2036142903 PLT ANT CERV SC-ACUFIX 2LEV 38 ABBT SPIN 1703-2038142904 PLT ANT CERV SC-ACUFIX 2LEV 40 ABBT SPIN 1703-2040142905 PLT ANT SC-ACUFIX 2 LEV 42MM ABBT SPIN 1703-2042142906 PLT ANT SC-ACUFIX 2 LEV 44MM ABBT SPIN 1703-2044142907 PLT ANT SC-ACUFIX 2 LEV 46MM ABBT SPIN 1703-2046142908 PLT ANT CERV SC-ACUFIX 2LEV 48 ABBT SPIN 1703-2048142909 PLT ANT SC-ACUFIX 2 LEV 50MM ABBT SPIN 1703-2050142910 PLT ANT CERV SC-ACUFIX 2LEV 52 ABBT SPIN 1703-2052142911 PLT ANT SC-ACUFIX 2 LEV 54MM ABBT SPIN 1703-2054142912 PLT ANT SC-ACUFIX 3 LEV 50MM ABBT SPIN 1703-3050142913 PLT ANT SC-ACUFIX 3 LEV 53MM ABBT SPIN 1703-3053142914 PLT ANT SC-ACUFIX 3 LEV 56MM ABBT SPIN 1703-3056142915 PLT ANT SC-ACUFIX 3 LEV 59MM ABBT SPIN 1703-3059142916 PLT ANT CERV SC-ACUFIX 3LEV 62 ABBT SPIN 1703-3062142917 PLT ANT SC-ACUFIX 3 LEV 65MM ABBT SPIN 1703-3065142918 PLT ANT SC-ACUFIX 3 LEV 68MM ABBT SPIN 1703-3068142919 PLT ANT SC-ACUFIX 3 LEV 71MM ABBT SPIN 1703-3071142920 PLT ANT SC-ACUFIX 4 LEV 68MM ABBT SPIN 1703-4068142921 PLT ANT CERV SC-ACUFIX 4LEV 72 ABBT SPIN 1703-4072142922 PLT ANT CERV SC-ACUFIX 4LEV 76 ABBT SPIN 1703-4076142923 PLT ANT CERV SC-ACUFIX 4LEV 80 ABBT SPIN 1703-4080142924 PLT ANT CERV SC-ACUFIX 4LEV 84 ABBT SPIN 1703-4084142925 PLT ANT SC-ACUFIX 4 LEV 88MM ABBT SPIN 1703-4088142926 PLT ANT CERV SC-ACUFIX 4LEV 92 ABBT SPIN 1703-4092142927 PLT ANT CERV SC-ACUFIX 4LEV 96 ABBT SPIN 1703-4096142928 PLT ANT SC-ACUFIX 1 LEV 24MM ABBT SPIN 1706-1024142929 PLT ANT CERV SC-ACUFIX 1LEV 26 ABBT SPIN 1706-1026142930 PLT ANT CERV SC-ACUFIX 1LEV 28 ABBT SPIN 1706-1028142931 PLT ANT CERV SC-ACUFIX 1LEV 30 ABBT SPIN 1706-1030142932 PLT ANT SC-ACUFIX 1 LEV 32MM ABBT SPIN 1706-1032142949 PLT ANT CERV TRIMLINE 1SEG 24 ABBT SPIN 407-1024142950 PLT ANT CERV TRIMLINE 2SEG 40 ABBT SPIN 407-2240142951 PLT ANT CERV TRIMLINE 2SEG 44 ABBT SPIN 407-2244238063 SCR BNE CORT FT 4X32MM TI AESC LB472T238064 SCR SPNE BNE CORT PT 4X32MM TI AESC LB512T288094 SCR SPNE CORT 4X40MML TI AESC LB520T261353 SCR SPNE CORT PT 4X46MM TI AESC LB526T159238 SCR ANT CERV BICORT ABC 20MM AESC FJ800T146353 SCR ANT CERV BICORT ABC 21MM AESC FJ801T146354 SCR ANT CERV BICORT ABC 22MM AESC FJ802T159239 SCR ANT CERV UNICORT ABC4.5X17 AESC FJ853T146356 SCR SPNE STBL ANT MAC TL 40MM AESC SX785T146351 PLT ANT CERV ABC 6H 43MM TI AESC FJ760T146352 PLT ANT CERV ABC 12H 91MM TI AESC FJ786T190409 PLT CERV EXT ABC 2H 10MM TI AESC FJ860T
Implication of Formulary on BSHSI Vendor Relationships
Approved Formulary Vendors – Strategic Partner relationship• Continuous update of all purchase transaction data and
priority Accounts Payable and SPS customer service response• Collaborative efforts to streamline transactions, reduce
vendor inventory and minimize SGA expense• Collaborative clinical outcome studies• Vendor Access Level 1 to approved clinical areas• Direct Participation in periodic Clinician new product reviews,
CVA process
Non-Formulary Vendors – Exception-based relationship• Per case exception approval of all product used• No access to utilization data, clinical outcome data or
collaborative studies• Vendor Access Level 3 – restricted access,
appointment only• No direct participation in Clinician product reviews,
CVA process
2. Supply Chain Logistics and Value Optimization Strategies must be integrated across the entire continuum of care
Retail Pharmacy
Wellness and Fitness Center
Diagnostic/ Imaging Center
Urgent Care Center
Hospital
Acuity
Community-Based Care Acute Care
Post-Acute Care
Physician Practice Sites
Ambulatory Procedure Center
OP Rehab
IP Rehab
SNF
Home
Home Care
Free-Standing ED
Areas of Focus for Healthcare Continuum Supply Chain Integration
Key Activities for Integration:
1. Tracking utilization, cost and correlated outcomes of key supply products across the continuum
2. Focus on cost/utilization management of products/equipment that “follow” patient and support the patient through the continuum
Issues• Multiple and non-integrated product distribution processes• Need for Standardization of products across continuum• Expansion of Formularies to covered population• Elimination of waste, duplication in care transition• Pricing models/cost predictability –item, bundled, per acute
episode of care, per patient across continuum• Logistical support, distribution, procurement, patient-level
customer service• Clinical Value Analysis – New technology assessment, outcomes• Equipment – Total Cost of Ownership, inventory management
