The term “disruptive innovation,” coined more than two decades ago, describes how industries transform to provide more affordable and readily accessible products and services to their customers or clients.
Harvard Business School professor Clay Christensen is credited with developing the theory and he, along with the late Jerome Grossman, M.D., of Harvard’s Kennedy School of Government and Jason Hwang, M.D., are responsible for applying it to healthcare. Their book, The Innovator’s Prescription: A Disruptive Solution for Health Care, was published in 2008. Six years later, conversations about disruptive innovation have been revitalized by the passage of healthcare reform.
“Our customers have the need to be more innovative in balancing costs and quality, so it has forced them to look at nontraditional ways of hitting those objectives,” says Doug Jones, assistant vice president, service line sales for SourceTrust.
Traditional methods of reducing costs have often been through sourcing to obtain the best price by negotiating national or custom agreements. At some point, however, the best price will be in place with little or no room for further negotiation.
“If pricing has already been addressed but you still need to make changes, the question is what to do next,” Jones says. “How do you save even more without compromising patient care and clinical outcomes?”
Implementing nontraditional solutions is where disruptive innovation comes into play. HealthTrust is helping organizations seek out inventive solutions designed to manage costs and improve patient outcomes. Such solutions can be defined as disruptive because of their uniqueness in the healthcare setting. In other words, these new practices interrupt the way operations have typically run.
While the term “disruptive” may have negative connotations, Jones says the results of the innovations positively impact the overall operation of a facility. Understanding the impact of clinical data on total cost management is essential. Yet this idea is disruptive in the historical contracting world, as device pricing has been identified as the key cost driver and analytics have been focused on purchasing patterns.
HealthTrust has several new programs in place to help members reduce costs without negatively affecting patient care. Jones shares details on four of these programs:
1. inSight Ortho. The first thing SourceTrust has done is bring some transparency into a hospital when it comes to data. A spend and utilization software tool called inSight Ortho allows hospitals to look at their average purchase price versus what they’re charged, as well as enables them to monitor waste and actual use in almost real time.
This is unprecedented transparency that most clients have never had before. The tool will allow hospitals to work with their physicians to manage their orthopedic costs much more effectively. It also permits them to have conversations about utilization, what items cost and what’s really being used
2. Clinical Data Solutions (CDS). Another SourceTrust tool for looking at data is called CDS, which provides unparalleled data analytics in the orthopedic, spine and cardiovascular arenas. This software allows members and clients insight into clinical data, giving them the opportunity to reach key clinical performance goals in each of those therapeutic categories.
A hospital can measure its utilization rates against regional, national and local benchmarks in areas such as length of stay and complication rates. Along with securing clinical benchmarking, HealthTrust offers toolkits and consultations to help solve problems revealed by the data.
Data like this helps you hit that marriage between cost and quality well, Jones says. Physicians love this kind of data, and SourceTrust engages physicians to tackle the problem in a truly collaborative manner.
3. Aligned Service Model. A new service SourceTrust provides—the Aligned Service Model (ASM) program—was initiated in direct response to a real customer’s needs. The program can provide facilities with a new approach to cardiac rhythm management (CRM) service, giving a hospital a competitive advantage, improving wait times and satisfaction, and potentially mitigating some risk.
In an effort to improve patient care and efficiencies, the ASM involves training hospital personnel to perform device activities to supplement 30 to 50 percent of the service typically provided by supplier representatives. This includes device on/offs for surgical procedures, interrogations, ER checks and pre-discharge evaluations.
Having hospital staff trained to perform these services has led to improved wait times and efficiencies, which can impact patient and physician satisfaction scores.
4. Strategic Implant Management (SIM). SIM follows the same philosophy as the Aligned Service Model. It involves carefully examining a procedure to determine where costs can be reduced. In the area of spine procedures, where SourceTrust has piloted the program, it’s likely that some of the more basic procedures won’t require a manufacturing representative, which will save money.
“Rep-less” doesn’t mean service-less as SIM requires a more consultative approach. SourceTrust is trying to deliver the best solution for the procedure, and this has to be done with a doctor’s full support. The need is still being met, but it may be met through a hospital employee versus a supplier representative.
The search for disruptive innovations isn’t likely to go away.
“Our customers are clamoring for creative solutions,” Jones says. “It’s now part of what we do. We have to continue to find ways to balance the cost versus quality equation.
“Sourcing is still the core of what HealthTrust does and that’s not going to change, but our approach is to look beyond price alone,” he continues. “We will learn what clients need and design products to address those needs. In fact, the Aligned Service Model and SIM are direct results of clearly defined client needs.Share Email