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 leading practice describes methods used to reduce Hospital Acquired Pressure Ulcers (HAPU), and was submitted by:
Nexera, Inc., New York, NY
Problem Statement: The population of patients who acquire pressure ulcers (PU) is diverse and healing is a costly continuum. No single modality is applicable from prevention to treatment to health, contributing to direct and indirect costs associated with PU. Evidence-based practices have been identified with multicomponent strategies that reduce the incidence of PU, reflecting clinical effectiveness of care. Although progress has been made in PU reduction, emphasis needs to incorporate best strategies to include seamless allocation of pressure redistribution devices and optimum supply chain management that will decrease the prevalence of PU while reducing organizational cost and improving clinical and financial outcomes.
Method: Multiple products and numerous suppliers are available in today’s market, but may not be singularly effective in improving clinical outcomes. In conjunction with best clinical practice, supply product contracts need to be structured to contain terms which hold suppliers accountable to product claims they tout.
Means: In preparation for the successful development of a CQO tool, the following methodology was applied:
- Assessment of historical costs to treat PU with identification of current prevalence, product costs, and clinical processes.
- Integration of multicomponent strategies to reduce PU prevalence, including contractual supply agreements specifying cost effectiveness of products to standard care.
- Tracking and continual process improvement of instituted supply chain modifications and agreements.
For example, a supplier cited case studies documenting that their redistribution supplies resulted in 80 percent reduction in PU when compared to use of standard products. In order to offset the anticipated increase in per diem supply costs, an agreement was structured which provided financial remedies (in the form of product rebates) if the prevalence rate did not decrease from the baseline by 80 percent.
Date Implemented: Various
Outcomes: During the first quarter, the incidence of PU was reduced by 76 percent. Supply costs increased by approximately 76 percent of total case spend. Incremental costs to treat PU decreased by 76 percent. Total costs were reduced by 0.7 percent. Although reductions in prevalence were achieved, they were below target reductions per agreement. Therefore, the financial remedies in the agreement were invoked and 50 percent of incremental product costs were rebated back to by the supplier.
During the second quarter, supply costs were increased by 81 percent but PU was reduced by 83 percent with incremental costs decreasing by 83 percent. Total costs were reduced by 9 percent. As these reductions exceeded the targeted reductions per the agreement, the financial remedies of the agreement were not invoked.
Tools: Historical costs and prevalence rates of PU, targeted reductions of prevalence rates, actual prevalence rates and costs incurred by quarter.
This example demonstrates the alignment of all three elements in the contracting process:
Cost: While supply cost initially increased, long term result yielded a reduction in the total cost of care and maximum reimbursement.
Quality: Product selection was guided by evidence-based strategies.
Outcomes: Optimization of product selection integrated with clinical care, while simultaneously positively impacting reimbursement.