Inside the Value Analysis Process, Part 1
Barbara Strain is an expert in Value Analysis and Management. Barbara has forty-one years of provider experience, thirty-four of them in the University of Virginia Health System where she led teams in Value Management and Supply Chain Analytics. Barbara is one of the founders of the Association of Healthcare Value Analysis Professionals (AHVAP), and a past president. She earned the Brooke Berson Founders award from AHVAP in 2019, and in 2021 was honored to enter the Bellwether League Foundation Hall of Fame for Healthcare Supply Chain Leadership. In episode 1 of a 2-part series, Barbara discusses the evolution of value analysis, managing deal flow and how projects are prioritized, what a committee or group looks like, and what questions you need to ask to get to the right people.
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Episode Transcript
This transcript was generated using an automated transcription service and is minimally edited. Please forgive the mistakes contained within it.
Patrick Kothe 00:31
Welcome! Selling medical devices is complex, but buying them is too. Imagine all the device companies lined up at the supply chain manager's door asking for a piece of the pie. Then think about all of the non product initiatives the hospital hass going and then asking the staff to do a product conversion or five at the same time while doing their regular job - patient care. Value analysis helps to manage the process of acquiring products and services. But many times we don't know what they're thinking, or we're gonna help with that today. I'm very happy to have Barbara Strain join us to bring you inside the mind of someone who has vast experience in value analysis and management. Barbara has 42 years of provider experience 34 of them in the University of Virginia health system. 22 of those years are spent in value management and supply chain analytics. Barbara is one of the founders of the Association of Healthcare Value Analysis Professionals, AHVAP, and a past president, she earned the Brooke Berson Founders Award from AHVAP in 2019. And in 2021, was honored to enter the Bellwether League Foundation Hall of Fame for healthcare supply chain leadership, Barbara and I had so much to discuss that I divided our conversation into two parts. This episode will cover the evolution of value analysis, managing deal flow and how projects are prioritized, and what a value analysis committee or group looks like. And then what questions you need to ask to get to the right people. Here's our conversation. Welcome, Barbara. Hey, Pat, great to be here. Well, Barbara, the first part of your career was in microbiology, which is really interesting, but then you moved into supply chain and value management. Why did you make that shift in your career?
Barbara Strain 02:44
I know some people probably say, What in the world, were you thinking? My whole entire career spans about 41 years in provider organizations. And whether I was in microbiology or doing other things, I was always very interested in the sort of the business processes piece. So regardless of what was really going on, so I wanted to know, how did products actually get into our organization? Why did we choose what we chose to do lab testing with, you know, how did we do quality control and keep track of, you know, if we've got a problem with a product that we were using? How does that get reported? So I was always the inquisitive one. So I was usually both entertaining myself, as well as educating myself at the same time. So at a point in my career, where you get to like either a certain age or a certain amount of time you've been doing something? Is this what I want to do for the rest of my career? or How else could I help support an organization that I work for? as well as my goals have always been very patient centric? So how could I continue to help healthcare and make an impact. And so when that opportunity came up, that our supply chain area was actually being rebirthed for our health system I was working for at the time. And they brought in someone to be an administrator. And so they had carte blanche to sort of design what supply chain would look like. And one of the things that they basically sort of insisted on is someone with some sort of clinical background. They wanted to be part of the supply chain team, because they knew from history of where they came from, which was several hospital IDN and that's sort of thing, that having someone who can make those or already had clinical relationships with physicians and nurses in different departments in a hospital health care setting, both inpatient and outpatient was really critical to being successful is how the whole department functioned. Because it wasn't just unloading a truck that showed up at the dock. placing orders is how did all that stuff, get in a storeroom? You know, what were the criteria and things. And we had too many things of the same types of stuff. For example, when I started, there was 18 skews of gloves, you know, different. I said, Why is why are those there? So, it was an easy transition for me, because I've been doing a lot of all those basic things. So when I was in the laboratory, I was also our liaison to our GPO. So I was understanding how GPOs work and things. And because of that, I would also talk to the purchasing department that we had before we developed our own in the hospital and things. So in the laboratory, when you're doing management or directing, you're also doing a lot of reimbursement and charge codes and all those sorts of things as you do the whole book of business, you're managing people, but you're also technical resources, as well as learning all those business things. So it just seemed like a really good fit. And it stuck
Patrick Kothe 06:41
early days of value analysis to where it is today. How has it evolved? And what are some of the main things that have changed in that in that time?
