AHRMM is offering a repository for leading and proven supply chain practices, case studies, and toolkits that are developed from a Cost, Quality, and Outcomes (CQO) perspective. The following Catheter Acquired Urinary Tract Infections (CAUTI) leading practice was submitted by:
Nexera, Inc., New York, NY
Problem Statement: Evidence-based practice and clinical trials identify alternate products that can potentially reduce CAUTI. By virtue of their associated increased cost, these products may negatively impact supply budgets with minimal incremental return if they fail to deliver lower CAUTI rates.
Method: Supply costs need to be calculated into practice prevention bundles to optimize quality and outcomes, and reduce organizational cost for CAUTI. The inherent risk is that if these alternate products do not positively impact quality and outcomes, they could serve to waste scarce resources that could be better used elsewhere. In an effort to offset this risk, we propose structuring supply contracts to contain terms which hold suppliers accountable to product claims they tout.
Means (resources required/used to obtain results/achieve the end):
For the successful development of a supplier agreement, the following methodology was followed and data obtained:
- Pre-agreement prevalence rates of CAUTI, supply costs for products currently in use, current incremental costs to treat CAUTI per incident.
- Development of supplier agreement, proposed supply costs with integration into prevention bundles and best practice.
- Analysis of cost, prevalence rates, and surveillance of CAUTI incidence after product integration.
The supplier in question cited case studies wherein their silver coated urinary catheter reduced CAUTI rates by 25 percent when compared to use of non-silver coated catheters in identical patient settings. In order to offset the anticipated 30 percent increase in urinary catheter cost, an agreement was designed to guarantee financial remuneration in the form of product rebates should the CAUTI rates fail to decrease from the historic baseline by 25 percent.
Date Implemented: Various
Outcomes: During the first quarter measurement period, the incidence of CAUTI was reduced by 20 percent. Supply costs increased by 30 percent. Incremental costs to treat CAUTI decreased by 20 percent. Although CAUTI rates dropped, it was less than the guaranteed target reduction outlined in the contract agreement. Therefore, the financial remedies in the agreement were invoked and 50 percent of the incremental product costs were rebated back to the hospital by the supplier. During the second quarter measurement period, the incidence of CAUTI was reduced by 28 percent. Supply costs were increased by 30 percent. Incremental costs to treat CAUTI decreased by 28 percent. As these reductions exceeded the targeted reductions per the agreement, it was not necessary to invoke the financial remedies in this situation.
Tools: Historical costs and prevalence rates of CAUTI, targeted reductions of prevalence rates of CAUTI, actual rates and costs incurred by quarter after implementation of supplier agreement.
How Does Your Example Address the Issue from a CQO Perspective?
This example addressed the issue of CAUTI reduction from a CQO perspective as it demonstrates the alignment of all three elements in the contracting process:
Cost: While supply cost increased, this resulted in an overall reduction in the total cost of care.
Quality: Product selection guided by the premise of decreasing patient complication rates.
Outcomes: Changes in product usage improved clinical care provided, while simultaneously positively impacting reimbursement.