Tag Archives: value-based purchasing

9 Reasons for Inefficiencies in Supply Management

by Tracey Chadwell, Senior Director, Advisory Solutions, Intalere

In recent blog posts, we discussed the idea of supply utilization management and building a sustainable process to identify gaps in supply chain strategies and create new behaviors that bring savings to your healthcare facility’s bottom line.

One area of particular scrutiny is waste in the supply chain. Waste and inefficiencies in the consumption of products is where 79% of all new supply chain savings are hidden. That includes things like inferior products, value mismatches and misused, misapplied, or misappropriated products, which must be identified and eliminated.

In some cases, supply chain can evaluate, select and contract for a product/service/technology, but hospital staff use too many, use wrong products, choose feature-rich products, waste products, or vendors upsell new, higher cost products inside the new contract. That is why a cross-functional team with representation from supply chain, finance, operations and clinical segments, along with a process that includes checks and balances, is so important.

Furthermore, redundancies in supplies and unnecessary deviations in inventory processes lead to variations in practice, many times sacrificing clinical and operational excellence for personal preference or comfort.

What are some of the main reasons for waste in the supply chain that we need to guard against?

  1. Tradition – Products, services and technology need to be reviewed regularly to ensure relevancy beyond the old adage of, “this is what we’ve always used and it’s been fine.”
  2. Poor or inaccurate performance specifications – Most items are purchased from manufacturer-supplied data, not based on required performance expectations, and, therefore, are either over- or under-performing, resulting in waste and inefficiency.
  3. Wasteful and inefficient practices – Excess inventory, discards, redundant motion, unnecessary practice variation, irrational consumption.
  4. Old technologies – Some products may be inefficient or need maintenance to keep operational. It’s important to evaluate “useful” life to ensure these products are still meeting needs.
  5. New technologies – Conversely, new products and tech purported to be faster, better, cheaper may be less reliable, more supply intense and, thus, more costly.
  6. Lack of accountability – No one “owns” the value chain to oversee the life and cost of an item used by numerous departments.
  7. Lack of input from key stakeholders – Customers aren’t consulted prior to product or service decisions, so inappropriate use or changes occur. Comprehensive stakeholder involvement helps identify flawed thinking or assumptions so better decisions can be made.
  8. Feature-Rich Products – Value mismatches provide more than what is functionally required. For example, pacemakers with over 100 features that cost 50% more, when only 10-15% of its features are medically indicated.
  9. Standardization vs. Customization – It’s rare that one product is able to meet all requirements of all users without incurring waste, inefficiency and a higher cost than necessary. Customization, or building products according to individual specs, will meet the requirements of approximately 80% of the users. The other 20% require higher or lower specs to fit their needs, which may mean buying different products for them. Doing so may actually reduce waste and inefficiency by 10-15%, thus lowering overall costs.

Identifying and understanding these possible hurdles and how best to make critical adaptations, create new behaviors, and revise policies and procedures to mitigate them, is an important part of bringing sustainable savings and a strategic supply chain to your organization.

We Can Help. Intalere helps you better understand the strategic nature of supply chain and provides resources that can assist in bringing efficiency and savings to every area of your supply chain. Reach out to see how we can help. Contact Customer Service at 877-711-5600 or customerservice@intalere.com  or your Intalere representative.

Member Best Practice Spotlight: Verde Valley Medical Center – Medication Strategy for Value-Based Performance

VMMC-The Medication Family ring and training tool

As we recognize American Diabetes Month, this week’s blog post looks at how Verde Valley Medical Center initiated a medication compliance program to benefit patients with chronic conditions including diabetes. 


Verde Valley Medical Center’s (VVMC’s) performance data identified an opportunity to meet the needs of the diverse local community of Native Americans (Yavapai Apache Nation), Mexican immigrants and senior citizens who face challenges in medication compliance.


Through a collaborative effort involving pharmacy, nursing and medical staff, VVMC identified the most common medications a patient is prescribed at discharge and developed unique cards to enhance performance outcomes – 18 “drug family” cards and two “take home facts” information cards. The cards are provided to patients during care as medication is dispensed and at discharge during medication reconciliation. This gives the caregivers and the patients easy-to-understand information “in hand” and provides the opportunity for caregivers to have ongoing discussions with patients, especially in the management of chronic conditions – diabetes, cardiac and respiratory therapy, as well as pain and antibiotic use.


The data improved from patient satisfaction and government mandated value-based purchasing perspectives. Re-admission rates decreased while patient satisfaction, education and discharge instructions increased. Additional stakeholders in the community were identified.