Barbara Strain 06:54
So do we only have an hour Pat? Okay. value analysis, as just principle, in general, was in the 1940s, it came about in an industry. And it was basically, it's not just, you know, how much my pain and making sure I have enough widgets to do the job, but how can we organize the job and do all the widgets better and, and have this, you know, full value, so whatever they were selling, they were making sure that it had a whole value proposition for everyone. It sort of transitioned then into health care. In that probably the 60s and 70s or so when GE is in motor rollers. And those started doing, you know, six sigma, and then that lean came about but value was very important. So how we define there's a definition of value in healthcare, and is probably in in most different industries. But in healthcare, we specifically define this definition is value is equal to quality divided by cost. Anybody can use that. And when you think about it, it's almost like a return on investment calculation. But we're looking at that quality is outcomes, and services, and safety and various things like that in health care. And it could be focused around one product or one service. Or it could be around a whole program, or service line, or Dr. G, or whatever you're looking at, you've got data behind all that. That is your numerator. So you're paying a certain amount to yield that numerator. you're collecting, you know, revenues and things based on that numerator and things. So when you know all those different parts and pieces, and then if you're looking at trying to improve it, so you're looking at gaps you might have in that whole thing, then what's it going to cost you meaning your organization, whatever you're working for, whether it's the supplier, side, provider side, whatever, what if I try to improve and get better and get better outcomes? How much is that going to cost? And you sort of enumerate then in that denominator, all those different parts, pieces, resources, whether they're physical, human, financial, whatever they are. And at the end of the day, when you divide those two numbers up, you want that value to keep rising. If you're in the negative, meaning that you know I have this gap. Let's figure out how important that gap is to the overall. But if I'm going to spend so much money to close that one gap, it may be detrimental maybe to the whole system you've got designed or the whole process that you're working on or whatever. So you have to know a lot of those basics in order to put that together to be effective. And if you will, I'll give you a little tiny example, when we were working on healthcare acquired pressure ulcers, now it's called pressure injuries, we looked at how many pressure injuries did we have. And there's a lot of numbers that go around saying every pressure injury costs, you know, an organization this much money per, but let's just use $30,000, as an example, it's somewhere in in some sort of value in there. But let's just say $30,000. And say you had 10 of them, and you really needed to reduce those down. And hopefully zero is the number you really want to get after. So you're no you're spending this $300,000 to sort of try to eliminate those. So if you say, Well, if I trade out or decrease the amount of dressings and lotions and various other preventive ways I think I'm using today and try to look at all of those and what would be the best for our organization? What are our patients? Are they coming to us already with pressure ulcers or not? Are we trying to prevent all of them and say that we would spend $150,000, trying to reduce those things? Well, that's not a bad equation. So for every dollar you're spending, you're actually recouping dollars, because you're lowering your total outlay. For that happy, we're happy sort of situation. So you're going to get back money from CMS, you're going to do so these are all of the factors and what I call sort of the value wheel or the value chain that you have to look at, when you're doing these sorts of value analysis sort of review. Now, you mentioned value management. So funny, I've been doing a lot of research, because I'm writing an article that won't be published until October, but it's about value management. It really is being able to collaborate with leadership, your clinical, your technical, your non clinical folks, and really look at how do you all work together to accomplish your organization's goals? What are the tactics you can use and things and value analysis and a variety of other things are all of those tactics, but you're watching and looking at that total value? So we call that value management.
Patrick Kothe 13:11
So Barbara, when you're a medical device company, and you hear value analysis, you think about, okay, I'm trying to put my product in into the system and show what the value is to that product. But what you're saying is that it's not only products that you're looking at its treatment algorithms, it's different ways of how you are moving a patient from one place to the other, and all of the things that are taking place with that patient, not just product related. So how do you interface between treatment algorithms, the clinical piece of it and the purchasing piece.
