Procurement Value Analysis in Healthcare

Procurement value analysis is a systematic, objective process for evaluating new and current products and services with a view to reducing costs without negatively impacting functionality. It should be evidence-based, patient-centered, customer-focused, process-oriented, and data-driven. The performance and total cost of an item over its whole life should be considered.

Creating an inclusive relationship between clinical and procurement staff is a crucial first step to ensure that both financial and clinical benefits are considered from the outset. The position of nurses on the frontline of patient care, using a vast range of clinical products on a daily basis, leaves them uniquely qualified to offer detailed insight to make value analysis a success.  The role of procurement nurse has therefore become common across the EU.

THE PROCUREMENT NURSE

The procurement nurse acts as a bridge between clinical activity and the contracting/commercial requirements of the healthcare organisation. The role requires a wide range of clinical experience, the ability to understand complex clinical treatments and excellent communication and interpersonal skills.[1] Procurement nurses come from a range of clinical backgrounds including theatre, critical care, ward managers or other roles that require engagement across all levels of a multi-disciplinary team. The role can cover:

• Liaising between procurement and clinical teams to agree and control standardised products and devices across an organisation;
• Supporting and coordinating complex clinical procurement exercises where critical appraisal or formal clinical evaluation is required;
• Ensuring that legislative and regulative procurement laws and guidelines associated with medical devices and patient care are considered and communicated correctly;
• Developing multi-disciplinary input into a clinical products and devices review process through clear protocols, policies and product groups;
• Actively promoting research activity to identify new innovations or technologies that advance safety and quality;
• Observing product utilisation in practice, collecting staff feedback and identifying training needs.

CLINICAL VALUE TEAMS

In the UK, value analysis of complex clinical categories is often undertaken through multi-disciplinary Clinical Value Teams (CVT). An example used by Oxford University Hospitals Trust is shown in the following diagram.[2]

As part of a strategic sourcing initiative, the procurement team developed strengthened relationships with clinical stakeholders and the structures/processes to work together to derive greater value. Clinician-driven processes were developed that utilise evidence-based, clinically sound, and financially responsible methodologies for introduction or consolidation of new supplies, devices and technology to provide the highest quality healthcare. They provide the forum through which clinicians are engaged in agreeing product specifications and the related supply management strategies, with appropriate representation and authority to make decisions and challenge non-compliance.

For non-clinical areas of expenditure (e.g. Estates & Facilities, ICT, Corporate, Agency & Temporary Staff), Category Value Teams were established based on similar principles.

CLINICAL PREFERENCE PRODUCTS

The Mayo Clinic in USA has a multi-disciplinary, multi-site value analysis team called the Mayo Clinic Commodity Committee, which is charged with reviewing and selecting products.[3] Despite the wording of its name, the committee reviews both commodity and clinical-preference products. Products defined as ‘physician preference products’, which are used by staff in various specialties, such as surgery, cardiovascular, radiology etc., requires a particular emphasis on clinical needs based on outcomes rather than wants based on personal preference.

Value analyst and former nurse manager Terri Nelson explains how she might approach clinical staff in relation to needs versus wants: “‘Don’t tell me something doesn’t work. Instead, tell me what outcomes you expect to achieve, and then which of these outcomes aren’t being met by this product.’ We then need to ask the question, ‘Did we select the right product?’”

What Nelson is trying to do, and what she wants the clinical staff to do as well, is to move beyond ‘I just don’t like it.’ Rather, she is looking for concrete and actionable data. “We ask for as much detail as possible. We share this detail with the manufacturer. Our commitment is to work with a manufacturer to resolve any issues.”

STANDARDISATION

A key aspect of value analysis is that of standardisation. One of the most challenging barriers to procurement efficiency in hospitals is a lack of equipment standardisation. This typically stems from conflicting product preferences among clinical staff in different departments. Examples of this type of conflict include the following:[4]

• A new staff member demands a different style of stretcher than the stretchers currently used, but research shows that the existing stretchers could meet their requirements with the addition of a simple accessory.
• A physician requests a specific transport ventilator because they used that model throughout their residency, but current ventilators meet all clinical requirements for the facility.
• A medical equipment supplier works directly with a physician to specify equipment, but the equipment does not meet procurement standards.
• The monitors used by a hospital were supplied by four different manufacturers and accessories are not interchangeable.
• Staff request the newest and highest-grade model of equipment as opposed to a mid-grade model that meets requirements.

When a hospital purchases from a variety of different equipment manufacturers in an effort to satisfy the individual preferences of multiple clinical departments, the end result is higher costs. Suppliers are less likely to extend package discounts to hospitals that do not purchase in bulk or with any consistency. Additionally, equipment servicing expenses are costlier because service contracts must be established for every manufacturer. Essentially, the hospital’s buying power is compromised due to a lack of standardisation.

Collaboration through value analysis teams between physicians, clinical engineering and procurement from planning inception through long term strategic planning ensures that medical equipment standards are created and maintained. Bringing in key stakeholders early allows both clinical requirements from physicians and standardisation from procurement to meet specific criteria before making a purchasing decision.

COMPLEXITY

Not all value analysis exercises are the same. Some require minimal engagement with clinical stakeholders, present few risks, and can be implemented quickly with little resistance. Others require deep engagement with clinical stakeholders, are highly sensitive and risky, and need significant adaptation and change as well as complex cost/benefit analysis. It is useful to categorise value analysis projects based on their complexity in order to understand the level of time and resource required to undertake them. An example is shown in the table below.[5]

[1] https://www.openaccessgovernment.org/the-value-based-public-procurement-nurse-in-europe/48856/

[2] https://www.ouh.nhs.uk/contact/non-clinical/procurement/documents/supply-chain-strategy

[3] https://www.jhconline.com/the-new-face-of-value-analysis.html

[4] https://insights.omnia-health.com/hospital-management/developing-effective-value-analysis-committees

[5] Premier’s Value Analysis Guide, 4^th Edition, 2020