Sourcing & Value Analysis: Importance of Enrichment in Data Strategy
Today’s post is part three in our series on the importance of data enrichment for large hospitals and hospital systems. In part one, Nic Sagez, Curvo’s Chief Technology Officer, addressed data enrichment from the perspective of the hospital CIO. In part two, Stan Mendenhall, editor of Orthopedic Network News, addressed the enrichment needs of service line leaders.
Today, we turn our focus to leaders in supply chain, sourcing, and value analysis roles. Here to help us is Steve Suhrheinrich, Co-Founder and Chief Customer Officer at Curvo. We asked Steve several questions about the importance of data enrichment for supply chain/sourcing/value analysis.
Steve Suhrheinrich brings leadership experience and operations expertise from multiple disciplines to his current role at Curvo. After success as a Naval Officer, hedge fund VP, and enterprise sales leader, Steve co-founded Curvo with Andy Perry in 2012. He leads Curvo’s customer success strategy and works hand in hand with supply chain leaders across the country.
Here’s what Steve has to say to supply chain, sourcing, and value analysis teams about the importance of data enrichment in healthcare.
Why do data enrichments matter for large hospital systems?
Here’s the thing: in large hospital systems, supply chain rises or falls on enterprise data analytics. But no matter what kinds of systems a hospital has in place, its enterprise analytics are only as good as the underlying data. If a hospital doesn’t have clean data, it doesn’t have an effective enterprise data strategy.
Data enrichments are about more than just amplifying the data (that is, adding in information and making the data more useful). It’s also about cleaning up the data: removing duplicates, resolving conflicting data fields, and so forth.
Good data enrichment provides a new level of power in analysis. Supply chain leaders can use the enrichment to track purchase history over time, compare their purchase trends to clinical benchmarks, analyze pricing by parts from various manufacturers, and do better cross-reference comparisons. Data enrichments also allow teams to visualize in a way they couldn’t before. And, the better your visuals, the less you have to say to get your point across.
How do large hospital systems enrich data today, without Curvo?
Some hospital systems will undergo manufacturer level analyses. This can work if the manufacturer is focused on one or two segments, but can get complicated when the manufacturer’s products span many clinical service lines. I’ve seen hospitals attempt to assign UNSPC and GUDID codes to the line items. This is an effective method, but is a massively time-consuming and, ultimately, expensive endeavor. Hospitals cannot go deep into procedure-level construct analysis with either of these methods without systematic algorithms and deep clinical expertise.
Another weakness is that hospitals using other methods tend to do one-time static analysis related to a large sourcing project, which doesn’t equip service line leaders for ongoing surgeon-level practice pattern conversations. This means the process has to be repeated each time a sourcing project is initiated, which is often a difficult early hurdle to overcome.
How do those methods affect quality of analysis and business as a whole?
My friend Stan Mendenhall often says, “The more you know, the less you pay.” I agree, and the inverse is also true: generally, the less you know, the more you pay. When supply chain, sourcing, and value analysis teams are short on knowledge, the organization tends to overpay. But, by arming teams with the insights that come from rich, clean data, they gain significant leverage in negotiations.
There are also cost savings opportunities beyond the cost of the product. For example, I’ve seen hospitals effectively use our bone cement enrichment to address practice pattern differences across surgeons by highlighting the number of bags used per procedure per surgeon and antibiotic versus non-antibiotic preferences. Presenting this kind of visibility to surgeons and working with them to understand these practice pattern differences dramatically reduced costs in this area without changing price at all.
What problems do hospitals encounter when they use a data set with less powerful data enrichments?
Really, it’s the same set of problems that hospitals encounter when they don’t use any data enrichment – just slightly softened. Broad, category-based data enrichment like what can be obtained from UNSPSC isn’t unhelpful. Knowing that an item is a knee or hip is better than nothing. But when you can’t get down to the construct, part, and product-line level, there are missing details – important details teams would use if they had access.
