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Embracing the Cost-Quality-Outcomes Movement

Embracing the Cost-Quality-Outcomes Movement. The Future of Healthcare Supply Chain. Healthcare Landscape 2012: Changing Times. Under reform, fully phased-in hospital cuts (2019): At BEST , baseline payment MINUS 14% (across-the-board cuts only)

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Embracing the Cost-Quality-Outcomes Movement

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  1. Embracing the Cost-Quality-Outcomes Movement The Future of Healthcare Supply Chain

  2. Healthcare Landscape 2012: Changing Times Under reform, fully phased-in hospital cuts (2019): • At BEST, baseline payment MINUS 14% (across-the-board cuts only) • At WORST, baseline payment MINUS 20% (across-the-board PLUS quality cuts) Hospitals need a comprehensive strategy to minimize costs while maximizing quality patient outcomes

  3. Supply Chain Can Drive that Strategy

  4. Transformational Events The economic downturn (cost driver) and healthcare reform (quality driver) are events with far-reaching implications for supply chain executives and serve as the driving force in the transformation of the supply chain executive role Source: HHN Magazine, 11/29/10

  5. The Evolution of Healthcare Supply Chain

  6. What is the CQO Movement? The CQO Movement looks at the intersection of CQO meaning the relationships between: • Cost (how it relates to the cost of services, products, supplies) • Quality(how it relates to the quality of patient care, the services provided) and • Outcomes(how it relates to patient outcomes, patient care, patient experience, reimbursement) It is important to consider these relationships together rather than in separate silos.

  7. How AHRMM is Reinventing Itself Around CQO • Education Initiative with three areas of focus: • Quality & Cost • Reimbursement & Outcomes • (C) Continuum of Care • Webinars and FAQs • Committees

  8. When Supply Chain Owns the CQO Intersection: Case Study Examples

  9. CQO Movement Asks: What is unique about its clinical performance to justify its cost?

  10. Challenging Hernia Patient • Ability to rapidly revascularize • Ability to integrate into host tissues • Resistant to infection

  11. Abdominal Wall Reconstruction Hernia patients with major complications & comorbidities account for about 7% of all hernia repairs

  12. Potential Economic Impact to Hospital Potential cost of post-op complications related to ventral/incisional hernia repair

  13. Sample Case Costs SYNTHETIC MESH Cost of product $2000 100% Reimbursement -$2000 Cost of treating infection $11, 739 Total = $11,739 BIOLOGIC MESH Cost of product $13,000 $32.25/sqcmReimbursement -$10,240 Cost avoidance $0 Total = $2760

  14. Cost Justification • Consistent outcomes • Single stage • Decreased complication rates • Avoidance of further surgery

  15. CQO Asks: • How Do We Reduce Needlestick Injuries in Healthcare? • >800,000/yr in US • Risk of blood borne pathogens • Education only means of addressing

  16. CQO Asks: • How Do We Reduce Needlestick Injuries in Healthcare? • New syringes with improved safety mechanisms

  17. CQO Asks: What is Unique About its ClinicalPerformance to Justify its Cost?

  18. Safety Syringes • 1 Needlestick injury/6000 injections • Average cost of testing/treatment after injury equals $3000 • Additional costs of treatment can add up to hundreds of thousands

  19. Case Costs: Conventional Safety Syringes SUPPLY CHAIN INTERVENTION: DECREASE SAFETY SYRINGE PRICE BY 15% Note: * Negotiate minimum reduction of $3,500 mesh per unit cost

  20. Case Costs: New vs. Conventional Safety Syringes SUPPLY CHAIN INTERVENTION: CONVERT TO IMPROVED SAFETY SYRINGES Note: * Negotiate minimum reduction of $3,500 mesh per unit cost

  21. Case Costs: Conventional vs. New Safety Syringes SUPPLY CHAIN INTERVENTION: OBTAIN PERFORMANCE GUARANTEE Note: * Negotiate minimum reduction of $3,500 mesh per unit cost

  22. Substantiating Evidence Tuma SJ, Sepkowitz KA. Efficacy of safety-engineered device implementation in the prevention of percutaneous injuries: a review of published studies. Clin Infect Dis 2006;42:1159–1170. Elder A, Paterson C. Sharps injuries in UK health care: a review of injury rates, viral transmission and potential efficacy of safety devices. Occup Med (Lond) 2006;56:566–574. Adams D, Elliott TSJ. Impact of safety needle devices on occupationally acquired needlestick injuries a four-year prospective study. J Hosp Infect 2006;64:50–55. Whitby M, McLaws ML, Slater K. Needlestick injuries in amajor teaching hospital: the worthwhile effect of hospital-wide replacement of conventional hollow-bore needles. Am J Infect Control 2008;36:180–186. Jagger J, Perry J, Gomaa A, Kornblatt Phillips E. The impact of US policies to protect healthcare workers from bloodborne pathogens: the critical role of safety-engineered devices. J Infect Public Health 2008;1:62–67. Lamontagne F, Abiteboul D, Lolom I, et al. Role of safety-engineered devices in preventing needlestick injuries in 32 French hospitals. Infect Control Hosp Epidemiol 2007;28:18:23.

  23. Cost Justification • Consistent outcomes • Improved quality of hospital experience • Best practice medicine

  24. Supply chain is perfectly positioned at the intersection of cost, quality, and outcomes to take the lead on responding to the demands of health reform. AHRMM is leading the way.

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