The Value Analysis department is a relatively new division in many healthcare organizations. Its mission is twofold: to ensure that a facility's processes are of superior quality and that these processes are financially appropriate. Examples of value analysis projects include:
- product-centered—prompted by quality or financial triggers, such as those related to I.V. tubing, spinal implants, or continuous renal replacement therapy machines
- utilization-centered—initiated by quality or financial triggers, such as the number of computed tomography (CT) scans ordered per diagnosis-related group, the number of STAT versus routine lab tests ordered per physician, or the number of fecal management systems used per nursing unit
- efficiency-centered—generated by quality or financial triggers concerning time-sensitive processes, such as the time it takes to obtain a CT scan for a suspected stroke or to turn over an OR suite, or the number of items a nurse has to add to a custom procedure pack.
At the Virginia Commonwealth University Health System (VCUHS), value analysis had its beginnings in the Supply Chain department, chiefly concerned with the costs of medical supplies and equipment. Eventually, the department became involved in studying utilization of supplies and equipment. This expansion brought them into the area of clinical practice/preference, not just products. The value analysis facilitators (VAFs) are RNs with extensive clinical experience, which enables them to speak the language of the clinicians with whom they deal, understand the clinicians' priorities, and represent their points of view. The VAFs also have advanced degrees and management experience, enabling them to correspond with the business and financial professionals who make up the flow of the health system's departments.
We'll examine two product-centered projects undertaken by VCUHS VAFs that were triggered by different sources. The first, pulse oximetry, began with a financial motivation but also included a quality dimension. The second, Huber (noncoring) needles, began with a quality/safety goal, but also had a financial effect. Regardless of a project's stimulus, the mission of a value analysis remains the same: ensure processes are both financially advantageous and quality driven.
Value enhancement: Pulse oximetry
The first step in a value analysis project is an assessment of current status. This assessment comes in two phases. The first is a financial and statistical view of the existing landscape. Mining the data—a skill required of an effective VAF—showed that VCUHS was purchasing about 140,000 pulse oximetry disposables annually. This volume equated to approximately $1.2 million in annual expense. The first trigger for this project was financial: Was there a cost savings to be had?
A report of monthly usage can be helpful in determining purchase patterns, especially in relation to census fluctuations. Normalizing the volume by including the census statistic of equivalent patient days (EPDs) allows viewing of trends to remove the potential skew of a constantly changing patient volume. EPDs are used when a project involves both inpatients and outpatients.
The next phase in the assessment is a clinical examination. This included interacting with the Clinical Engineering department to investigate the volume and severity of any reported performance issues related to the current products/equipment. Individual clinicians were asked about their experience with the product's efficacy and reliability.
At VCUHS, there are several clinical committees that have value analysis as a standing agenda item to discover clinician feedback. As a Magnet® institution, VCUHS requires direct care nurses to participate in these decision-making committees. This philosophy translates well to value analysis by allowing caregivers to have a voice in deciding which products they use, a method that's both empowering and efficient. Using these lines of communication, it became clear that many departments had old pulse oximetry machines or they had never replaced the ones that no longer functioned. So, a secondary trigger for the project was the quality of the health system's current machinery: Could it be improved?
The next phase of the project is to answer the first of three questions: “What's the problem we're trying to solve?” The answer was simple: promote cost savings while enhancing or maintaining quality. In this example, the clinical efficacy of the disposable items wasn't deficient, so maintaining at least the same level of clinical performance while enhancing the performance of the machinery was the only caveat.
By working with physicians, nurses, and respiratory therapists, the VAFs were able to facilitate a thorough examination of the pulse oximetry options on the market. These clinical evaluations involved many steps facilitated by the VAFs before using the product, including legal liability protection for trial product defects or equipment malfunction, compliance with regulatory guidelines for trialing products at “no charge” to the institution, and ensuring appropriate training and competency. This clinical evaluation helped answer our second question: “How will this project/product help us solve the problem we've identified?”
The product examinations by the clinicians uncovered newer technology that promised faster responses and better wireless communication. During this clinical evaluation, the VAFs worked on negotiating pricing, quality enhancements, and “value-adds” from each company. The resulting choice of product included clinician preference and cost-effectiveness.