Barbara Strain 13:46
So it's a it's an interesting dance of call it when we look at products, and I keep mentioning services, because so many of the things out there are services today, especially now that people are using AI as as you know, the key buzzwords and things but all the data and stuff. So you really have to look at services as well. It is that delicate dance that you have to do. You've been using a certain product you've been practicing a certain way, whether it's at the bedside or what I call the procedure side, whether you're in labs or respiratory, wound care, radiology, whatever it is, you have to go where those key opinion leaders, those clinical champions are and talk about and have them sort of break down Why are we really doing what we're doing? And what is our what are our KPIs or key performance indicators telling us about either that particular procedure you're doing or whatever? How do we stand benchmark wise, both in the country Clinical, but how much are we spending per that procedure? What's our reimbursement? What's our margin contribution, so you have to look at a big picture. Now, if there is an opportunity, that rather than these three products that we've been using for a while, then and we use it at different phases and things, what if there's a new product or a product we really haven't, you know, asked to come in and have a presentation to learn more about, but what if there's only one that kind of takes the place of those three, and can then condense the time we're spending. So that is usually like, you know, either in a procedure room, whether it's Oh, our interventional radiology, cardiology, whatever it is, and you're improving your outcomes at the same time, maybe and that outcome might be I'm gaining, you know, a half a day on my length of stay and reducing that, or I'm improving my acuity or whatever it might be. So you have to get down to those levels. So you may want to really onboard something like this. And it could be either brand new in the market, or brand new to you. And at any given time, you really can't stay static, because your patients change the disease's change the effects of different, you know, blood pressure, and diabetes, and all that all those things changed. Oh, because you're involving what I call human beings. And human beings tend to change a lot. And things just happen differently. I mean, I started out in a children's hospital in which some of the babies weren't bigger than something you could hold in your hand. And through all the different advances in health care, those are very productive, leading great lives, without hardly any effects, or whatever. And we keep doing those sorts of things. So you have to keep going back and reviewing at various levels, which is where the analysis part sort of takes place. You have to know what data you need to be looking at both clinical and non clinical to understand where are we today? And where do we need to be because now we're getting different patients and things that
Patrick Kothe 17:40
I'm sure that many different hospital systems or hospitals have many different ways of doing this. But who sets the criteria? Who sets the score sheet to say, these are the things that we want to track? These are the things that we want to take on as projects,
Barbara Strain 17:57
you're looking at a variety of data points, and you usually either it's the maker bias situation, when you're looking at data, and how your priority tising data, do you have the right analysts, whether they're financial decision support, reimbursement, etc. And they know how to pull all the data, but they also have a way of being able to really look at it, and analyze and have things pop to it. So we would do some of that ourselves. And those things that we really also needed, say, benchmark added to it, or already had sort of tried and true tools that could really aggregate a variety of things together and say, Now look at this physician doing these procedures and using these devices, as well as what are their outcomes, what are their length of stay, what are their, you know, times in the O r? All those things together. It can be very difficult for organizations to have all those tools themselves, or you know when to go out and buy certain services like that, and there's lots of them exist out there. Matter of fact, it can be mind numbing, because some focus on a certain aspect of what I just described, some focus on others. Then if you happen to be a member of a group, purchasing organization, GPO, whether it's national or regional, etc. You want to look at the services they provide, so that you can maybe drop whatever third party you might be doing or you can utilize your own services internally better. If you can get some of those details and things the best way that not only we Quite a profess in value analysis, but I experienced personally, is we finally got to a structure that we consider fairly best practice. There's probably a couple other levels before that, but you have an executive sponsored steering committee that's overseeing all your value initiatives and through data, and where we all are, and how