The role of the VAT
Many of the 200 largest U.S. hospitals and IDNs employ value analysis teams (VATs) as part of a hospital value based purchasing program. The mission of the VAT is to select clinically acceptable products at the best possible price.
What is global sourcing and why does it matter to the VAT?
At its core, the hospital value analysis team’s mission is to select clinically acceptable products at the best possible price: Global Sourcing will assist hospitals with their common goals.
Global sourcing describes the practice of acquiring common, commoditized hospital products directly from manufacturers worldwide. Eliminating transactional thinking from your value analysis proposition enables you to choose clinically superior, instead of simply clinically acceptable, hospital products. Adding customization and branded elements while cutting out the middlemen and significantly reducing cost at the same time are also benefits. Leading U.S. hospitals indicate globally sourced products make measurable, positive contributions to improvements in the patient experience and HCAHPS scores.
Many of America’s leading hospitals and IDNs including NewYork-Presbyterian, Westchester Medical Center Health Network and Northside Hospital (Atlanta) are adding global sourcing strategies to their hospital value based purchasing program for the quality improvements and cost savings these programs afford. If your value analysis team (VAT) is not familiar with global sourcing, its capabilities and requirements for effective implementation they should be.
ASP Global has written the book, literally, on global sourcing implementation for value analysis professionals. Learn about why and how through this high-value series by ASP Global Director of Value Analysis Bethany Gleim as published in Healthcare Purchasing News.
Improving quality and increasing standardization while reducing cost
The cost to providers for many hospital supplies and commodities include significant markups on products that come from many of the same factories that hospitals could access directly through global sourcing.
Jim Connor, VP of Supply Chain with Westchester Medical told us, “Hardly anyone will tell you what [a med/surg product] costs to acquire throughout its supply chain lifecycle. I need partners for items I’m acquiring in high volume that must consistently have very high quality, with full cost transparency.”
In just one example out of 33 products in Westchester’s global sourcing program, the team consulted with the clinical staff to source a new digital thermometer. The result: “We generated a better product at half the price,” Connor says. “We save $70,000 per year on that product alone and trimmed three SKUs down to one.”
Connor said Westchester saved an average of 27% on all products as part of their hospital value based purchasing program in the project’s second year. “Ultimately my goal is to get the product the clinicians want and get it to them efficiently,” he said.
Improving clinical utility
Marc Prisament, Director of Product Development and Global Sourcing for NewYork-Presbyterian told us, “When the health system changes the sourcing for a product, our ‘clinical improvement team’ participates in the decision-making process, which often results in winning scenarios in terms of both maximizing value and standardization.”
This scenario played out effectively when NewYork-Presbyterian began direct sourcing of operating room jackets, which included changes to reflect the preferences of the NYP’s OR clinicians.
“They didn’t like the snaps. They didn’t like the length.” By leveraging high volume purchases with a new manufacturer, NYP combined the preferences of OR clinicians from all of the hospital’s nine campuses. “There’s now only one product to buy, stock, and distribute,” Prisament said.
Improving customization, branding and the patient experience
From admission all the way through discharge, what are you saying to your patients with the products you hand them? Exactly how should the blanket you offer to a new mother and her newborn child feel? What if you could tell the person actually making the item what you are trying to communicate to the patient so that they can understand exactly what it means to you – including how it should look and feel.
Kathy James, clinical supply chain manager with Northside Hospital (Atlanta) says, “It’s the little things that make big differences in the lives of the patient. So while there are many commercially available products we could have had relative to our patient comfort kits, we wanted it to be part of a personal experience. All of these efforts to improve the quality and utility of our hospital branded, patient amenity and other products [in our global sourcing program] have done nothing but improve our HCAHPS scores.
“When we started the process of custom designing our amenity kits we did not realize how much more of a personal connection we could make with our patients. What surprised us more than anything was how many middle layers of cost we could remove by going direct. As a result, we’ve gone to a more direct sourcing model on other items and are looking to grow.”
Over the next two months, we will show you how to integrate global sourcing into your VAT’s hospital value based purchasing program, step by step, all the way from strategic rationale and acceptance to implementation and ultimately program optimization.
To learn more about global sourcing and how it can positively impact your VAT and its mission, contact ASP Global Director of Value Analysis Bethany Gleim at email@example.com or call (404) 696-6999.
5 steps to global sourcing for hospital value analysis teams and professionals - EBook
Global has written the book, literally, on global sourcing implementation for value analysis professionals. Learn about why and how through this high-value series by ASP Global Director of Value Analysis Bethany Gleim as published in Healthcare Purchasing News.