Embracing the cost quality outcomes movement
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Embracing the Cost-Quality-Outcomes Movement. The Future of Healthcare Supply Chain. Healthcare Landscape 2012: Changing Times. Under reform, fully phased-in hospital cuts (2019): At BEST , baseline payment MINUS 14% (across-the-board cuts only)

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Embracing the Cost-Quality-Outcomes Movement

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Embracing the Cost-Quality-Outcomes Movement

The Future of Healthcare Supply Chain

Healthcare Landscape 2012: Changing Times

Under reform, fully phased-in hospital cuts (2019):

  • At BEST, baseline payment MINUS 14% (across-the-board cuts only)

  • At WORST, baseline payment MINUS 20% (across-the-board PLUS quality cuts)

    Hospitals need a comprehensive strategy

    to minimize costs while maximizing

    quality patient outcomes

Supply Chain Can Drive that Strategy

Transformational Events

The economic downturn (cost driver) and healthcare reform (quality driver) are events with far-reaching implications for supply chain executives and serve as the driving force in the transformation of the supply chain executive role

Source: HHN Magazine, 11/29/10

The Evolution of Healthcare Supply Chain

What is the CQO Movement?

The CQO Movement looks at the intersection of

CQO meaning the relationships between:

  • Cost (how it relates to the cost of services, products, supplies)

  • Quality(how it relates to the quality of patient care, the services provided) and

  • Outcomes(how it relates to patient outcomes, patient care, patient experience, reimbursement)

    It is important to consider these relationships together

    rather than in separate silos.

How AHRMM is Reinventing Itself Around CQO

  • Education Initiative with three areas of focus:

    • Quality & Cost

    • Reimbursement & Outcomes

    • (C) Continuum of Care

  • Webinars and FAQs

  • Committees

  • When Supply Chain Owns the CQO Intersection: Case Study Examples

    CQO Movement Asks:

    What is unique about its clinical performance to justify its cost?

    Challenging Hernia Patient

    • Ability to rapidly revascularize

    • Ability to integrate into host tissues

    • Resistant to infection

    Abdominal Wall Reconstruction

    Hernia patients with major complications & comorbidities account for about 7% of all hernia repairs

    Potential Economic Impact to Hospital

    Potential cost of post-op complications related to ventral/incisional hernia repair

    Sample Case Costs


    Cost of product $2000

    100% Reimbursement -$2000

    Cost of treating infection $11, 739

    Total = $11,739


    Cost of product $13,000

    $32.25/sqcmReimbursement -$10,240

    Cost avoidance $0

    Total = $2760

    Cost Justification

    • Consistent outcomes

    • Single stage

    • Decreased complication rates

    • Avoidance of further surgery

    • CQO Asks:

    • How Do We Reduce Needlestick Injuries in Healthcare?

    • >800,000/yr in US

    • Risk of blood borne pathogens

    • Education only means of addressing

    • CQO Asks:

    • How Do We Reduce Needlestick Injuries in Healthcare?

    • New syringes with improved safety mechanisms

    CQO Asks:

    What is Unique About its ClinicalPerformance to Justify its Cost?

    Safety Syringes

    • 1 Needlestick injury/6000 injections

    • Average cost of testing/treatment after injury equals $3000

    • Additional costs of treatment can add up to hundreds of thousands

    Case Costs: Conventional Safety Syringes


    Note: * Negotiate minimum reduction of $3,500 mesh per unit cost

    Case Costs: New vs. Conventional Safety Syringes


    Note: * Negotiate minimum reduction of $3,500 mesh per unit cost

    Case Costs: Conventional vs. New Safety Syringes


    Note: * Negotiate minimum reduction of $3,500 mesh per unit cost

    Substantiating Evidence

    Tuma SJ, Sepkowitz KA. Efficacy of safety-engineered device implementation in the prevention of percutaneous injuries: a review of published studies. Clin Infect Dis 2006;42:1159–1170.

    Elder A, Paterson C. Sharps injuries in UK health care: a review of injury rates, viral transmission and potential efficacy of safety devices. Occup Med (Lond) 2006;56:566–574.

    Adams D, Elliott TSJ. Impact of safety needle devices on occupationally acquired needlestick injuries a four-year prospective study. J Hosp Infect 2006;64:50–55.

    Whitby M, McLaws ML, Slater K. Needlestick injuries in amajor teaching hospital: the worthwhile effect of hospital-wide replacement of conventional hollow-bore needles. Am J Infect Control 2008;36:180–186.

    Jagger J, Perry J, Gomaa A, Kornblatt Phillips E. The impact of US policies to protect healthcare workers from bloodborne pathogens: the critical role of safety-engineered devices. J Infect Public Health 2008;1:62–67.

    Lamontagne F, Abiteboul D, Lolom I, et al. Role of safety-engineered devices in preventing needlestick injuries in 32 French hospitals. Infect Control Hosp Epidemiol 2007;28:18:23.

    Cost Justification

    • Consistent outcomes

    • Improved quality of hospital experience

    • Best practice medicine

    Supply chain is perfectly positioned at the intersection of cost, quality, and outcomes to take the lead on responding to the demands of health reform.

    AHRMM is leading the way.

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