One of the biggest concerns hospitals grapple with today is finding ways to cut costs and improve their operating margins.
And this is in the face of mounting challenges, from substantial investments in technology amid an evolving reimbursement environment, to increased employment costs.
Additionally, government and private payers are increasingly demanding that providers address the total cost of care, rather than just care delivered, as concerns about high healthcare costs have never been more prevalent.
To confront these issues, and in an effort to position themselves for success, hospitals have moved to instill a data-driven approach to everything they do. This is particularly true when it comes to how they evaluate purchasing decisions for everything from employee badge holders to medical devices to capital equipment.
More and more, decision-making authority is being shifted away from doctors, nurses, and service line managers and placed in the hands of Value Analysis Committees (VACs). The primary focus of these formal committees is to ensure that every product purchased provides a unique value proposition.
VACs receive product input from many hospital departments and consider a variety of factors, such as clinical outcomes, product quality and comparison, education, and financial analysis in their decisions. By assessing different perspectives, VACs create a more inclusive and comprehensive evaluation process, reducing supply chain silos.
However, considering the fact that these committees make critical decisions about which medical devices are available at each hospital, there have been questions surrounding how much value VACs actually offer.
Here are five ways VACs help hospital procurement improve the operations of these establishments.
Data Gathering
Through VACs, determining the clinical efficacy of a product is now a collaborative effort with clinicians from various departments (nursing, physician, infection prevention, etc.) working together to ask the critical questions necessary to thoroughly vet a product. Each comes to the table with a unique perspective on how a product will affect the patients it serves.
Additionally, many value analysis efforts now include customer shadowing. This means that VACs talk to customers to gain an understanding of certain things, like why certain features are used, how often a product is used, and what patients the product is used on.
Data gathering is an integral part of the decision-making process. By taking the time to vet products, be it something as individually low-cost as an employee badge, or a major investment like robotic surgical instruments, VACs can save hospitals hundreds of thousands of dollars in purchasing something that either doesn’t meet their needs or isn’t hyperfocused on improving patient care outcomes.
Preliminary Negotiations
This involves discussing product data analysis along with product utilization, thorough cost analysis, and whether the product requires an evaluation.
VACs then determine a list of possible vendors, identify who is on their group purchasing organization contract, engage the possible vendors, establish pricing and service requirements, and obtain preliminary pricing. Then, they determine whether a Request for Information (RFI), Request for Proposal (RFP), clinical trials, and/or a site visit are necessary.
Recommendations or Final Decisions
VACs either have the power to make the final purchasing decision, or they make a recommendation to a higher authority, such as a VAC steering committee or the C-Suite.
At this stage, if the determination is to purchase, the vendor and hospital come to an agreement on pricing, the final terms and conditions, shipping and payment, the warranty and on-going clinical support, service support, and service response times.
Product Implementation
Purchasing a product is only part of the equation. The key to truly achieving the clinical benefits of a product lies in the implementation plan that VACs create.
This consists of:
- Communication methods to the staff
- Training schedules and processes
- Rollout processes that include tasks, due dates, accountable parties, feedback collection, and progress review meetings
- A pre-conversion meeting to evaluate the implementation plan and to schedule subsequent reviews
Best-in-class VACs remain involved in every step of implementation, “quarterbacking” all moving parts to ensure that no one is left out and no issue goes unresolved.
Product Validation
Validating the original decision to purchase a product with some type of data is essential. During the product validation step, VACs assess the results of a product by surveying its internal stakeholders and documenting the projected savings and clinical or operational results.
In addition, they document vendor performance for future requirements, as well as report their results to senior hospital leadership.
The need for hospitals to continually improve operational efficiencies, while decreasing costs, is now the standard.
Through in-depth data gathering, thorough preliminary negotiations, detailed final recommendations, decision-making backed by hard data, comprehensive product implementation, and meticulous product validation, VACs don’t just enhance procurement and help to yield a significant return on investment. These committees help hospitals reach a much higher level of efficiency and achieve healthcare savings goals, which in turn, helps them provide better, more cost-effective care and improved patient outcomes.