have all of our different practices are doing what's happening inpatient wise, and outpatient wise, are we opening up any new, you know, dedicated orthopedic, you know, outpatient facilities, where's our cancer program, you're looking at everything. And you're putting together sort of a straw man, because of the total value, we think we can get out of the following seven projects, you do an executive sort of report, and you present it to this group in this group, it can be the CEO or CFO, cmo, CFO. So you got the nursing, the medical, the fiscal, the operations, and sometimes there are some key physicians that are in either like cardiology, or or that's overarching over a variety of services, anything like that. And we're going to present when we say we, the value analysis department, or sometimes they're called clinical resource, or some sort of name, we haven't quite yet gotten everyone settled on calling it one thing. So it can be confusing from the outside world as well as the inside world. But we really present in an executive fashion and recommend we start on these because of things factors that we know, be exactly because you're going to say even though we find this particular initiative very attractive, that particular service line is going to be very involved in like either bringing up a new computer system, or very involved in doing something else, we can't take their focus away from that. So Let's postpone it for six months or whatever. So we're actually then getting permission at that executive level, that we're not going to go through with every single thing that we think we should be working on, they're helping to really structure the organization for success. And know when one or two things may not fly in any particular time. This kind of goes back to what internally at a supply at a provider organization, those individuals that suppliers meet with those provider folks need to understand all that. So they can explain effectively, to a supplier who wants to come in and say I've got, you know, this brand new, you know, interventional product or service, and it's really going to help you with X, Y, and Z, one of the first things that we would do is value analysis would also orient suppliers, whether they were current suppliers, new suppliers, we would orient them. And the first meeting we would have, whether it was phone, email, virtual, whatever is going on at that particular time, we would orient them and we would go through here's how we do business at our organization. And we would talk about our teams or how things were structured, who was all involved, what was very important to the organization, and how we worked on things. And then they would understand a little bit more about how to collaborate with it's how to really look at those things. And if we had worked on a project, similar to what maybe the product they were trying to bring in, or show us or change or whatever the outcome was going to be using that we were then very safe to say we worked on something just like this about six months ago, your product and things weren't available, we've just implemented and things give us a good, you know, and we give them a timeframe. We need to work through this. We'll keep you in mind, give us some of the information so that we know what's out there and available. We'll pass that on and look through it and maybe there's a segment of what maybe is still left to do that your product would help in a certain area and we could onboard it or whatever. But the main thing is for everybody to be transparent, and learn what everybody's sort of need, where they all are, how can we really all do business? But it's really a collaboration and for people to accept no on either side as a perfectly okay answer because providers ask a lot of suppliers to is, what if could you do this for us? Could you do that for us? And if they honestly say no and tell us why we understand as well. So it helps to sort of frame out our decision process?
Patrick Kothe 25:42
Well, I think that that's really an excellent point. Because as a supplier, you're your responsibility to provide technologies up to people, but you also have to fit within their world. And we all we often think that, you know, we're, we're the only person in the world, we're coming in with something. But what you outlined is there are many different priorities, that all fall into desk of a certain small number of people. And they have to prioritize those. And whether you've got the executive committee that the that has a steering committee, or whoever it's termed, they're setting priorities. And then you can only surface certain topics. at certain times, you can't continue to have the same thing. So there's a new new heart valve out this week. And there's another one, six months from now, how many times are you you're going to attack that, but at the same time, we know that there are hundreds and hundreds of new devices that are coming out every month that are hitting your your doorstep? So how do you manage that? I'll call it deal flow. How do you manage that deal flow of all of these people, all of these requests that are coming.
