Medtech Must Move Beyond the Device to Bring More Value to Health Systems
February 6, 2018 Medical Device Business - Here's how Johnson & Johnson Medical Devices Companies are working with healthcare customers to achieve the goal of value-based care.
As value-based care becomes more prevalent in the U.S. healthcare model, health systems are focused more than ever on achieving better outcomes, efficiencies, and patient experience. To help health systems meet their triple aim goals, suppliers recognize that they must move “beyond the device” and bring more value to health systems. That value is defined as broader capabilities and solutions that help health systems address their business challenges, including operational and supply chain inefficiencies, readmissions, infection risk, and clinical variation.
Collaboration based on shared goals can be the key to success for both health systems and innovative suppliers when they combine their expertise, knowledge, and capabilities to improve the performance within the health system.
Achieving value-based care starts with listening. Listening to health care providers across specializations and at all levels of a health care delivery system. Let’s take a closer look at how this has worked for two health systems.
Collaboration to Optimize the Supply Chain:
Supply chain costs are some the biggest expenses in a health system’s annual operating budget and an ideal opportunity to collaborate to achieve better results. As much as 45% of a provider’s operating budget can be attributed to total supply chain costs, which could be reinvested into improving patient care. And nearly one-fifth of clinician time is spent on supply chain and inventory management.
Reducing supply chain inefficiencies can save money and time, thereby increasing time clinicians can spend with patients, on research and education, or even training new staff. It’s not surprising that for many health care delivery systems, supply chain management, with its ability to save money, is a key component of overall operational management.
When the Johnson & Johnson Medical Devices Companies (JJMDC) began collaborating with Spectrum Health—a health system based in Michigan comprised of 12 hospitals, 180 ambulatory and service sites, and 3,400 physicians—our team listened and learned they could reduce logistical costs and stock outs related to our products. Together they analyzed data from across the Spectrum Health and JJMDC supply chain, identified the critical interdependencies between performance metrics and ordering behaviors, and provided insights on supply chain performance compared against a benchmark of similarly sized health systems.
Once gaps were clearly identified, JJMDC and Spectrum Health set clear performance goals, supported the use of data across the health system, and improved processes that made JJMDC medical devices more readily available at the point of care. Spectrum Health achieved considerable improvements across all targeted goals. Compared to baseline measures, Spectrum Health reduced weekly product codes out of stock by 49 percent, reduced expedited order fees by 96 percent, and average days out of stock by 18%.1
Beyond supply chain efficiency, though, such optimizations may also benefit clinician satisfaction. A recent Ernst & Young survey found that 51% of physicians reported experiencing frequent or constant feelings of burnout in 2017, up from 40% in 2013.
Improving Perioperative Efficiency:
Aside from the supply chain, the operating room is another one of the biggest drivers of cost for any health system. There are many untapped opportunities for reducing these costs through improved perioperative efficiency. According to JJMDC’s recent Voices for Value Insights Series, a survey of U.S. health system executives and operating room clinicians, there is increased demand for strategies to improve perioperative efficiency, with two-thirds of executives (64%) and more than half of clinicians (56%) citing the improvement of perioperative efficiency as a priority for their health system.2 The survey also found that three out of four executives and clinicians believe perioperative efficiency can improve a number of health system operations, including overall performance (81%), cost (76%), and time challenges (75%).3 Additionally, two-thirds of respondents also believe that perioperative efficiency can improve outcomes: patient satisfaction (68%) and quality of care (67%).4
Improving perioperative efficiency can provide a measurable return on investment as a real-world evidence study conducted by JJMDC and UCSF Health recently demonstrated.4 Seeking to optimize operating room (OR) processes and deliver better care to patients, UCSF consulted with JJMDC to reduce operational costs and make improvements in OR efficiency. Both organizations then leveraged CareAdvantage from JJMDC to make improvements in surgical instrument tray set-up time and several other endpoints for total knee and hip procedures. While UCSF already was performing above benchmark for overall procedure OR set-up time going into the study, collaboration with the CareAdvantage team helped UCSF improve instrument tray set up time in the OR by three minutes for hip procedures and six minutes for knee procedures.
The study also revealed additional improvements: a 57% reduction in total number of surgical instrument trays, a 29% decrease in the number of instruments used across total hip and knee procedures, and a 46% reduction in the average number of open trays. This translated to an estimated cost savings totaling more than $262,000 annually.5
Begin Today: Moving 'Beyond the Device” to Reach Triple Aim Goals
As more and more health systems adopt value-based care models, the medical device industry is poised for great opportunities to work differently with health care providers “beyond the device.” It starts with listening and then observing and gleaning insights to further validate needs and solutions. When working together to address shared goals, health systems and industry can create benefits for both parties and ultimately generate value for the customer they both serve: the patient and their evolving role as healthcare consumer
References
1. Data on file. Johnson & Johnson Healthcare Systems Inc. Weekly stocking reviews with Spectrum CSC / J&J Supply Chain. April 2016 – April 2017.
2. The survey was conducted online between September 7 and 13, 2017 among 92 executives and clinicians at large U.S. health systems.
3. Ibid
4. JJMDC reported the results from this real-world evidence study conducted with UCSF Health on October 4, 2017, at the Academic Orthopaedic Consortium (AOC) annual meeting.
5. UCSF-specified Assumption: $75/tray; American Association of Orthopaedic Executives Premier database 2016Q1-2016Q4, Created on 6-12-17, updated 8-9-17; Premier Research Services. Premier Perspective Database. Charlotte, N.C.: 2016. Environmental impact estimates approved by UCSF.