About Verde Valley Medical Center

Formed in 1939, Verde Valley Medical Center is a full-service, 99-bed, non-profit hospital serving North Central Arizona. Four locations serve the Verde Valley and surrounding communities: Cottonwood campus, Sedona campus, Camp Verde Health Center, and Village of Oak Creek Health Center. More than 800 professional and support staff are employed at VVMC. The Medical Staff is comprised of nearly 100 physicians representing 25 medical specialties. We are a member of Northern Arizona Healthcare, which also serves patients through Flagstaff Medical Center, Northern Arizona Homecare and Northern Arizona Hospice.

To learn more about Intalere resources for diabetes prevention, management and care, click here.


Four Must-Have Measurements for Effective Foodservice Performance

peter cayan

By Peter Cayan
Senior Director, Nutrition Specialists

In my last blog, I mentioned that national healthcare reform continues to drive less available dollars with a laser-focus emphasis on measureable quality patient outcomes. Healthcare nutrition and food professionals will continue to play out a balancing act of economic and satisfaction measures to help shape their organizations’ success or demise. This constant vigilance of the “levers and drivers” of performance metrics are underscored by the ever-changing national benchmarking indices.

These variables coupled with public visibility, value-based purchasing and C-suite scrutiny, position the foodservice executive with a plethora of information, data and KPIs from which to choose. It can, however, be difficult to define or select those metrics which truly define one’s performance and, more importantly, those which will assist with operational course correction if necessary.

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The balancing act is defined in four operational arenas – each having their own proprietary ratios, measures, definitions and “MUST-HAVES.”

    • Expense and revenue budget: Actual and budget performance that includes dollars and percentage variance for each period, year to date and prior year. The budget tool must have the ability to apply journal entries and restate or reconcile all line items throughout the year.   
    • Patient satisfaction: Mean scores and percentile rankings by peer group. Satisfaction indices must include minimum measures of food quality, food temperature and courtesy. 
    • Employee satisfaction: Mean scores and percentile rankings by peer group. It is imperative that the assessment tool has the ability to isolate scoring on an individual leader and/or a supervisory group. In addition, the tool must be able to measure work environment, benefits and leadership metrics. Lastly, the instrument must be confidential and in a format that is user friendly. Without the latter, all employee satisfaction measures will be irrelevant.
    • Economic benchmarking: One could spend hours extrapolating dozens of meaningless ratios. The most effective economic performance indicators must include:  X* cost per meal; X* net cost of cash per patient day or adjusted patient day; and productive hour worked per patient day or adjusted patient day. (*line items segregation of food, supplies and grand total)

In summary, today’s foodservice executives continue to face a balancing act of economic and satisfaction performance demands. Undoubtedly, those most successful have the keen ability to understand the key levers and drivers that lead to an acceptable and sustainable performance.

As one “data junkie” once told me, “the exceptional leaders are those who are able to differentiate causal relationships verses simple correlations.” Now, I think I’ll dig out my slide rule for a trip down memory lane…  

Contact us to find out more about Intalere’s healthcare nutrition solutions.

Value-Based Purchasing – Staying Focused on a Moving Target

Pilla, Lori business shot

By Lori Pilla
Vice President, Clinical Advantage and Supply Chain Optimization

Healthcare providers will once again need to adjust, learn and understand as the Centers for Medicare & Medicaid Services (CMS) raises expectations on quality and patient perception of care measures for 2015.

 Changes for FY 2015 will include:

  • –Twenty-six measures, up from the original 20
  • –Addition of an efficiency domain that focuses on Medicare spending per beneficiary
  • –Increase in the diagnosis related group (DRG) operating payment to 1.5%
  • –Elimination and addition of some individual measures from Process of Care and  Outcomes

With the enhanced goals and requirements, it is even more apparent that just maintaining current results will not be sufficient. As had been the case in earlier updates, the message is that providers must improve and show continual, consistent gains to ensure they will maximize reimbursement.

The average healthcare system in America achieved a 2.2% net operating margin in 2011. If those providers keep following along the exact same path, by 2021 their net operating margin is expected to become a 16.8% deficit. We can be certain that in the future CMS will initiate new quality performance measures and continue to withhold a higher percentage of base operating DRG funding while making sure to build a higher threshold for healthcare quality and value.

Healthcare providers will need to continue to sharpen their focus on enhancing value-based measures of care and making difficult, necessary changes to maintain and protect financial growth and sustainability.

To learn more about value-based purchasing and the changes to quality and patient perception of care measures, download this briefing from Intalere partner Studer Group, who has helped more than 1,000 healthcare organizations achieve and sustain operational, clinical and financial results.


