Forcing a new level of operational and clinical focus
Value-based care is forcing health systems to rethink their operations in ways that enable stricter management of risk and cost control at scale, while maintaining or even increasing care quality and outcomes. The need to rethink operations can turn into a cause of significant worry among clinicians – nearly one in two clinicians say they are still very or extremely concerned about the shift and implications of value-based care on how they practice.1
Enabling cost control and higher care quality
One driver of this trend is reimbursement – through Medicare and Medicaid in particular – that creates incentives for lump payments per care episode. Health systems try to manage the cost of care across the continuum, including inpatient and outpatient costs, regardless of the fixed payments. The key to succeeding in this model has always been to reduce costs, and this could not be truer moving forward.2
Supply chain can play a significant and enabling role in the delivery of value-based care, especially in the area of cost control. This comes through improved consistency, efficiency, and standardization that control costs, ideally at a higher level of clinical satisfaction and patient outcome.
Delivering cost improvements that enable clinical performance
To be successful, supply chain must make its contribution clear. Cost reduction is often thought about at the procedure level: For example, for a knee or hip replacement that goes well, a health system can get the patient home in fewer days, saving costs even though the system is reimbursed the same amount, regardless of the length of stay. Supply chain services can play a key role in identifying opportunities to reduce costs and leading improvements around the procure and recuperation, that enable better clinical workflows, performance, and outcomes.
Visibility, efficiency and standardization
Greater visibility into supply utilization, more efficient freight and shipping, and increased product standardization are often-overlooked opportunities to reduce expenses. They also enable better clinical workflows and improve overall system efficiency and control costs in key ways:
- Achieve spend data standardization: Supply chain can gain insights to drive implementation and acquisition analysis and enable SKU reduction. Users of Cardinal Health Spend Essentials™, an interactive cost-management tool, can identify actionable savings and SKU optimization opportunities, based on current purchasing patterns. The tool provides visibility into purchasing trends across the entire health system, and leverages enhanced data, clinically standardized categorization, and cross-referencing capabilities to optimize purchasing decisions. One large health system that used Spend Essentials™ realized a median cost savings of 27 percent per SKU standardized.3
- Enable real-time supply monitoring: Supply chain should adopt RFID and barcode tracking technology through mobile apps and cloud-based analytics software to enable actionable insights. Adopters of Cardinal Health Wavemark™ Supply Management and Workflow Solutions elevate supply chain’s contribution by aligning people and processes, then combining these technologies to let both supply chain and clinicians alike to perform at their peak. The result can drive operational efficiencies of both personnel and supply resources, which helps better utilize resources, drive down costs and gain savings at scale – with a proven ROI.
- Improve HCAHPS4 scores and reduce readmission rates with patient counseling and medication reconciliation: Achieving these results, which are value-based care success factors, requires application of a business discipline to the methodology and measuring results, as well as including a number of hospital stakeholders to enable faster change management.
Cost management enables value-based care
Cost reductions are achievable and advance value-based care initiatives. Supply chain plays an essential role – through improved consistency, efficiency, and standardization – ideally at the same or greater level of clinical satisfaction and patient outcome. Given cost management is a critical success factor in enabling value-based care – as long as the quality of care is not compromised – supply chain will play a mission-critical role within health systems, and must be prepared to deliver moving forward.