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Getting More Value Out of Value Analysis


Shawn O’Connell, RN, and Jac Higgins


There is an unfortunate, yet pervasive, misconception among many hospital managers that nursing and materials management have opposing purposes.  Nursing presumes that materials managers are focused on product fill rates at the expense of clinical care.  Materials managers on the other hand, are sure that nurses want “one of everything, all the time”.


At some hospitals, the mistrust between these departments often leads to hoarding by nursing and diminished patient focus by materials management.  To promote a team effort that provides the highest level of care along the entire clinical pathway, while remaining cognizant of profitability, many hospitals have formed value analysis committees (VACs).  These committees generally comprise representatives from nursing and materials management who review, product-by product, the items used in patient care.  Unfortunately however, VACs tend to be headed by more often by materials managers than by nurse managers, and the perpetuated mistrust between the disciplines can become a hurdle to any real progress.


In the spring of 1995, the then director of materials management at the University of Chicago Hospitals (U of C), an RN, saw the need for meaningful cooperation clinical providers, and purchasing and materials handlers.  She strengthened the hospital’s existing VAC by adding clinical representation from more areas along the clinical pathway.  She also prevailed upon committee members who reported to her to be more responsive to the business questions raised by the clinicians.


Recognizing that in the eyes or clinicians, the credibility of materials management was lacking, this director replaced the existing materials management leadership with managers who were more focused on nursing’s needs.  Able to see the hospital through the eyes of a nurse, yet also from the vantage point of a senior-level administrator, she insisted that materials managers no longer attempt to “practice medicine”, that is, suggest practices and the products associated with those practices, to nurses.  Rather, she asked that materials managers remain focused on providing nurse managers the business and financial information they need to make the best-practice clinical decisions.


The program raised the bar of credibility within materials management to such a point that clinicians began to recognize the real contribution of materials managers to quality patient care.  Still, not all clinicians were sold on the concept.  Some hospital administrators chose to run their own materials management and purchasing programs that were singly responsible to their corner of the hospital world.  Although key alliances had been formed, value analysis was still considered a materials management program, not a clinical program.


Typically, the creation of a VAC is directed by senior hospital management in the hope that a team approach to patient care will keep materials managers responsive to the product needs of the nursing staff.  But the creation of a committee, in and of itself, even with representation from both sides, could do little to reduce preexisting mistrust.  Hospital leadership recognized that real teamwork could begin when nursing managers and materials managers could acknowledge that each has role to play in patient care.  Progress would come, the leadership believed, when nurse managers could recognize that materials managers do more than just “move boxes”, and when materials managers, in turn, could acknowledge that nurse managers really do understand the front-line role they play in reducing hospital costs.


With this in mind, the U of C value analysis leadership made two decisions in 1996.  First, the committee chair was turned over to nursing; and second, it was agreed that the committee’s product decisions would be based 60% on clinical considerations and 40% on business concerns.


The effect of the first change was a marked increase in the expectation that the VAC would make sound clinical decisions when choosing products.  Nursing set the agenda and decided which medical products would be reviewed.  The materials management staff responded to nursing’s lead by gathering the relevant purchasing and usage data required for sound decision making.


The second change created a clear understanding among committee members of the role each played in the purchasing process, and confirmed for materials managers the hospital’s core business – providing quality health care.  A simple agreement was reached: Nurses would provide clinical knowledge and leadership, and materials managers would furnish sound business information and practices.


The success of this new business process has served as a catalyst for more areas of the hospital to join the VAC.  The committee membership grew to include:


·        Administrative services

·        Adult and pediatric emergency departments

·        Anesthesiology

·        Blood bank

·        Budget/operations

·        Cardiac care

·        Clinical engineering

·        Coagulation lab

·        Critical care nursing

·        Environmental services

·        General stores

·        Laboratory services


Such broad representation helps to ensure that all product decisions that might effect multiple departments are made with input from all parties.  Nurse managers understand that VAC decisions will be enforced, and department representatives know that they must make a clinical case for or against a product.  Under nursing’s lead, value analysis has taken on a new significance – real value.


Shawn and I served as co-chairs of the U of C Hospitals Value Analysis Committee from 1996 through 1998

Originally published in Nursing Spectrum Magazine, 8 September 1998.

Copyright 1998,  2006 — Nursing Spectrum. All rights reserved.  Used by permission.

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