Medicare Value Based Purchasing FY’16 Measures
17
HCAHPS = 25%
Outcomes = 40%
Core Measures = 10%
Efficiency = 25%
3. Supply Chain must directly support optimizing the Provider’s performance under Value Based Purchasing models
Impact of VBP Measures on Supply Chain
1. HCAHPS – 25% • Unacceptable for patient to experience changes of direct
supplies during care transitions ( trach, lines/ports, Ortho soft goods, etc.)
2. Core Measures – 10%• Supply Chain logistics must support 100% compliance to
care process protocols (timeliness of intervention, supply packs, etc.)
3. Outcomes – 40%• Only products that have evidenced-based support for
optimal clinical outcome will be utilized
4. Efficiency – 25% ( cost per beneficiary)• Cost measured from pre-acute, acute and 30 day post
acute time period• Requires suppliers to directly assist with utilization
management and support predictive capped cost per episode of care
4. Progress toward Global Data Synchronization is critical for provider/supplier transaction efficiencies and data transparency
Key Data standards and benefits:
A. GLN: Global Locator Number• The GS1 Identification Key used to identify physical locations or legal
entities. • Requires conversion from provider/supplier unique “ship to” identifiers
and required crosswalks to standardized GLN • Critical to insure right item gets to right location and minimize any
transaction or accounting errors
B. GTIN: Global Trade Item Number• an standardized identifier for trade items developed by GS1• requires conversion from unique provider/supplier item identifiers• Critical to support tracking/analysis across many transactional and
clinical databases as well as to support transaction efficiencies ( barcode/RFID data capture, etc.)
BSHSI Global Data Synchronization Plan and Status
A. GLN Implementation Plan1. Complete internal ERP build and test of GLN for all BSHSI locations
– FY 2013, complete
2. Implement GLN with major BSHSI suppliers and Distributors – FY 2014
Status: Limited Suppliers ready to transact
Distributors maintaining legacy “ship to”
General lack of urgency
B. GTIN Implementation Plan1. Implement as first priority the FDA UDI for Class III High Risk items,
including implement process changes in all phases of business transactions and device documentation
2. Identify high-value categories of products for next phase of Implementation
Status: In early stages of assessment Challenge of supporting multiple processes as
GTIN adoption progresses
Partnering with IDNs for Efficiency and Innovation
Tony Benedict, CPIM, CBPP CIO, Vice President Supply ChainTenet/Abrazo Healthcare
Biography• 2010-Present - Tenet/Abrazo Healthcare, CIO, VP
Supply Chain• 2010-Present – Association of BPM Professionals,
(abpmp.org), President, Director, Board of Directors
• 2003-2010 – Association of BPM Professionals, VP Relationships, Director, Board of Directors
• 2006-2010 – Tata Consultancy Services, Senior Manager, Strategy & Operations Management Consulting/Outsourcing
• 1997-2006 – Intel Corporation, Supply Chain Management, Technology Manufacturing Group
• 1988-1997 – GlaxoSmithKline, Medical Center Sales
22
“The New” Tenet Healthcare
Tenet Healthcare
Service Line Feeders to Care Delivery Settings
Serv
ice
Lin
es
Care & Service Delivery Sites
Wellness/Prevention
Cardiovascular
Oncology
Women Services
Neurosciences
Orthopaedics
Bariatric / Sleep
Primary Care
Psych
Acute Care Post Acute Care
Cri
tica
l C
are
Ho
spit
alis
ts
Em
erg
ency
M
edic
ine
Su
rgic
al
Ser
vice
s
Lab
/Pat
ho
log
y
Ser
vice
s
Imag
ing
Reh
ab
Pal
liat
ive
Car
e
Drive Volum
e Clin
ical
Sta
ndar
ds
Ambulatory
Continuum of Care
25
Tenet/Vanguard Integration ChallengesTenet• 49 hospitals• GPO – MedAssets• Similar VAT
structure/processes• Supply Chain
outsourced, not “regionalized”
• High C-Suite Accountability
• Geographical regions
26
Vanguard• 28 hospitals• GPO – Premier (just
switched from HPG 1/13)• Similar VAT
structure/processes• Supply Chain insourced
and “regionalized”• Low C-Suite
Accountability• Market based “fiefdoms”
• Imperative to drive $200+ million of cost out of new organization• What is best way to structure Supply Chain in the “new” Tenet?• There are best practices in each organization, plan is to merge best, drop
worst• GPO will play role in commodities, PPI strategy going forward?
