Home' The Source : First Quarter 2014 Contents SOURCEBOOK PURCHASING POWER
compelled to advance to meaningful use stage 2,
which involves the adoption of clinical decision
support systems (CDSS), among other require-
ments such as HIPAA 5010 and ICD-10.
The intention of a CDSS is to use expert systems
to reduce clinical process variation and improve
the accuracy and effectiveness of clinical judg-
ment. Unfortunately, these highly advanced
systems sometimes interfere with the activity of
physicians. Getting physicians to feed into the IT
system has been and continues to be a challenge.
Unfortunately, the net result of more powerful
IT is an increase in the workload of primary care
physicians—having almost doubled the time they
spend in keyboarding clinical documentation.
Nurses also are stressed under elevated docu-
Supply chain managers should be increasingly
involved in selecting among the multiple and
confusing IT equipment, system and device
options, but this has not always been the case.
However, utilizing supply chain managers more
would help mitigate a core problem: Clinical
staff aren’t able to make clear recommenda-
tions. That’s because each alternative presents
a negative outcome—more work, more data to
keep track of and more things to learn. Supply
chain managers should engage with the chief
information officer and IT leadership to help
develop a clear process for system acquisition,
equipment turnover and work stream update/
upgrade—tasks that are critical to the long-term
success of the enterprise. It’s essential that sup-
ply chain managers be more engaged in seeking
IT alternatives and be involved in conversa-
tions about contract and price specifications.
In the foreseeable future, discussions with implementors, con-
sultants and integrators deserve your attention and assistance. In
the end, a strong IT platform—with its many potential process
automations—will result in sustainable cost reductions. Quality,
patient flow and reimbursement will also improve, if the right
system meets the right context.
Ring 4: Bundled Payments. The bundled payment/episode-based
payment demonstration program is perhaps one of the most exciting
aspects of reform. This program has four models that the Centers for
Medicare and Medicaid Services (CMS) will be using to determine
the next phase of the reimbursement system:
• Model 1 focuses on the acute care episode.
• Model 2 focuses on the acute/post-acute transition.
• Model 3 focuses on the post-acute domain.
• Model 4 is a prospective gain share where health systems can
take population risk for episodes across different
Participation in the program requires an
agreement to a price/cost target (less than
current expense) for the episode. If awarded,
participating providers receive a reduced rate
for their charges from CMS, but they are allowed
to share gains (higher margins) among provid-
ers. Consequently, it’s in everyone’s financial
interest to forge cooperation among the care
team members that results in lower costs in
one or multiple settings. Supply chain managers
participating in these programs have specifi-
cally targeted physician preference items (PPIs)
for cost reduction. Physicians are even more
willing to assist in cost reductions for PPIs and
procedures because their economic interests are
aligned with that of the entire care team. A gain-sharing capabil-
ity gives supply chain managers a powerful tool to search for and
deliver sustained cost reduction and value for the health system.
Ring 5: Accountable Care Organizations. ACOs’ shared savings are
focused on reducing the total costs to treat a population. Because
financial rewards are tied to optimizing costs by stringing episodes
together, supply chain managers are needed to aid in cost contain-
ment. Care coordination and management are also needed, but the
cost of the touch point with the health system still looms large.
Supply chain managers are a prime resource in helping provide a
flexible and effective array of supply and service alternatives that
support the mission of the ACO.
Today, supply chain managers are required to learn more about
IT, facilitate coordination of care teams around preference items
and reduce the costs of population health. Doing so will enable the
discipline to enact sustainable cost reductions. •
Continued from page 8
It’s in everyone’s
among the care
that results in
lower costs in
one or multiple
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