“Clinical supply utilization management is still a new element that has not yet been embraced but should be considered as a new way to save big.”
Pricing is tight. Sometimes we can find a few big savings opportunities but many times we are guarding against price increases in these inflationary times. Senior leadership is always looking to find new ways to reduce costs without having to face things like major layoffs or hiring freezes. Clinical supply utilization management (CSUM) is still a new element that has not been embraced by most health systems’ value analysis programs, but they should be considering it as a new way to save big beyond price.
Origins of Savings Beyond Price/Clinical Supply Utilization Management
We have been working, coaching, and assisting healthcare organizations in value analysis programs throughout the country for years and we realized early on that there was a different type of savings that these teams were finding and saving big on. These savings opportunities were not about price but instead were about reducing waste, inefficient use, and the use of feature-rich products, as well as finding lower cost alternatives that they didn’t know were available. I could continue to add to this list, but the bottom line here is that no matter how good your pricing and standardization program is, there are still other savings that need to be systematically found and weeded out of your supply budget.
You Have Bumped Into These Savings Before
I guarantee that you and your teams have stumbled across or bumped into these types of savings beyond price before, and just like we saw, there was something different happening beyond the price norm. These are CSUM savings opportunities, but you shouldn’t just be stumbling upon them. Don’t leave anything to chance, find out where all these savings opportunities are at once and then work through them in your VA teams to gain big savings.
If you are considering taking that next big step to add a major savings element to your VA program like CSUM, then below are what your expectations should be for this type of new reporting.
Expectations for Clinical Supply Utilization Management Reporting
1. Help You Quickly and Easily Find ALL Your Savings Beyond Price – There is no VA system that tells the VA leaders where their savings are today, tomorrow, next month, or next quarter until you implement a CSUM system. They are ongoing reporting systems that are always there. For instance, if you get caught up in implementation or resilience issues and don’t have time for CSUM studies, the CSUM system keeps updating and will be ready when you are. It is ongoing.
2. Understand Where Your Savings Are and Why – Benchmarking things like your Cath Lab Procedure Cost being $235 higher than your cohort peers is okay, but what do you really do with that information? There is a multitude of products that get used during a Cath Lab case. But if we tell you that you are running 35% over in balloon catheters and your stents are 21% higher than your peers plus your Cath Lab custom packs also increased by 42%, then you have specific areas to work on. Just saying that you can save a big number in a broad category does not help anyone in VA. We need better details to drill down on.
3. It’s Not Going to Create a Bunch of Work for You – Most think that if they implement a CSUM program and it shows all these savings, which it will, their CFO will catch wind of it and want all the savings right away, thus, creating a major issue. This is not the case. CFOs and you should train your VA teams to understand this and to realize that this is not just about implementing a new product to get a better price. This is analyzing clinical habits, use patterns, cohort benchmarking, and alike, all while communicating, coaching, nudging, and training the departmental leaders on how to implement your found CSUM savings. This will take time and will not happen overnight, which is why you need to start now.
4. Provide a Path for Analyzing and Mitigating the Risk to Your Bottom Line – VA teams need a path to work through. They need to digest all the information about the product categories they are studying. Having this information in hand and looking at it from several different angles, such as year over year, cohort benchmarking, and historical benchmarking, will give them a 360-degree view. With this, VA can harness their functional approach and knock out big savings quickly and easily.
5. Monitor and Track Current and Past Savings to Ensure Sustained Savings – Nobody truly monitors savings after the fact correctly. They may compare here and there to a spend report, but if the patient volume went up or down dramatically, this does not tell the true story. CSUM as an ongoing system that is part of your VA program continually tracks everything for you automatically. There is no guess work and no pulling data, you would simply look at your CSUM reporting system.
6. Volume Metrics Eliminate Lip Service Excuses – As I always say, everyone is for saving money until it comes to their department’s front door. It is just human nature that we fight against any and all changes unless we as the departmental leader actually initiate the change. When you use patient volume centric reporting, this eliminates the excuse that their department was very busy during that month, quarter, or year. We will have already factored that in and once they know this, you can talk turkey with them.
Make Savings Happen with Clinical Supply Utilization Management Reporting
The time has come for healthcare organizations to finally “wring the towel dry” on savings that are just sitting there waiting to be found. This is savings beyond price, so you are not going to see it just by running a spend report from your GPO. You need a better mouse trap. Once you have this better mouse trap, you call the shots. You become the strategic mastermind and make the savings happen on your terms. Start planning today!
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