Cooper University Health Care (Camden, NJ) was selected as a finalist for ECRI Institute's 10th Health Devices Achievement Award for demonstrating how cross-functional cooperation can help reduce supply costs.
The Health Devices Achievement Award recognizes outstanding initiatives undertaken by member healthcare institutions to improve patient safety, reduce costs, or otherwise facilitate better strategic management of health technology. ECRI Institute announced the winner and four other finalists for the 10th award in February 2016. For details about the other submissions that achieved recognition, see The Health Devices Achievement Award: Recognizing Exceptional Health Technology Management.
ECRI Institute congratulates the applicant, Linda Valenti, and the rest of the Cooper University Health Care team.
1. To reduce costs in the cardiac catheterization and electrophysiology laboratories by $1 million for the upcoming year, without eliminating any of the four device vendors from the current technology mix
2. To forge a partnership between the Supply Chain and Process Improvement functions to lay the groundwork for future cost management initiatives
1. Previous initiatives in recent years had already reduced supply chain costs by close to $1 million annually.
2. The most viable solution for further reducing costs appeared to be eliminating two of the four vendors from the technology mix, creating a greater opportunity for discounts. However, this option was unpalatable for the following reasons:
a) As a large, academic medical center, the organization did not want to limit access to the latest, cutting-edge technology and current opportunities in research.
b) Eliminating vendors could lead to lost business. Many patients are referred by community physicians, and those physicians would likely favor labs that use the technologies they prefer and are most knowledgeable about.
The organization approached the problem using Lean and Six Sigma methodologies and tools.
1. A full-day event was scheduled to bring together all the affected parties, including:
a) Supply Chain representatives
b) Staff from the catheterization and electrophysiology laboratories
c) Physicians from each of the physician groups (private and university), as well as from the catheterization and electrophysiology laboratories
d) Process Improvement team members, who would serve as objective facilitators during the event
2. Clear ground rules for the event were established:
a) Each member needed to attend or send an appropriate delegate.
b) Participants needed to attend for the full day (e.g., no calls except during breaks).
c) Decisions made on the day of the event would be binding.
3. Furthermore, it was agreed that all participants had equal authority, with no individual having more power than any other.
4. To prepare for the event, the organization collected information about every supply item used in the labs. This information was posted at the event by supply type (e.g., catheter), vendor, and cost.
5. The event proceeded as follows:
a) A facilitator from the organization's Process Improvement team outlined the goal for the day—to identify ways to reduce costs by $1 million—and directed participants through the program.
b) Participants were split into groups of a manageable size and taken through a gallery walk.
(1) Each group was led to posters containing information for a particular set of supplies.
(2) Participants would review the information and add Post-It notes with their comments—statements such as "I really need this" or "I am OK with swapping vendors on this."
(3) The group would then rotate to the next supply item and add their comments to those that had been left by the preceding group(s).
c) Participants then reconvened to review the posters, discuss comments, provide clarifications, and ultimately brainstorm and collaborate on ideas for driving down costs.
d) The team identified solutions to meet their goal and voiced their commitment to stand by their proposals.
6. Following the event, negotiations with the vendors were conducted to realize savings in the areas identified.
The team at Cooper reported several key outcomes of this initiative:
1. $1.2 million in savings in the cath lab
2. An additional $443,000 savings system-wide
3. Enhanced collaboration between the Supply Chain and Process Improvement functions, as well as development of a structure for cooperative projects that can be applied to other challenges
1. During the gallery walk, the overarching commentary from physicians was surprise at the price differences that existed between items and between vendors.
2. Ideas discussed for driving down costs included:
a) Switching one vendor's pacemaker for a less expensive one from a different vendor, but keeping the initial vendor's catheters
b) Using high-end devices only for specific (appropriate) patient populations
3. The vendor negotiations that followed the event were made simpler because the vendors were aware of the full-day event and knew that the organization had 100% staff and physician commitment.
4. Forging a partnership between the Supply Chain and Process Improvement departments led to positive financial outcomes and helped increase end-user engagement in the purchasing process, which can help maintain the safety, quality, and appropriateness of the products that the organization purchases.