Barbara Strain 26:58
So physically, and mentally, we're juggling all these things, but some of it is a must do because all of a sudden, something is discontinued, you know, and we might have known about it six months ago, six days ago. So we're working on those sorts of things. So we don't have, you know, too much leeway there. Others are, we look and prioritize based on the true need. So I've tried to mention that a few times that we might have a gap, and our service level at either at the bedside and a procedure, or even you know, with our waste, whatever it is. And that might need to get prioritized because it directly affects patient care in a more heightened sense than something else. Some of it is a need, but maybe it's not an immediate need. So we can kind of slot those in, work them kind of in parallel and have them at different parts and pieces. Other things are, I would really like that new shiny thing. And those are the things that we have to kind of filter out. Now. One of the big things when you're working at onboarding products into a provider organization is you're also putting together key relationships across the board. So you don't want to do something that's going to be detrimental to a relationship to the point that you may not be able to work well with individuals going forward. And what I have found in healthcare is everybody has a very long memory. And you can be in a meeting and somebody can bring something up from 12 years ago, and you just want to go we're still talking about that. But it stays with them. Right? So but you have to have that transparency to be able to work with individuals, whether they're the chair of a department or a physician practice that practices and have privileges that your organization or that you've outsourced A lot of you know key imaging or pharmacy and things like that. So you have to know all these things are going on, so that you can understand and how you can prioritize. So value analysis folks with a clinical resource folks or whatever, are usually working on something like 30 to 40 projects at any given time. And probably over the course of a year. That could be a good 1000 projects of some sort. Some can be fairly simple because the products really are pretty much alike. new contracts came out or something occurred to all the way to something that is going to expire. And it was a five year contract to begin with. And now you're really starting from scratch, because there may not be GPO contracts for every item and every service, or you're also on committees that are building cancer centers, and, and building, you know, new breast centers in building a variety of things. So you also have to be on those committees to understand what kind of storage space they're going to have, and what kind of materials can we put in there? And are they going to have big enough storerooms to hold X, Y, and Z? And do they plan on upgrading anything, because now they're getting state of the art equipment as part of this, so it's a real juggling act. So I was fortunate enough to have executives that understood that if we were going to do value management, the way it should be done, staff was needed at certain levels. And you also had to have some of your own analysts and some of your own sort of contracting people that you worked with. And then every time we put up either permanent teams that would meet at a very regular cadence like in the or in that group, it was every two weeks, because it's such a dynamic atmosphere. So you have to meet more often. And we we made the promise that if we all could collaborate together and work on these processes that we would meet often, so it wouldn't, something just wouldn't languish for three or four or five months, and to the detriment of something, whether it was patient care, or learning or whatever it was. Or when we set up ad hoc groups, because some of these things don't lend itself necessarily to a team that's already established, it could be ad hoc, because if it's a certain, say, Dr. G, or whatever, it may have six or seven entry or exit points that have to be discussed, from beginning to end. There are some projects where you have to be in biomed, environmental services, and the waste folks in your other foot. So you have to have the whole group there in order to make a decision. Because if all of a sudden, you brought on something was just the greatest thing, and it was really going to help stuff, you could spend two or $3 million more on the fact that it's going to disrupt all this waste flow. Or it may not be compatible with a lot of other pieces of equipment. So how do you upgrade those, you know, delicately? Or did you have to put in more infrastructure for RFID or something like that?
Patrick Kothe 33:10
So Barbara, scope me a little bit. So the, the group that you worked with was a hospital, it was an idea and how large was it? And then how large was your group?
Barbara Strain 33:20
Right? So when I first started the group was one. Yeah. And then basically, is because I was working in the the hospital, and at the time, it had like 400, and some beds. I had made relationships in my laboratory job with all of the different departments. Matter of fact, my first day in supply chain in this new role was one of the physicians and I picked up the phone and said, who I was, how may I help you? And it was silence first on the other end, and this physician that I've worked with a long time, Barbara strain, what do you what are you doing, I said, Here's where they go, thank God, someone who I can talk to and work with and cannot understand kind of what we're doing. So that was kind of a validation, I made the right thing and whatever. Then we added on to the hospital, we put in a new hospital, we put in larger services. So when I retired a couple of years ago from active provider life, it was 600 and some beds with a tower that was going to open up and have more beds. We had a long term acute care hospital, we had a children's presence, we had over 100 different clinics spread out over almost a 200 mile radius, as well as our own dialysis program. So we didn't use a commercial dialysis so we were up to 12 or so. So we supported all of that. So it was myself as the director and then I took Gone several teams. But I had two nurses, I had a what we call the contract specialist. And they had the GPO relationship and understood all of that, because we would work so closely with those contracts. We also had, I also had two analysts, one that I had do internal analytics, meaning they knew all the internal systems and knew how to get that data, and how to organize it. And then I had a data analyst that did what I called out system. So any of those third party GPO other systems, they would get the certifications and learning how to run those. So it would help to blend together for any of the teams or ad hocs, or programs and initiatives we were working on, we would have a good slice of where we sat in regard to what other organizations of our size structure services things we're doing and where we kind of are, where were their physicians compared to those physicians. And then where was all of our internal data that was helping to identify, here's the gap here, or here's where we need to go. And we're getting there, or we need to start all of this up, all over. And we did interact with pharmacy, and our biomed on equipment as well, good value analysis actually patterns, some of what they do off of what pharmacy and therapeutics the P and T committees use, same sort of thing where you have clinical based evidence of why this product or this service, or this drug, or this piece of equipment. And then you have this whole data sort of mash up that you have to look at. But you have to be able to have great eyes, I call it in order to put it in a very systematic process in order to really get after everything. And when you put all the right people together, they can say, Oh, well, you forgot that we also do this, or we currently reprocess these devices. So if we onboard a new device that doesn't get reprocessed, how does that affect all of our costs and things. So you have to understand what you are doing extremely well. And then how do you sort of cross to something new, and not lose your efficacy plus all of the other processes and stuff you have in place, but maybe you gain new net new and things.