In other words, it’s not so much the problems they encounter. It’s the questions that they don’t know to ask from a world of actionable information that they miss out on. It’s the lack of clarity that results from not having a good depth of information. And everyone in supply chain knows that if they go to their surgeons with bad information, they’re setting themselves up for failure. Or, they don’t attempt the conversation with the surgeon at all. Yet, this happens all the time.
How do our current data enrichment customers talk about the value of Curvo’s service?
One of the significant advantages Curvo customers tell us about is the classification methodologies. It allows supply chain teams to compare a deeper level of data, including clinical utilization, sizes, frequency of use, and more.
In a way, it’s the kind of service that hospitals don’t fully realize they need. But once they have it, it transforms how they do business so significantly that they can’t imagine working without it. Curvo customers regularly tell us that without these data enrichments, they can’t have quality conversations – they can’t really do their business or negotiate without it.
One customer explained that, without Curvo, they couldn’t give their surgeons the kind of data that the surgeons needed to effectively understand costs and utilization metrics. Curvo’s data enrichment empowered them to close this gap.
Curvo’s data as a service additionally helps supply chain professionals look credible to clinicians. No more guesswork and weak data that clinicians can poke holes in. The clinical spend management software provides rich, detailed data that provides credibility.
Can you give an illustration of how hospitals can turn data enrichments into useful visualizations?
Below you’ll see a few examples of how hospitals have accomplished this. One hospital wanted to take a closer look at the average quantity of bone cement used per surgeon per cemented knee procedure, separating out the antibiotic bone cement from the non-antibiotic. This is a fairly specific analysis, and it’s something that would be challenging to uncover manually. But with Curvo’s data enrichments, it looks like this:
They were also able to create visuals showing the average bone cement spend per case by surgeon, with antibiotic and non-antibiotic procedures indicated.
This information was in the hospital’s purchase history records, but it was challenging for the hospital to collect and identify the material differences. Curvo provided data enrichment and visualizations, which pulled the information out of the mess of data and made it much easier to act upon.
What are some specific use cases that supply chain, sourcing, and value analysis would have for these data enrichments? If I’m new to the role, what do I do with this information?
There are countless use cases, and I’ll describe two of them.
First, practice pattern analysis. Curvo’s data enrichments allow supply chain, sourcing, and value analysis teams to compare construct utilization in numerous ways:
- By surgeon
- By manufacturer
- Whether, for example, bone cement with or without antibiotics was used
By comparing this information with both costs and outcomes, supply chain can make informed recommendations to service line leaders and others.
Second, component cost comparison. Orthopedic Network News and other resources can provide national trends over time, such as the average selling price for total hip constructs by construct type (see sample graph below). With one’s own hospital system’s enriched data in hand, it’s simple to identify variances from national trends. These variances then often develop into cost savings opportunities.
What are the reasons that the supply chain-clinician relationship tends to be a bit adversarial?
While it’s true that there can often be tension in this relationship, I wouldn’t call it adversarial.
But the hard truth is this: in many cases, the hard work of building relationships, learning about costs and quality, and providing the right incentives hasn’t been done.
Clinicians have their own immediate goals to understand, most importantly related to patient outcomes. And this should never be at odds with supply chain goals. The real mission is to get to a place where supply chain and clinicians view themselves as members of the same team, with the same purpose – delivering the best quality and cost outcomes to the patient.
To get there requires relationship-building, education, and the right alignment between administration and clinicians.
Curvo’s Data Enrichment Services Can Empower Your Supply Chain, Sourcing, and Value Analysis Teams
If your hospital or health system isn’t yet enriching data or is doing it with inadequate tools, there’s a lot at stake. Utilizing Curvo’s “data as a service” can transform your enterprise analytics into powerful, actionable information you can use to understand costs and execute savings initiatives. If you haven’t yet seen what Curvo’s data enrichment services can do to transform your enterprise data strategy, let’s talk.