For What It’s Worth

When Fred Crans approached me to write a piece on relevance, my first thought was, “He’s setting me up for the Marx Brothers bit from ‘Duck Soup.’ ”

Chicolini: Now I ask you one…What is it has a trunk but no key, weighs 2,000 pounds, and lives in a circus?

Prosecutor: That’s irrelevant!

Chicolini: A relephant? Hey! That’s the answer…There’s a whole lotta relephants in the circus.

In this month’s posts, Ed Hisscock and Fred Crans have laid out cogent arguments for there being a whole lot of relephants relevance in supply chain. Reading these, as well as guest posts, it occurred to me that the contributors to this newsletter are all working from two simple, interrelated premises based on cost reduction in healthcare:

  • In the era of Big Data, you need to find actionable data, which requires organizations to ask meaningful questions up front so that data can be organized to provide answers (this also points up the need to adopt and properly implement industry wide data standards).
  • The cheapest supply is the one that isn’t needed.

Then there’s Ed Hisscock’s favorite phrase, “endeavor to one,” which he’s using as a framework for thinking about the proliferation of desktop apps for solving very specific problems. But what if we extend that phrase to “endeavor to the one”? No, I don’t mean The One in a “Matrix” sense, but rather to the individual – the patient in aggregate. To quote the pioneering British epidemiologist Austin Bradford Hill: “Health statistics represent people with the tears wiped off.”

Finally, let’s add the concept of “preventive maintenance,” or well care, to the mix – preventing patients from winding up in the hospital whenever possible. This is an area where Big Data can play a huge role by identifying at-risk individuals – at risk in terms of being either current healthcare “super-users” or situational users as a result of non-compliance or environmental issues.

With those concepts in mind, let’s think out loud about how they can contribute further to a clinically engaged, patient-focused supply chain.

Value analysis has been the primary conduit for supply chain to engage clinical departments. That engagement typically is item-focused, but it does set a precedent for supply chain involvement and financial discipline in clinical decision-making, as well as having people with clinical backgrounds reporting to supply chain leadership. Big Data plays an important role here as well, being used to determine item usage and cost by physician and/or case. This data analysis is also enabling organizations to perform demand forecasting and inventory optimization, matching supply levels to patient demand and reducing overall inventory levels and costs. Is it possible to go one step beyond to identify the patients driving the demand, and engage them to identify root causes of their visits? Asked another way, is there a role for public health professionals in supply chain similar to that played by clinicians in value analysis?

I’ll share a of couple stories that point the way. The first comes from conversations I had with the chief financial officer and the vice president of supply chain of a 600-bed hospital system in the South. Looking into the system’s bad debt, the CFO found that a good portion of it came from chronically ill patients visiting the ED. Working with clinical, financial and supply chain leaders, she created a plan that substantially reduced bad debt. In the plan, the health system engaged their “super users” by committing to provide the following, if the patient agreed to take their medications and keep their physician appointments:

  • Provide medication at low to no cost, if necessary
  • Provide transportation (cab fare) to and from doctor appointments, if necessary

The second story comes from a large health system in Florida, where supply chain has taken responsibility for pharmacy. There, the VP of supply chain has created a customer service program to ensure that patients either have picked up or made arrangements to pick up their medications prior to leaving the hospital. There’s also a follow-up program under which patients receive phone prompts that their medications need refilling – and that identifies if a patient is not taking medication as prescribed (i.e., if he or she is “halving” doses to make the medication last longer and avoid refill costs). Conceptually, this type of engagement is also similar to recall management at the patient level. Of course, there are privacy concerns that should be addressed, but it’s likely that many of those objections can be overcome at the personal level.

There are literally thousands of similar stories, but we need more of them. We need to challenge conventional wisdom, going as far as paying insurance premiums (although struck down by the courts) or utility bills for medical super-users (to lessen the impact of severe heat/cold). These folks will wind up in the hospital anyway, so let’s mitigate the costs.

The key concept behind relevance is understanding the context in which you’re working. Relevance in healthcare is to be found in patients, pro-actively engaging them to avoid unnecessary hospital/ED visits.

Thomas Sisk is Senior Solutions Consultant with Optimé.

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