Patrick Kothe 37:55
So Barbara, for the next part of this discussion, I'd like to kind of focus on bringing a product in with the with the following assumption. The assumption is that no two value analysis committees processes look the same. They're all a little bit different. And they may have internal resources like you have, they may have dedicated groups, like like you had, or they may be pulling from the different clinical areas, depending on what projects are, are going on. But there are some commonalities, I think about the processes that people go through in making decisions. Not all processes are the same, but there's gonna be some commonalities between them. So let's let's talk about bringing a new product in. And I think the biggest thing from the first part of this conversation is you better understand who's doing it, and why they're doing it and what competing priorities they have, in order for you to fit within their system, not you trying to jam something in into, into
Barbara Strain 39:04
most often asked question, no matter whether it was 20 years ago, or yesterday, or today, cuz you're asking it is, who do I talk to? How do I talk to them? Where Where do I go, because so many times they think they're talking to the right person. And then when they want to sort of get to the next level. They're not talking to anyone else anymore. It's only that individual or that sort of department. So my advice is usually ask questions such as whoever you're talking to, whether it's supply chain, contracting, purchasing, value analysis, or the physician, the nurse, whatever contact you've made, because some things just go directly to a clinical person that is going to use a product or service first. But ask them, What is the process in your organization? That is the decision making process. And if they say I'm the decision making process, it probably isn't exactly the way it happened. So noodle add a little bit more. But you know, what is it a process? So, one thing I say about the medical device, folks, is learn some jargon. So we're saying a lot of the right things today, you know, value analysis or clinical resource or who helps to make your clinical decisions? Is there a committee? Are there committees? Who else do I really need to talk to? Or what is the process is their online internet, where I go in and I fill in a request, you fill in a request leader in the provider organization? How does that process really happen? So you have to understand that they've got some sort of a process, whether they even think it's a process or not, they've got a process, the supply chain person might say, Tell me everything about you know, give me the cliff notes version, send me information, send me a short PowerPoint, a sell sheet, whatever it is, and all make sure it gets to the right people internally, you can ask, well, who are those people, they may not give you their name, and you know, serial number and their email and phone number and that sort of thing only because it may be their policy not to because these people would get inundated. Or just because they do have a process or whatever. It also depends on if they're a huge IDN, and they have 50 hospitals, there might be a whole corporate process you have to go through. And individual hospitals have their own methodologies of getting that back to corporate. And depending on how corporate does things corporate may say, on these particular types of items. And maybe they only have a few key characteristics. Maybe individual hospitals might be able to do their own discussions and decisions. But it still has to follow certain patterns. Others may say it all needs to go through corporately, but they may have maybe even four people or six people that might cover 50 or so of those hospitals, but they break them up. So Julie, you take these five hospitals, and you work through them, because those five hospitals are very similar makeup, you know, they birth babies, they do lap procedures, you know, not very high acuity and then marry you go work with these three, because they do heart transplants and a variety of these things. And so they have more commonalities. So you just have to understand what does that structure really look like? Or do you have an individual hospital that has, you know, 150 beds, they don't have a lot of, you know, big centers around them, they work very closely with like their local health department and physician offices, the supply chain person might do every hat, they're the ones that make sure the stuffs ordered. So they do purchasing, they do contracting, they might have a few folks that help. But their clinical folks is they rely on whoever's the chief of nursing or the head of nursing, and they work together. Um, I think somebody put it Well, I was talking with somebody last week, and they said, roughly, if we rounded up per CMS and all those sorts of registration agencies, there's close to 6000 hospitals that we know of. And what I try to say is every hospital can not possibly know every single supplier, every single product line, etc. as well as every supplier cannot possibly know, every hospital, what they look like what their practices are, they can get a lot of different kinds of data, you think you know them fairly well. But until you start making those connections and things so there's a lot of different ways to do that. But I know and I hear and I've witnessed that frustration from suppliers who asked the question that you just asked that. I don't know who who to talk to and then I get stopped at various areas. And what I've tried to work through with value analysis is you may not be in that hospitals Rolodex of you know, it might not say, value analysis, contact this person. If right, then you have to know, procurement, purchasing, contracting, they're probably going to be very well aware of who else you probably need to talk to, they can help make connections for you. Because you have to work closely with them to know from at least a value analysis point of view as well as supply chain. When or contracts really up, you know, what was the last time we worked on things is that a GPO or not GPO and that sort of thing. So you have to ask some questions up front, and you still might not make it to the right person. But there's a process somewhere.
