Utilization Management or Better Contracts in the Era of Value-Based Care?

Utilization Management or Better Contracts – Which tool should supply chain executives focus on, in 2019?

As providers strive to improve their outcomes while reducing costs, supply chain leaders are focusing in on PPI contracting as one of the components of financial and clinical success in the era of value-based care.

However, supply chain leaders continue to express their inability to generate the expected savings from implant and ancillary product contracts already negotiated, due to product variation and implant waste. I founded MedPricer, an electronic sourcing company that routinely saw the costs of supplies and services reduced by 20% thru competitive bidding, only to see margins eroded by poor communication, inadequate processes, and inappropriate clinical variation.

Medtel addresses these challenges electronically, by putting the entire team on the same page at the same time, so administration can monitor product variation requests and utilization.    

Historically, surgical care often begins with a fax or phone call from the surgical office to the OR and vendors. Hospitals, surgeons, and the care team still too often rely on the fax machine to transmit critical information. However, faxes are the weak link to creating a unified approach to care: crucial information can be left out and/or misinterpreted. This leads to last-minute scrambles for equipment or supplies resulting in case delays, cancellations, waste or even wrong-site surgeries. (Reducing the Risks of Wrong-Site Surgery: Safety Practices from The Joint Commission Center for Transforming Healthcare Project, August 2014). As a result, CMS’ Seema Verma called for the elimination of the fax machine by 2020.

Supply chain leaders are beginning to recognize that value-based care is an emerging opportunity to introduce utilization management to their organizations by replacing the fax machine with a modern communication platform that connects and aligns surgeons, administration, the OR and suppliers. Medtel’s surgical care management platform leads the way for supply chain executives to achieve a safe, secure and systematic process proven to reduce costs, while improving surgical outcomes. A recent article in OR Manager describes the impact supply chain leaders can make on the surgical care process with Medtel.

The answer to the question - which tool supply chain executives should focus on in 2019 - both.