Ar­ti­cle on sup­ply chain costs omit­ted the CQO move­ment

Modern Healthcare - - COMMENT -

While heart­ened by the in­clu­sion of a sup­ply-chain ar­ti­cle in Mod­ern Health­care, the Nov. 24 story “Hos­pi­tals strug­gle with sup­ply costs” (p. 20) missed a tremen­dous op­por­tu­nity. Un­for­tu­nately, the ar­ti­cle fo­cused on ris­ing sup­ply costs re­lated to treat­ing more and sicker pa­tients, and failed to men­tion the big­gest de­vel­op­ment in health­care sup­ply chain in the past decade: the CQO move­ment. Launched last year by the As­so­ci­a­tion for Health­care Re­source & Ma­te­ri­als Man­age­ment, an af­fil­i­ate of the Amer­i­can Hos­pi­tal As­so­ci­a­tion, the CQO move­ment is a strate­gic ap­proach to man­ag­ing the sup­ply chain at the in­ter­sec­tion of cost, qual­ity and out­comes.

Changes to provider re­im­burse­ment mod­els de­mand that the health­care sys­tem think dif­fer­ently about costs. To support providers us­ing this model, sup­ply-chain pro­fes­sion­als are up­ping their game, shift­ing away from pure vol­ume­based dis­counts in a race to the low­est price. In­stead, us­ing AHRMM’s def­i­ni­tions, we are act­ing on a more holis­tic view of the cor­re­la­tion be­tween cost (all costs as­so­ci­ated with de­liv­er­ing pa­tient care and sup­port­ing the care en­vi­ron­ment), qual­ity (pa­tient-cen­tered care aimed at achiev­ing the best pos­si­ble clin­i­cal out­comes) and out­comes (fi­nan­cial re­im­burse­ment driven by out­stand­ing clin­i­cal care at the ap­pro­pri­ate costs).

While the ar­ti­cle men­tions cer­tain tac­tics for man­ag­ing costs, such as stan- dard­iz­ing prod­ucts and man­ag­ing physi­cian-pref­er­ence items, it doesn’t ad­dress the sci­ence be­hind those de­ci­sions. Un­der the CQO ap­proach, sup­ply­chain pro­fes­sion­als work hand in hand with clin­i­cians to use met­rics that demon­strate the ef­fi­cacy of var­i­ous prod­ucts as they re­late to clin­i­cal out­comes, as well as the cost-ben­e­fit anal­y­sis of var­i­ous prod­ucts—i.e., whether spend­ing more now means spend­ing less later over the lifetime of a pa­tient. Th­ese con­cepts have par­tic­u­lar rel­e­vance as, to the ar­ti­cle’s point, hos­pi­tals are deal­ing with a twofold chal­lenge of grow­ing pa­tient vol­ume and higher acu­ity. Mar­ry­ing the sci­ence and the business of the health­care sup­ply chain is a ground­break­ing—and nec­es­sary—par­a­digm shift, one that all fu­ture dis­cus­sions of hos­pi­tal op­er­at­ing costs should be sure to in­clude.

Christo­pher O’Con­nor Pres­i­dent, GNYHA Ser­vices and Nex­era 2014 chair­man, AHRMM

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