Healthcare Reform Challenges• Tsunami of Baby Boomers beginning transition
to Medicare• Cost of Healthcare increasing 2x faster than
inflation• Fee for Service model is obsolete• Implications of declining reimbursement on case
cost and profitability• Medicare provider payments will face a cut of 2%/yr
over nine years (2013-2021).
• How to bend the cost curve to remain profitable• Supply base (PPI) stuck in dollar/margin/market
share growth paradigm
27
Bending the Cost CurveSeveral opportunities in combination exist to bend the cost curve:
• Reduce acquisition costs• Bundled Payments• Disease management/Care
Reliability• Medical homes
28
IT Market DynamicsLeading Software Supplier Market Share (2000 – 2010)
29
10%
20%
30%
40%
50%50.2%
29.6%
38.2%
67.5%
2000 2010
En
terp
rise
So
ftw
are
EM
R V
en
do
rs
En
terp
rise
So
ftw
are
EM
R V
end
ors
Source: Dorenfest Institute & HIMSS Analytics Database (2011) HIMSS, “The Clinical Systems Hospital IT Market, 1998 – 2005” (2006) Scott Weiss, “The Enterprise Software Massacre” (2011)
Clinical Gaps
Risk Management
Quality
Aggregate Data Deliver Care Demonstrate Outcomes
Precision Marketing
Sustain Health
Identify Opportunities
CCDInternal Referrals
External Referrals
Web Email Text/MobileMailSocial
Communities IVRTelephonic Face-to-Face
Acquire Customers / Manage Business
Scheduling
Cost Reduction
Avoidable Events
Lab
Registry
Utilization
Remote Monitoring
MedicalClaims
Biometric
Pharmacy Claims
Revenue Cycle
Social Footprint
PHR
Mitigate Risks
Manage Conditions & Events
Analyze Populations
CRM EMR
Employer HIE
Physicians
Home Care
Communications
Experience
Extended Clinical Team
Extended Care Team
Enable Multi-Modal & Multi-Site Interactions
30
Risk Platform – Future StateComprehensive portfolio of discrete, integrated assets
AcutePhase
Surveillance/Risk mitigation
PostAcutePhase
Risk mitigation
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Physician E/M Physician procedure Pharmacy Facility Lab/X-Ray
Illustrative Care Episode
AllowedDollarsPaid
(2)
Additional acutephases may beavoided or delayed
Individualized Longitudinal Analytics Performance / Payment = Value Creation / Value Demonstration
Longitudinal analytics
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Q_12 Q_10 Q_8 Q_6 Q_4 Q_2 Q0 Q2 Q4 Q6 Q8 Q10 Q12
Serious disease
Minor Disease
No Disease
Cost Prediction AnalyticsAnd this model – chasing historical claims data – is all wrongMedical and Pharmacy Costs
Quarters before and After High Cost Event
Months before and After High Cost Event
Diabetics with Heart Failure Event
The Healthcare Supply Chain
• The future is a volume based game for supplies, the intention of ACA is to commoditize healthcare
• Suppliers need to think long term and redefine what “partner” means to IDNs and themselves
• Suppliers need to design for safety, predictable outcomes and cost, not just margin
33
Christiana Care Health System Wilmington, Delaware
Raymond SeigfriedSenior Vice President Administration
Paradigm Change
“The current system is not a health care system; it is a sickness and disability-care system. Getting rid of illness, what we don’t want, is not the same as maintaining wellness, what we do want.” Russell Ackoff 2003
Value formula that sustained volume and profit
Value = Product Quality
Price
New World Value Formula
SAFETY
QUALITYCOST
SOCIETAL BENEFIT
PatientValue =
Innovation that supports health
1. Adds value
2. Improves quality of care
3. Improves quality of life