The Healthcare Hub

How a Value Analysis Evolution Led to a Performance-Based Contract Revolution

posted by: Suzanne Smith
Thursday, July 8, 2021

When Value Analysis Director Kristin Sinke joined Michigan-based Spectrum Health in 2017, the value analysis team for the 14-hospital system consisted of herself and one other person. Within two years, she had helped create a completely centralized program comprising 14 full-time employees (FTEs), and in March 2021, the team launched its first strategic outcomes-based partnership with Medtronic, a global leader in medical technology.

During a 2021 GHX Summit Satellite presentation, Sinke and Spectrum Value Analysis Manager Amy Bertotti, discussed the steps they took to develop a more advanced and proactive system-level value analysis program. Joining them was Cori Mageley, Medtronic senior director of strategic solutions, to highlight her company’s role and commitments in creating the partnership with Spectrum. 

A Value Analysis Evolution

Sinke’s first step upon joining Spectrum’s value analysis team was to analyze the program’s maturity level across a range of factors. “[When I joined], the value analysis work at Spectrum Health was decentralized and each team ran differently than the next,” Sinke said. “Physician preference was the primary driver of the decisions. I quickly realized that we needed structure, we needed process.”

Next, she built a business case demonstrating that a centralized program would improve efficiency, increase consistency and decrease unnecessary care variation. “Senior leader support was absolutely critical at this step,” she said. “I needed leaders to not only understand the reasoning behind our work, but truly believe in the value. I was lucky enough to get that from our senior leadership team.”

With approval to add four additional FTEs, Sinke created a governance structure with clinical and operational leaders supporting specific service lines. Next, she began engaging key stakeholders, educating physicians and changing the culture at Spectrum Health. Within a year, she had realized many of her original goals.

“We were proficient at the foundational aspects of value analysis, evaluating new product requests, orchestrating trials, and product implementation, supporting supply savings projects,” she said. “But we wanted to do more and tackle some really complex aspects of value analysis.”

Upon evaluating the increased maturity of the value analysis program, Sinke and team were able to develop new strategic goals. “As our brand and credibility grew, so did the demand on our team,” she said. While the initial hires were all registered nurses, they added non-RN implementation, project and database specialists to focus on project management and analytics for a variety of value analysis, supply chain and quality improvement initiatives. By early 2021, the team had grown to 14 employees and they recognized that they had achieved optimal maturity. It was now time to turn their focus to outcomes-based savings in partnership with suppliers.

An Industry Revolution

According to Bertotti, while the Affordable Care Act has redrawn the connections between providers, patients and payers, one critical group had been left out of the equation: the supplier. “We believe that we now have the perfect equation,” She said. “The supplier is embedded within the provider and the payer and the hospital and the patient. Together, we're all looking at lowering the cost of care, improving patient outcomes and improving the patient experience.”

Bertotti outlined three high-level goals for Spectrum’s outcome-based supplier program: to innovate, impact and influence. “We know that not all suppliers can come alongside of this journey with us in the same manner,” she said. “Some suppliers might be able to embark on this journey with us for a long period of time, and they can be a long-term partner with us. Whereas some other suppliers that might be just single projects that they have the bandwidth and the resources for maybe risk-based contract or performance-based contracting.”

Spectrum’s initial partnership with Medtronic focuses on cardiac resynchronization therapy, with further initiatives on the horizon. “We hope to have at least four projects going on with Medtronic at any given time, but we want to take a step-wise approach for when we start these projects. We don't want to burden any of the teams, especially the clinical teams who are doing the majority of the work.”

According to Mageley, the strategic alignment between Medtronic’s and Spectrum Health’s goals was critical to the success of the partnership. “We have established with Spectrum Health, a very carefully thought out value-based health care partnership framework,” She said. “We are contributing to analyzing data sets together to help us identify patient populations where we can have an impact. We're working with Spectrum Health and their existing care pathway programs to make sure we're looking at opportunities to eliminate variation within these patient cohorts and carefully aligning therapies and interventions to appropriate points of care within those pathways.”

This is a new endeavor for both parties, but there are some substantial financial goals and a commitment to patient outcomes tied to the project. Sinke and Bertotti will regroup with GHX in the future to share their results and learnings from this strategic partnership. 

Image Description

Suzanne Smith

Solution Advisor, Lumere