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SLCH Announces New Value Analysis Process

Hospital

Newburgh, N.Y. -- In recent years, the management of the supply chain has been recognized as one of the few opportunities for creative administrators to reduce costs without compromising quality of care.  Effective supply chain management which encompasses Contracting, Purchasing, Materials Management, and Value Analysis (VA) has been a critical factor in St. Luke Cornwall Hospital's (SLCH) ongoing cost containment efforts. To advance this strategy, SLCH is implementing a new Value Analysis program which is a physician-led and clinically supported process covering all aspects of the organizations spend.

SLCH has contracted with the national healthcare firm Nexera Inc. to craft a sustainable business model for the organization that will evaluate all spend categories focusing specifically on product/service selection (i.e. medical devices, wound care supplies, safety products, etc.) with emphasis on evidenced-based clinical outcomes, quality, service, reimbursement, and cost resulting from the collaboration of highly engaged physicians, care givers, and management. Hospitals, like SLCH continue to shift their view of supply chain management from transactional to strategic. The SLCH contract with Nexera embodies this transition from a price-based purchasing model to one that evaluates the true intersection of cost, quality, and outcomes both clinical and financial.

According to a recent study by the American College of Healthcare Executives, hospitals will need to cut expenses by 10 percent to maintain current margins without compromising patient safety or quality. Now more than ever, hospitals need to manage their supply chain in order to gain competitive advantages in the marketplace.

Value Analysis works within the current Supply Chain structure to assess SLCH's spend by category and clinical service line by engaging staff in the strategy of service/product selection and utilization based on quality and patient outcomes. This process rationalizes the approach to service/product sourcing and utilization, and creates system-wide accountability.

Under the leadership of Gina Del Savio, MD, Associate Chief Medical Officer and Tom Gibney, CFO & program executive sponsor, St. Luke's Cornwall Hospital's organizational needs and resources will align through this value analysis process.

"Conscientious Purchasing in health care is vitally important, and requires carefully considered decisions based upon the intersection of quality, best medical evidence, patient outcomes and cost," said Dr. Del Savio. This initiative actively seeks to involve practicing physician leaders at the earliest stages to ensure the greatest value and best patient outcome at an affordable cost. As healthcare costs continue to increase, awareness of every possible expense and focus on value are keys to success.  Physicians must have input into purchasing decisions. 

Tom Gibney stated, "in order to stay on track with the margin, we need safe budget stewardship. We will actively partner with our clinicians at the bedside in our relentless pursuit of services, products and processes which contribute to success in patient care."

This new model will create a structured process that invites rational discussion and shared informed decision-making among physicians, nurses, staff members and administration.  

"It is important we align ourselves with the mission and needs of the organization," said  Sandra Monacelli, RN & Director of Value Analysis. "The goal of this process is to be decisive and quick, transparent, and have stakeholders at the table when it comes to making decisions. Our job is to construct a process with structure, analytics, and related metrics to begin dialogue with our physician partners and staff to drive value."

 Approved value analysis initiatives will include the validation of savings and the tracking of results. This process rationalizes the approach to service/product sourcing and utilization, and creates system wide accountability.

The Value Analysis program will be kicked off in May 2015. Stay tuned for more information.

Nexera Inc. is a subsidiary of the Greater New York Hospital Association (GNYHA).