Karen Conway writes in this month’s Healthcare Purchasing News about how “value-based healthcare starts with standard definitions.”  We applaud her and HPN for bringing attention to the challenges facing supply chain professionals as they seek to promote value.

…supply chain, which has the ability to support both clinical and financial objectives, yet sometimes is not empowered to collaborate to its full potential. Case in point, a friend and supply chain leader told me recently that a decision (made by supply chain and clinical leaders) to move to a new, more innovative product resulted in the elimination of the test they were using previously, which had been a source of revenue for the hospital. That met with resistance from the revenue cycle lead who was only thinking about top-line growth. When the supply chain leader explained the new product would result in overall lower costs to care for a patient, but with the same quality of care, the supply chain leader was told: “Revenue cycle is not your responsibility.”

The fact is, under value-based healthcare, we need to consider both: costs and revenue, as they both contribute to the financial strength of our healthcare system to improve the health of individuals and populations, and at a lower cost per capita. Supply chain can support this by considering the impacts of its decisions beyond the price of products and services and even the total cost of ownership (e.g., sourcing, acquiring, managing, etc.). Also consider how those decisions affect revenue, cost reduction and patient care. But supply chain cannot do this in a vacuum. Supply chain professionals must collaborate with clinicians on which products are best for which kinds of patients, and with finance to understand the revenue and cost implications. Value-based healthcare is truly a team sport, and no one should forget the often too-silent team player, the patient, who may have another perspective on value.

The reprocessing industry sees these kinds of challenges all the time.  Supply chain professionals seek to promote greater used of reprocessed single-use devices only to have the savings opportunities thwarted.  Are the physician and other users in the loop on the cost savings and waste reduction benefits reprocessing brings to the hospital?  Do other vendors, including those who stand to gain when the hospital buys more new devices, aware of the hospital’s reprocessing program and instructed not to interfere?  Are supply chain managers even aware of upgrades, updates or other incremental changes of modifications which may impede the hospital’s ability to reprocess and thus extend the lifespan of their medical devices?  These are all challenges which underscore, as Karen Conway points out, that value-based healthcare demands that supply chain professionals collaborate with clinicians and finance peers on the best products for patients at the best cost.


To read the whole article from Healthcare Purchasing News, click HERE.