The Healthcare Hub

Healthcare Supply Chain at the Intersection of Cost, Quality and Outcomes

Thursday, November 29, 2018

In 2013, around the same time that value-based purchasing and alternate payment models hit the healthcare scene, the Association for Health Care Resource & Materials Management (AHRMM) launched its Cost, Quality and Outcomes (CQO) Movement, which frames the new role that supply chain professionals play in today’s value-based healthcare environment.

The advent of CQO has challenged stakeholders to look at supply chain in a new way. Whereas “materials management” was often seen as a tactical function in the hospital’s basement, the role of supply chain brings value to the hospital and clinicians in order to improve the patient experience. Supply chain today must evaluate purchases more holistically. It’s no longer sufficient to just look at the cost of a product or service, but to look at the value it can deliver in terms of patient outcomes.

In order for supply chain professionals to evolve their roles from cost management to value management, there must be clinical integration within the supply chain. Clinicians and supply chain team members must collaboratively come to the table and share information so that they can make holistic decisions — ones that are evidence-based versus preference-based — for the benefit of better patient outcomes.

At the 2018 GHX Summit, Bob Taylor of RWJBarnabus Health spoke about how their organization is standardizing clinical practices and associated supplies for substantial savings and better patient outcomes.

RWJBarnabas established 22 collaboratives across the enterprise focused on improving value, each of which has supply chain representation. Over the course of about 18 months, the health system implemented nearly $2M worth of savings through these collaboratives by standardizing clinical practices and the supplies associated with them.

The benefits achieved went beyond cost to drive greater quality and outcomes for patients and the health system. An example of this approach was a collaborative on blood management. The collaborative members first reduced the cost of blood product procurement through strategic contracting and during this process an opportunity was identified to reduce the number of cases where blood was being administered.

Using clinically appropriate data and analytics, the collaborative’s dedicated physician leadership established new protocols for blood administration that safely reduced the number of instances for blood transfusions. These efforts saved the health system between $3-$5M per year on blood products and also conserved blood, a scarce resource, which improved supply availability for everyone in the community.

“Our patients are in the middle of everything that we do, and it is in their best interest that we improve cost, quality and outcomes. As the role that sits at the intersection of these three things, supply chain must be involved in these efforts,” Bob Taylor, SVP Supply Chain, RWJBarnabus Health.

The collaboratives established at RWJBarnabus Health support the vision of the 2018 AHRMM CQO report on the clinically integrated supply chain. In addition, the success of this strategy for both cost saving and patient care recognizes the importance of cross-functional collaboration in the CQO movement.

Join us at the 2019 Summit to hear more success stories that support the CQO movement. Take advantage of early registration and save now!