Comparison of patient outcomes in academic medical centers with and without value analysis programs

Journal of Healthcare Leadership Dovepress open access to scientific and medical research O riginal R esearch Journal of Healthcare Leadership downloaded from https://www.dovepress.com/ by 54.37.163.172 on 12-Jul-2018 For personal use only. Open Access Full Text Article Comparison of patient outcomes in academic medical centers with and without value analysis programs This article was published in the following Dove Press journal: Journal of Healthcare Leadership 31 August 2012 Number of times this article has been viewed Adrienne S Murray Michael Griswold Imran Sunesara Ed Smith University of Mississippi Health Care, University of Mississippi Medical Center, Jackson, MS, USA Background: Value analysis is the science of balancing the mandate to deliver high-quality clinical outcomes with the necessity to drive down costs in order to thrive in the challenging economics of health care. This study compared average length of stay, direct cost, morbidity, and mortality across the cardiology, cardiovascular, neuroscience, and orthopedic service lines, in academic medical centers with and without value analysis programs (VAPs). The basic question was, “Do academic medical centers with VAPs have lower average length of stay, better morbidity and mortality rates, and lower overall supply costs?” Methods and results: The clinical data base/resource manager (CDB/RM) of the University HealthSystem Consortium was utilized as secondary data for this study. Reports from the CDB/ RM were generated from 2006 to 2011. Continuous variable differences across VAP status were examined using Wilcoxon two-sample tests. Primary analyses used multilevel linear mixed model methods to estimate the effects of VAPs on primary outcomes (average length of stay, cost, morbidity, mortality). Association components of the linear mixed models incorporated random effects at the hospital level and robust, Huber-White, standard errors were calculated. There was no significant difference for average length of stay, direct cost, morbidity, and mortality between academic medical centers with and without VAPs. However, outcomes were not noted to be substantially worse. Conclusion: Numerous case studies reveal that aggressively active VAPs do decrease hospital cost. Also, this study did not find a negative impact on patient care. Further studies are needed to explore the benefits of value analysis and its effect on patient outcomes. Keywords: value analysis, average length of stay, morbidity, mortality, health care costs, supply chain Background Correspondence: Adrienne S Murray Supply Chain Management, University of Mississippi HealthCare, 2500 North State St, Room C782, Jackson, MS 39216, USA Tel +1 601 815 5436 Fax +1 601 815 3758 Email submit your manuscript | www.dovepress.com Dovepress http://dx.doi.org/10.2147/JHL.S30421 Powered by TCPDF (www.tcpdf.org) In the US, value analysis began in 1947 at General Electric. The founding father was Lawrence D Miles. While at General Electric, Miles was responsible for identifying, negotiating, and acquiring key materials that were scarce. In many instances, he found the situation to be in dire straits and aimed at getting product functions met by alternative means. More often than not, Miles found a way to meet product functions via substitutes that provided equal or better performance at a lower cost. Mile’s success at General Electric prompted private industry to adopt this concept. In 1954, the US Department of Defense Bureau of Ships (now the Navy Ships System Command) implemented a formal program and called it “value engineering”. By 1961, value engineering had been established throughout the US Department of Defense. Its applications have been used in many industries, including the automobile, railways, metal, electrical Journal of Healthcare Leadership 2012:4 93–105 © 2012 Murray et al, publisher and licensee Dove Medical Press Ltd. This is an Open Access article which permits unrestricted noncommercial use, provided the original work is properly cited. 93 Murray et al equipment, and service sectors. It was not until the 1990s that value analysis first appeared in health care.1 Journal of Healthcare Leadership downloaded from https://www.dovepress.com/ by 54.37.163.172 on 12-Jul-2018 For personal use only. Introduction According to Marmor et al, the health care system in the US faces many challenges, with cost and quality being key concerns. Health outcomes in the US are not exceptional when compared with other wealthy nations, yet the US spends more than any other country on medical care.2 Emanuel affirms that, compared with total US health care expenditure, there are little to no established resources or efforts to determine which technologies, products, or interventions are most effective.3 Americans spend more than $2 trillion on health care annually, and over $100 billion is spent on research and development as well as the regulatory approval of emerging technologies. However, annual spending on technology assessment falls shy of $1 billion, representing 0.05% of total US health care spending, according to Ford.4 Value-based purchasing in health care reform is fast approaching, and health care in the US will transition from payment by volume to payment for performance. This change will significantly impact how health care providers in the US will be paid. The current reimbursement system in the US is a “fee for service” model, whereby health care providers are paid based on the quantity of care provided. However, value-based purchasing will focus on the quality of care provided, as well as patient satisfaction, rather than the quantity of care that is provided. Also, supply costs are on the rise, and quality of care and patient safety have emerged as chief concerns for reimbursement. Health care accounts for more than 17% of the gross domestic product in the US, with more than $19 billion being spent on efforts to reduce medical errors.3 Singh and Schneller state that as hospital administrators look to reduce operating expenses, many are turning to supply chain. The supply chain environment, especially value analysis, is a capable field for process improvement, considering that the arena of value analysis has not been effectively explored regarding cost savings and its impact on patient outcomes.5 At many academic medical centers, value analysis has become a tactical cost reduction instrument for health care executives who utilize its principles.6 The general objective of this study was to compare patient outcomes, specifically average length of stay, direct cost, morbidity, and mortality, in academic medical centers with and without a value analysis programs (VAP). Value analysis is the balance between the business savings side of health care and patient outcomes. Value analysis is also the methodical review of the value of 94 Powered by TCPDF (www.tcpdf.org) submit your manuscript | www.dovepress.com Dovepress Dovepress goods (...truncated)