Patrick Kothe 46:02
That's really kind of a great overview. And one of the things that you mentioned, you don't want to burn any bridges as you're going through this process either. So there's a couple of ways that you can bring a product in in. One is through the clinicians, the other is through supply chain. And sometimes supply chain gets a little bit bent out of shape. If you go to the clinician first, sometimes the clinician gets a little bent out of shape if you go the other way, first. So bottom line is I think you need to go to both places pretty simultaneously to get there. But let's assume that you've introduced a product, you've got a product that as a clinical benefit hits the quadruple aim. So it goes into the process. And and now it gets it gets triage to say this is going to be a project that we're going to take up right now or this is not. So let's assume that it's a project that they're going to take up. It's an important project. And that and as you mentioned, there are internal metrics that are going to be used or internal data that's going to be used, and then there's going to be external data that's going to be used from a company standpoint, you know, we can't do the internal stuff, we can't tell you how many procedures are done, how many complications there were, what the dollars associated with those, that's all internal stuff, but some external stuff, we can provide things, we can provide all the information on our products, all the clinical studies, all the residents that stuff. So if we're in and now we are in a position to be able to share some of that stuff, how do we share it? Who do we share it with?
Barbara Strain 47:33
What clinical value analysis is really going to ask for is peer reviewed articles that are of the highest on the pyramid, which are your, you know, high level overviews that take in just lots of different articles that were published, and kind of review all of them. The next one is your retrospective sort of studies that were done that were random various things. So peer reviewed articles that weren't sponsored by the by the supplier organization, is the most sort of pristine. If it's like, I went to a meeting and I saw a product, it's a little farther down the pyramid in sort of the base, or I read an article, or whatever. But we need that clinical based evidence. Now, people are gonna say, well, that eliminates you know, what percentage of all the things that are going on today. So many things are so brand new, they don't have a predicate device, or they don't have any peer reviewed because they haven't been out very long. They've gotten whatever approvals they needed, whether they were cleared by the FDA approved by the FDA, gone through processes didn't have to go through processes, they're ready to sell that product go to market, but they don't have anything because of the type of product or app or service or whatever it is. And then what we encountered this where I was working a good five or more years ago, where there's always something that's coming out that a physician and or a supplier would bring in and say, well, we don't have anything peer reviewed yet. We wouldn't just say sorry, you got to go away until you have some proven things. There are things that you can on board, if you know a lot of other facts about it. So for example, if there is a product that will prevent readmissions that will prevent using very high dollar pharmaceuticals, outside drugs to treat things Something that will keep the patient or what I call the consumer at home in their community, and not have to keep coming into the hospital, there are a lot of products like that. And so what we would do is we would do almost like a, an evaluation, but it was, we signed a contract, we purchased the product, we arranged all the things we needed to do to do a procedure or to take care of the patient. But we made sort of a pact internally, with senior leadership that we will pay for this particular product or service. And we're going to pay more than what we currently paying in. However, we were treating this individual, except now, it's going to prevent re surgeries every three months, or it's going to prevent these costly drugs or whatever. So if we can prove that because this is not a very maybe high patient population, procedure or treatment, it it could be you might only see 810 12 patients in a year. So what we would do is we would go back to that key champion, physician or whoever it was, and say we're going to meet in three months, same group would get back together, we agreed this, this and this, how many patients have you seen? What were the outcomes, and we'd have a lot of that data ahead of time. But we wanted to hear experientially, so they could tell us, you know, patient feedback, what was the progress, that sort of thing. And if we were still keeping on track, we kept buying the product we kept. In our executive reports, we would report back not only the things that we wanted to work on, but what