The New Era of Reimbursement and Reform – 4 Things You Need to Know

Photo - Todd Ebert 100x150By Todd Ebert, Intalere President and CEO

Intalere recently published a whitepaper highlighting changes in reimbursement and compliance that will impact all healthcare providers in the coming years. It illustrates how the movement towards value-based purchasing and implementation of the Affordable Care Act (ACA) will have sweeping effects on healthcare delivery and will eventually impact all levels of providers.

Many healthcare providers are already in the midst of payment model reform and for others, it is important to educate themselves and understand the basics of payment reform and ACA implementation, so that they can determine how to prepare, where they fit in best, and what steps they need to take to protect themselves and the patients they serve.

With this in mind, it’s important to gain insight on:

  • Why payment models are changing
  • What some of the new models are
  • ACA implementation
  • Ways to be prepared

Regardless of one’s support of the ACA or not, to me, it would be more accurate to say that the truly revolutionary factors or changes that have come out of the ACA are coming from pressures outside of government, but are certainly associated with government funding issues, and the fact that the longstanding fee-for-service healthcare payment model is unsustainable.

The paradigm is shifting from a model where there were incentives for maximizing quantity of care to one where various pay-for-performance or value-based purchasing concepts will guide reimbursement. The bottom line is to capture factors other than quantity and incentivize efficiency, quality outcomes, efficient use of resources and preventive care.

One of the lynchpins of the ACA is the creation of the Center for Medicare and Medicaid Innovations (CMMI), which is also referred to as The Innovation Center, within the Department of Health and Human Services (HHS). The CMMI website is an excellent resource to gather up-to-date summaries and detailed information about the demonstration programs throughout the country, as well as information on several private insurance initiatives.

The most publicly recognized aspect of the ACA implementation is the creation of insurance exchanges which allow individuals to shop and compare health insurance plans. Open enrollment for insurance coverage through the exchanges began October 1, 2013, for coverage starting as early as 2014. The ramping up of the federal healthcare.gov site had some difficulties initially with the site working correctly, which have also caused issues with participants signing up for state exchanges. 

At a minimum, Medicaid expansion and the requirements of the exchanges will mean an influx of new patients for many. Staff education, technology upgrades and the addition of at least some mid-level staff should be strongly considered by providers as they prepare for this transition.

One thing to keep in mind when it comes to payment reform specifically and the proliferation of new payment models, is that providers are generally lucky that these are optional programs for now. If providers are in a position to participate in a controlled fashion, so that they are not putting their entire financial cost and revenue stream at risk, it could help to ensure they are prepared, at least in some capacity, for what the future holds in terms of value-based purchasing.

The coming reality is that fee-for-service will be gone in some foreseeable future and one or more value-based models will be imposed on everyone. What this offers providers currently is the opportunity to learn how to participate without betting the entire organization on it.  At Intalere, we are working on these challenges with our members, in both acute and non-acute settings, providing unique, customer-focused solutions built on value, innovation, quality and ease of use, to help them drive operational efficiencies.

For a more in depth review of these topics, download the new Intalere whitepaper, The New Era of Reimbursement and Reform: What You Need to Know, or contact us at customerservice@amerinet-gpo.com, to learn how we can help.

Four Keys to Customer Service – and Saying Thanks

Photo - Todd Ebert 100x150

by Todd Ebert, President and CEO, Intalere

As the Thanksgiving holiday approaches, we are always reminded of those things both personally and professionally that we truly appreciate.  On the professional side, one particular thing for me is being able to build lasting relationships with customers, fulfilling our shared goals and helping them to overcome the challenges they face in providing the best quality healthcare they can to the community.

In my experience, a truly satisfied customer is one who recognizes that we anticipate their needs, provide key and timely opportunities to save money, and improve processes and services in a proactive format.  Keys to strong, engaged customer service include: 

  • Understanding their organization and goals
  • Responding promptly to questions or inquiries
  • Knowing where to turn for the answers, if they are not readily apparent
  • Proactively seeking opportunities for improvement, not waiting for me to identify a need for help

The difference many times comes down to listening to the customer and truly understanding their pain points.

The Intalere approach to engaging with customers has always been to listen and understand the customer’s needs, create an agreed upon plan of action and deliver more than expected. Use our resources to uncover opportunities to meet and exceed cost reduction goals. Connect members with our value-based purchasing tools, so they can stay ahead of the curve in the accountable care environment. Engage our field specialist team on-site with members for practical answers to their most pressing needs and give them the educational resources to continue to grow and thrive in their service to patients.  

When you operate in a very competitive environment and the differences in product and price are small or negligible at best, excellent customer service truly makes the difference. I find it’s the real “value” that customers appreciate the most. To our valued customers, I say thank you for your continued support of Intalere.

View this video that illustrates the challenges our members are facing and how Intalere is helping them reduce costs and enhance quality in the new era of healthcare reform.