The last step in a value analysis project is to evaluate the effectiveness of the intervention. This involves answering the final question asked of all projects: “What data will we use to measure the outcome?” In this case, it was evaluating the decreasing cost and monitoring utilization trends and performance. After any project's conclusion, VCUHS VAFs run regular reports to determine the financial savings realized and assess any changes in utilization patterns. This second item is critical because a truly positive return on investment can't happen if the utilization increases due to product deficiencies. In other words, paying less per item, but using more because the items don't work well, isn't actually saving money and it inconveniences clinicians tremendously.
Clinical follow-up to assess the performance of the new equipment is also necessary. Assessing the quality of the new machinery, education provided, and timeliness of installation must occur. In this case, all went smoothly. The clinicians reported positive experiences with the updated equipment and each piece functioned as intended. Additionally, the newer equipment had a more advanced sensor platform, allowing for improved sensor reading quality. This advancement in quality can help lead to earlier recognition of concerning trends in a patient's condition, which could potentially enhance patient outcomes. The quality enhancement was appreciated by the clinicians and helped generate a positive reputation for the Value Analysis department.
The pulse oximetry project netted the facility a savings of more than $100,000 for the first year, with a cost avoidance of an equivalent amount anticipated each subsequent year during the 5-year vendor contract. VCUHS counts cost savings only as a 12-month measure, any impact after that is considered avoidance. For example, if a project decreases the expense of a department by $1 million, that amount can then be removed from the department's budget for the next year because it won't be needed. However, in a multiyear project, that amount can't be removed from the department's budget year after year.
Improving quality: Huber needles
An example of a value analysis project triggered by quality, rather than cost, involved noncoring needles. In this case, nurses were experiencing needle sticks when withdrawing Huber needles from implanted central venous access ports. These ports are typically placed to provide large venous access for chemotherapy and blood draws for cancer patients. They can often remain in a patient for many days, requiring clinicians to use a considerable amount of force when removing them. VCUHS nurses averaged a needle stick from this process about six times annually.
Clinicians evaluated a different option that worked in a different way, much more like an I.V. catheter than a needle. After accessing the port, the needle is removed, leaving a blunt plastic cannula in place for medication administration or blood collection. Deaccessing the port didn't present the same sharps-injury risk even if the needle was “stuck.”
The same three questions apply, whether the project is prompted by financial or quality reasons. The problem we're trying to solve? Needle sticks. How will this project help us solve it? A safer mechanism for needle removal. What data will we measure? Needle sticks and clinician satisfaction.
One of the project's major hurdles was the angst involved in changing clinician practice. Changing a procedure, even to make it safer, requires persistence and resolve. After 3 months of inservicing, trial and error, and more inservicing, the new product was rolled out. Even after the extended training period, some clinicians were still reluctant to move away from “the way we've always done it.”
Eighteen months after the project's conversion, only two needle sticks have occurred from Huber needles, instead of the six averaged annually with the old product—and those two involved old needles that nurses had stowed away because they didn't want to change. The data tell the story. A slight increase in cost—a little more than $10,000 annually—has eliminated noncoring needle sticks at VCUHS.
These two projects exemplify the dual role of VAFs. As clinicians with management experience, VAFs understand business and finance, which allows them to comprehend communication from different sources that would often get lost in translation. When clinicians try to explain their concerns to business departments, such as Accounting, Purchasing, or Central Supply, they can't help but use clinical language to emphasize the importance of their concerns. When business professionals express their concerns to clinicians, they, in turn, use their own language. The result is both messages being unheard or misunderstood. This is inefficient, ineffective, and can negatively affect quality and financial outcomes, as well as cause exasperation for everyone involved.
The ability of the VAFs to speak both languages, and not take sides, allows them to function as liaisons between departments to help foster empathy and teamwork to the benefit of all concerned. It also allows for honest feedback when emotion has crept into a logical decision-making process. By keeping value analysis projects data-driven and outcomes measured, the loudest voice in the room doesn't carry the day; the best outcome for the patients, staff members, and health system does.