were the outcomes, we were seeing that we said we were going to see both financially and non financially as far as patient outcomes. And as long as you're true to those processes and looking at that, then you're actually sort of developing that clinical based evidence at the same time. And you're able to maybe start even helping to publish papers, or at least, you know, presenting something in a meeting or whatever that's not sponsored by the supplier, but from the own experience that you're having either as a physician or an organization. So you can look at all of those different things and not just say, Sorry, you don't pass the clinical based evidence test, then we're going to be looking at other analytics. So when we're going to ask for capacity to produce a product, these are more questions that are being asked these days. What's the where do you manufacture your product? Do you have in US storage Do you produce in us? You know, what is your track record over the last two years have they been backorder recalled any sort of plant deficiencies? These are all questions that get asked by value analysis and others when we're working on all of these projects. So it's if you're going to have most of these come up is because you've gotten in situations where you've on boarded something, and then two months later, they go, gee, we're gonna have to backorder this because we just didn't have enough capacity to keep up with, you know what you need it. But if you're all transparent up front, and you know, currently, here's our caseload and how many we think we're going to have, well, if you onboard two or three new physicians, or put in some new practice, and all of a sudden those volumes go up, you've got to be able to think ahead of time to say you can't really start that practice next month, when the new you know, physician comes in, we're going to have to wait to build up capacity so that you can use that product and things. So there's a lot of juggling in the air. So in addition to wearing my value analysis hat, I also directed supply chain operations, linen operations, and surgical supplies. So I had a really good idea at the same time doing value analysis, all those different factors that we sort of had to keep together. And if you're not that person doing that directing, you've got those key people who know the answers to those questions. And those are part of you're sort of the group that you want to keep very close together because you need to know a lot of those factors in order to do things in a way that's going to Be very what I call elegant on both the supplier and the provider site and have it be successful.
Patrick Kothe 55:08
Barbara made so many great points in this conversation. And this is just the first half a few of my takeaways. First orientation, she spoke about sitting down with somebody right up front and doing an orientation, I think this is just a fantastic thing to do. And it's an opportunity for both sides to share process priorities and expectations. So as you're entering into a conversation with somebody in value analysis, if they're if they don't offer, see if you could sit down and and just talk about that orientation process and making sure that you're on the same page as you start off. The second thing is, you know, just what the definition of value is. And that's the value is equal to the quality divided by the cost. And you break those things down. From a quality standpoint, it's not only just it's not just product quality, that's not what we're talking about. It's from their standpoint, is clinical performance, what is what is the quality that you're providing? What's the clinical performance that you're going to be providing, with a number of other things built into that into that quality? And, and the second thing is the cost and we can't just look at, you know, just what the price of the devices, but what's the cost? What's the the the cost benefit of the clinical results? Are you on the cost side or on the benefit side of that? And then what's the cost of adoption, that's not free either. The third thing is just the process. And I would encourage you to go back and listen to the questions that she suggested that you ask, in order to get to the right people. Because getting to the right people and understanding who is in that process and what the process is is going to be your roadmap to success. Next week, I'll have the rest of our conversation. Believe me, there's so much more she shares that will give her give you a better understanding of how you can work with the value analysis team. It's an episode I don't think you're gonna want to miss. Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the mastering medical device, podcast and Apple podcast Spotify or wherever you get your podcasts. Also, please spread the word and tell a friend or two to listen to the mastering medical device podcast as interviews like today's can help you become a more effective medical device leader. Work hard. Be kind
