The Value Analysis Program The Seven Pillars Model: A presentation based on The Value Analysis Program: A How-to-Guide for Physician Leaders on Starting Up a Successful Program, by Terrence J. Loftus, MD, MBA. Copyright © 2016 – Loftus Health, LLC. – www.LoftusHealth.com. The Seven Pillars Model Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

The Seven Pillars: Are higher level elements that differentiate successful programs from unsuccessful programs. Serve as a foundational structure for successful program building. Focuses leadership on the organizational elements required to build a successful program. Are transferable from program to program. Help healthcare leaders become successful by building a useful skill- set that produces better quality, improved utilization and cost savings. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

The Seven Pillars Purpose: Understanding why our program exists. Engagement: Motivating stakeholders to achieve success. Communication: Educating and learning through mutual feedback loops. Infrastructure: Building a strong foundation for effectiveness and sustainability. Accountability: Ensuring responsibility through informed governance. Leadership: Building trust in competent and inspirational leaders. Performance Improvement: Getting better through intentional effort. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Purpose Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Purpose To identify the most cost effective supply solution. To develop the resources, financial reserve and skill sets needed to improve clinical operations and care delivery. To find the right balance between quality and cost that will lead to the delivery of excellent patient care, and a great work environment for those who provide that care. To evolve into a Value Analysis Program that will become fully integrated into population health management. In summary, it is because a formal organized approach to value analysis produces better outcomes at a lower cost compared to not having a program. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Engagement Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Ten Rules for Physician Engagement Rule #1: If you want physician engagement, then avoid behaviors and language that are known to disengage them. Rule #2: If you want physician engagement, then proactively mitigate the effects of unavoidable actions that are considered disengaging to physicians. Rule # 3: If you want physician engagement, then start with what they are already engaged in doing. Rule #4: If you want physician engagement, then help them solve a problem they are already attempting to solve. Rule #5: If you want physician engagement, then appeal to their sense of fairness and what is right for the sustainability of their practice, their service line or even the hospital in which they practice. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Ten Rules for Physician Engagement Rule #6: If you want physician engagement, then appeal to their interest and passion for science. Rule #7: If you want physician engagement, then appeal to their competitive spirit. Rule #8: If you want physician engagement, then empower them to create their own solutions. Rule #9: If you want physician engagement, then listen to them when they are upset, because they are already maximally engaged and may be harboring ideas worth considering. Rule #10: If you want physician engagement, then communicate with words that positively reflects the things they value. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Communication Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Communication: Language The Language of Supply Chain Volume & Market Share Loss Aversion Price Point & Fair Market Price Bulk Buys, Rebates & Bundling Group Purchasing Organizations (GPOs) & Local Contracting Sole Source, Dual Source, All Play & Capped Pricing Model Strategies Stock Keeping Units (SKUs) Physician Preference Items (PPIs) Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Communication: Stakeholders Value Analysis Committee Agenda & Meeting Minutes Medical Staff Utilize Medical Staff Services & Newsletter C-Suite & Senior Management Consistent message as with Medical & Nursing Staff Nursing & Ancillary Staff Utilize system process already in place Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Infrastructure Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Infrastructure Infrastructure is the foundation on which any program will be built. Infrastructure refers to all the people, process, technology and cultural elements that are required for the successful implementation, management and sustainability of a program. The specific elements are categorized according to people, process, technology and culture. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Infrastructure: People Physician Lead Supply Chain Services Lead Nursing Representative Contracting Representative Data Analyst Research Analyst Multidisciplinary Representatives Administrative Assistant Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Infrastructure: Process Regular Meetings Maintain Agenda and Meeting Minutes Established Reporting Structure Communication Plan Data Review Goal Setting Work-flow Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Infrastructure: Technology Inventory Management System Electronic Medical Record Risk-adjustment & Benchmarking Capability Centralized Storage for Documents Tele-conferencing Capability Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Infrastructure: Culture Quality Improvement Program Recognition Awards Truven, Baldridge, Gartner, ECRI, etc. Value Analysis Supportive Environment Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Accountability Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Accountability Which Model? Centralized Model Decentralized Model Pros: Scale, Negotiating clout, Inventory management Cons: Legal issues with coordinating facilities in holding companies, May not be supported by independent medical staffs Decentralized Model Pros: Appeals to more independent medical staffs, May be more desirable for communities with specialized needs Cons: Less impact on scale and negotiating clout. Best model is the one that creates real results and achieves your purpose. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Value Analysis Work-flow Is this product a commodity item and up for contract renewal? Is this a request for a new product for an established service line or support function and is not considered a “preference item” or “strategic”? Yes No Yes No CC   TRC   Is this a request for a product (new or existing contract renewal) which is a physician or clinician preference item? Is this a request for a product that impacts strategy or population health? Is this a request for a product to be added to the Supply Formulary? CC: Commodities Committee TRC: Technology Review Committee VAT: Value Analysis Team SEPC: Supply Exception Process Committee SC: Strategy Committee VAC: Value Analysis Committee Yes No Yes No Yes No VAT   SEPC   SC   VAC   Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Leadership Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Leadership: Expectations Physicians Value patient care, scientific method, autonomy. They want a say in what products they will be using and be informed in a timely manner about change. Administration Will be held accountable for the success of the business operations. Define and shape their expectations of success in specific terms in a manner that appeals to all stakeholder groups. Nursing Value patient care & will be accountable to administration. Understand their incentives and align goals whenever possible. Conflict Resolution Value Analysis Committee Data is a great starting point, since everyone is usually interested in seeing it. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Performance Improvement Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Performance Improvement Contracting Start with your contract calendar Determine impactable spend Break down contract calendar by committees determined in work-flow Rank list from highest to lowest annual spend Prioritize projects Utilization Develop idea center Screen ideas for high impact and high probability of success Scale up ideas from department/facility to region/system Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Performance Improvement SMART Goals Specific Measurable Achievable Realistic Time Bound Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

Dashboard Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com

QUESTIONS Please contact Dr. Terry Loftus at TerryLoftusMD@gmail.com or visit his website at www.LoftusHealth.com. Copyright © 2016 - Loftus Health, LLC - www.LoftusHealth.com