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NAVIGATING THE VALUE ANALYSIS PRoCESS IN                                                                                                                         MEDTECH

11/30/2022

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STEP 1: UNDERSTAND VALUE ANALYSIS AND ITS ROLE

It’s a two-word descriptor that couldn’t be more obvious: Value Analysis. If you can successfully fog a mirror, you already understand Value Analysis is the process of analyzing sets of data and information to thoughtfully assess the relative value of a particular item or service being offered. OK, we’ve all aced that part of the exam so let’s move on.
Next, we’ll toss this out right up-front: Value Analysis professionals are not the Lords of the Lowest Cost.
Not at all.
What they are is the equivalent of an economic traffic cop at a complex, delicately balanced six-way intersection that includes manufacturer, distributor, negotiator [Group Purchasing Organization or Integrated Delivery Network], hospital system, clinician and, most importantly, patient. Value Analysis pros are paid by the healthcare system or facility to obtain the highest available value [which may or may not be the lowest cost] for healthcare products or services, taking into consideration the specific needs and objectives of all parties previously mentioned. And that can be a wide-ranging collection of preferences. Perhaps ringmaster of a six-ring circus might be a more apt description …
The role of the Value Analysis professional is difficult and demanding as they strive to find the often-elusive “sweet spot” that pleases everyone along the healthcare continuum. Suffice to say, these are highly intelligent people, many of them clinicians themselves, whose ultimate goal is to improve patient outcomes while simultaneously meeting the expectations of healthcare providers, as well as negotiating acceptable profit margins for healthcare administrators.
Three seasoned denizens of the Value Analysis world share 12 key points to keep in mind as you begin the process of addressing and [hopefully] gaining approval from Value Analysis Committees.
__________
AMY WHITAKER, MedTech Gurus “Panelist”
  1. Value Analysis teams are key links in supply chain. They don’t just analyze products/options/costs, they focus on clinician preference and implementation.
“Clinical transformation is really an entity within Supply Chain. It really takes the premise, the foundation, of value analysis and expands upon the general concept to pull together an interdisciplinary team that not only helps to make decisions but also helps with the implementation of those decisions. We really try to keep the patients and the caregivers in the middle of all of our conversations in Supply Chain.”
 
  1. The top-three priorities for a Value Analysis Committee are: Data, Data and Data. Quality of data trumps quantity of data.
“There are a lot of different things that we need … in the decision-making process. So, what are we [ultimately] looking for when we’re making a decision? It really is data. Data, data, data helps us drive our decisions. You really need to have clinical input and buy-in … and really know the work within Value Analysis is very complete. That requires a lot of research and review of data analytics and it really takes a team to do that work. First and foremost, we want to understand how these products will impact patient outcomes. Secondly, we clearly need to understand the impact of [that] patient outcome. It's very important for us to understand that. Most definitely, for us, it is the quality of data and not quantity of it. As long as it is self-evident and supported then we can talk through it.”
  1. Suppliers must prove their new technology is more efficient, improves patient outcomes, and works within the healthcare system’s specific needs.
“We had an opportunity to connect and work with a company that offered some great data support with very specific details around what that [product] promise was and how it would help generate and drive towards decision-making as it related to our robotics process and programs within each facility and at market levels. When we really worked through all that … where they missed the mark was overstating and under-delivering. It was a huge miss and no one could have fully predicted that but, in this instance, really the most important thing is to be clear on what you can, or your company can, offer and make sure if you promise it, you can deliver it.
 
“[Conversely], one company helped support every painful step along the way. [That was] a leading indicator that it was going to be successful because the customer service and support was prompt and honest. We may say we need this product or that product and we understand they offer seven other products but respecting the scope really helps. We’re going to have some ‘pain points’ along the way and just know if we are working together in a prompt fashion, we can hopefully get to a result that everyone will accept and be amiable to.”
 
  1. Most Value Analysis Committee members have a clinical background. Focus on improved outcomes during the product/service vetting process.
“The Value Analysis community is typically a community of professionals but most of us have nursing backgrounds so within our nature is to nurture. We definitely want to help out those who might need help.”
 
JAMES RUSSELL – MedTech Gurus “Panelist”
  1. Data [internally-sourced and supplier-provided] is king to Value Analysis professionals Decisions are made on logic and evidence, not emotion.
“Though we work in Supply Chain, we’re data geeks. For any project, we want to pull baseline data, where we are now. So, we have [different] buckets of data that we pull, we just call it Clinical Utilization & Financial. Briefly, clinical data are things like quality data, quality days, hospital-acquired conditions, etc. We want our [decisions] based not on emotion but logic and evidence. Say spinal implants [as an example], we want to know who the surgeons are that do those surgeries, what items they use, what vendors are they using, and how they compare to other health systems. Then of course, there’s financial. What are our costs per procedure, what are our margins, what do we make, are we doing things that are positive and, lastly, we want to be able to compare.”
 
