Let’s face it, words have influence over us whether it be in our everyday lives or in the hospital value analysis decision making process. Certain words can cause confusion, such as “quality.” When you are using a term like “quality” and thinking that your end goal is quality, you probably assume that you will make all the right decisions. Your definition of quality could be totally different from that of your peers, the surgeon requesting that new fancy instrument, the OR Manager, the vendor representative, and the patient. That is why hanging our hat on such terms can sound great in concept, but we need to be clearer than we have ever been before on what exactly garners a decision that meets the true requirements of our customers, stakeholders, and experts.
If you have been in the hospital value analysis world for any amount of time, you know that there is a multitude of decisions that are made every day and at every VA team meeting. The goal of this article is to help clarify but also make the value analysis decision making process easier for you by giving you terms that are not subjective, can be verified, and that are true to your end goal.
1. Every Value Analysis Project Should Have a Goal or Objective – You would presuppose that every VA study has a goal but that is not always the case. If it is a new product request (NPR), the goal should be more than to just validate the product or service the surgeon is asking for. You will of course need to validate the product’s functionality and reliability, but you must also include alternatives to this and also what would happen if you kept the incumbent product (if applicable). Many value analysis decisions today are about validation but also about reimbursements which are important to organizations moving forward. NPR decisions today can make or break your VA teams.
As another example, if you are performing a cost management review and thinking that you could just switch out a product after a clinical trial review by the nursing floors, then think again. Don’t just poll these nurses to see if they “like” (like is a subjective term) the new product but instead develop a survey form that is based on meeting their requirements and have them polled on them instead. This will give you the exact details to make your final decision on.
2. Forget About the Word Quality – Quality is a subjective term through and through and has no place in the hospital value analysis world. Instead, replace quality with functionality. Every product has a primary function, secondary function, and features that all have functions themselves. If you focus on connecting the dots from the product or service you are evaluating to the exact requirements of your clinicians, then the decision-making process should be a no brainer. Remember, cost does not matter at all and should not be considered until you first match up the functional requirements. Don’t even entertain a proposal from a vendor if they don’t meet your functional requirements up front. It is just a waste of your precious time otherwise.
3. Life Cycle Cost Factors Matter – There are thousands of disposable products used throughout a hospital that are reviewed by value analysis teams on an ongoing basis. The majority of these products have a set life cycle cost or the total cost of how long they can and should be used on the patient while still providing the required functions reliably. The equation is simple: Take the total cost of the product times its intended use in patient days, ED visits, surgical cases, etc. to come up with the optimal life cycle cost.
For example, disposable pulse oximeters that cost $9.00 each and can stay on the patient for their entire hospital stay, provided it is not something overly outside the norm. Let’s take average length of stay at about 4.5 patient days. When you divide the $9 by 4.5 patient days, you will get a life cycle cost of $2 per patient day. If by chance you don’t factor in the life cycle cost usage into your value analysis study or contract conversion by projecting the optimal use or even perhaps extending the optimal use period, then you are missing a critical factor in the value analysis decision making process.
Just about every product or service is now reviewed by hospital value analysis teams to ensure that they are keeping costs in check, mitigating risks to the organization, validating functional requirements, and checking that reimbursements are there. These are all critical success factors that are increasingly important if you are a value analysis professional or just part of a value analysis team. Decisions become tougher every day with even more fancy words and influence tactics being employed internally and externally to sway those decisions. In order to keep your clarity of focus, you must establish your must haves in your decision-making process. I hope this helps you solidify this for you and your healthcare system.
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