Hawai’i Pacific Health employed a collaborative approach to gain consensus on implementing change. SI and related data metrics were applied to supplies for various service lines across the system. Dias and her team kept a log of all contract analysis and supply utilization results, identifying standardization opportunities, documenting potential cost savings and directing clinicians to appropriate value-analysis teams in each facility for review and decisions.
Value-analysis teams (VAT) are comprised of both clinical and supply personnel. Their review of SI data helped drive both the clinical decisions on product standardization and the selection of contracts and suppliers for purchasing products. Supply personnel led each VAT effort to ensure continuity in process and approach.
According to Dias, Hawai’i Pacific Health was able to start the process with a couple of quick, significant wins in finding cost savings in initial areas such as orthopedic and cardiac services, which would especially benefit from new approaches to supply purchasing and utilization. For example, contracts for heart valves were renegotiated based on data analysis and highly variable orthopedics product usage was brought into line.
This momentum has been sustained in other areas. To aid in Hawai’i Pacific Health’s negotiations with suppliers, MedAssets has developed a formulary guideline that indicates how much the system should pay for given products, which is then used to help frame contract discussions. Dias says when suppliers are informed that pricing outside of formulary guidelines will prevent a contract award, it often guides final pricing in a favorable direction for the provider.
Not surprisingly, the Hawai’i Pacific Health team has found standardization to be among the most difficult elements of the overall cost-reduction efforts. Physicians still have their preferred products and there’s an understandable tendency to want to meet those preferences.
However, Dias reports that sharing data analytics directly with physicians has proven to be effective in getting them to see the value of standardizing on certain products, if the quality is maintained. When data are available that show direct comparisons of utilization among physicians and hospitals and the savings that standardization brings to the entire system, physician cooperation in making those decisions has been very good.
To sustain over time the savings opportunities that have been identified, Hawai’i Pacific Health has developed a rigorous purchasing process that is applied across the system. All affected parties now understand the process for capital budgeting and each major purchasing decision is carefully reviewed by the supply chain team and must be approved by senior-level management.
Suppliers must acknowledge and sign off on Hawai’i Pacific Health purchasing policies before gaining access to the system’s facilities and those who wish to introduce trial equipment or other items requested by clinicians must complete a purchase request.