  1. Value Analysis Committees are not just “money people”, they’re clinicians and what matters most is providing the best care for patients while seeking greater efficiencies for all.
“Good patient care with positive outcomes is why we exist. We don’t just exist to cut costs or make money. We exist to help patients.”
 
  1. Value Analysis Committees seek value versus lowest cost, as measured by ROI [improved patient outcomes, ease of physicians workflow, etc.].
“If we can prove that, say, [using] a plastic  item instead of a metal item which costs more but it’s better for our patients, let’s do that. We’re not just the money people, we’re clinicians so the ultimate goal is the best care for our patients and to get them out of the hospital as quickly as we can.”
 
  1. Value Analysis Committees share economic data to help providers better understand the impact of products and costs on hospital or healthcare system profitability while also considering clinician preferences.
“At an old academic medical center, we had nine surgeons doing spine procedures and one of them was really married to one supplier. Everybody else was a little bit of this supplier, a little bit of that supplier. But that one surgeon was married to that one supplier. Nobody else used that supplier and, unfortunately, that supplier charged our hospital system list price.
 
“We met with [the] surgeon who was a wonderful person and chair of the department and went over some data with him. He didn’t realize the costs the hospital incurred for his implants that were so much more than the others. He was clear with us: ‘If you want me to look at using another another supplier, that’s going to slow me down. I’m going to have to learn how to use  different implants and different hardware and different vendor representatives and that’s not a simple thing.’ We’re very cognizant of preference but having said that, we’re evidence-based and if we are spending more and outcomes aren’t better, well … The phrase we use in Value Analysis is ‘unwanted variation’ and [we] see if we can influence it.”
 
DARBY THOMPSON – MedTech Gurus “Panelist”
  1. Look through the lens of the provider when working with Value Analysis Committees. Understand their challenges and bring them greater efficiencies, including costs, so they can better serve the patient.
“The hospital expects you to understand what your clinical value is [to them], what your economics are, and the total cost of care and total value that you bring. That’s the kind of guidance a National Accounts person can give you at the preliminary level.
I’ve seen it many times: Wonderful ideas that just weren’t built to navigate the health care system because they were looking at it through a different business lens or maybe an academic lens, and healthcare is complex. There’s a lot of commitment, a lot of vetting that is involved, because you’re dealing with patient lives. There are a lot of things that come into play and if you’re aware of them early on, you’ll have a greater appreciation and fewer hurdles as you move forward into the healthcare market.”
 
  1. Know your product’s clinical value proposition and its economics.
“Value Analysis is ‘the pressure test’ of your business strategy, to your market value. They’re going to look at your ability to perform in the market. Do you provide economic value? Do you have the ability to serve the customer? Value Analysis is really a ‘deep dive’ into your business and how you perform, or can potentially perform, in the market. A lot of people try to skip it or dread going through it. But it’s really your test and if you get that approval, you have to understand that the Value Analysis people are putting their reputations on the line so they want to make the best decision.”
 
  1. Even before your product is presented to a Value Analysis Committee, you must work through a Group Purchasing Organization [GPO] or Integrated Delivery Network [IDN], teams made up of varying perspectives and expertise. Suppliers don’t always know best. Are you simply new “bells-and-whistles” or a game-changer? Accept feedback if they tell you “your baby is ugly” then do something about it.
“As the [GPO or IDN] provides feedback, you have to have the willingness to learn. To have the willingness to document and provide the information you have. I think one of the biggest mistakes is that customers or manufacturers or anybody else bringing a healthcare product [to a GPO or IDN] is that they think they know best. Yes, they know their product better than anybody else but the team involved is the decision-maker and those 5-8 [persons] are going to provide you feedback – how to move through their channel, and how best to serve the caregiver and their patients. So you have to adapt and learn.
 
“And once you have that [first] approval, stay focused. You’re going to learn a lot of things you hadn’t considered. Caregivers in hospitals are very good at providing feedback when they see you’re committed to providing continuity of care. Just because you have one hospital in the IDN that likes your product doesn’t mean you can go out and sign other hospitals in the IDN. Focus first on implementing that total value of care throughout that [hospital] then you can add the next customer.”
 
  1. Embrace the notion that Value Analysis is invested in your success with the ultimate goal of providing the best patient care and outcomes.
“[Value Analysis Committees] will vet your data and track performance. They’re invested in you being successful because their reputations are on the line. Ultimately, they want to provide the best care and best outcome for the patient. Even though it’s a difficult process and can be frustrating with how long it can take, if you look at that template and understand how to navigate it and work with people, you’ll be able to build it and document it. That’s how you move it.”
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