1. Value Analysis in the Hospital
Laboratory
Terry McIntire MT(ASCP)
Value Analysis Coordinator
JPS Health Network

2. JPS Health Network
• 6000 employees
• Level 1 trauma center
• 537 beds
• Over 50 clinics
• > 4,500,000 laboratory tests per year

3. Value Analysis Program
• Organized and Started by Owens and Minor
in Oct 2012
o 6 Value Analysis Teams
o 1st Full Year
o $2.55 million annualized savings
• $0.46 million Laboratory
o 113 Initiatives implemented
• 14 Laboratory Initiatives

4. VAT Program Structure
4
Cardio/
Imaging
VAT
Peri- Op
VAT
Support
Services
VAT
Patient
Care
VAT
VASC
Admin
Services
VAT
SUPPLY CHAIN MANAGEMENT SUPPORT
Lab
VAT
AD-HOC SUPPORT
Bio-Med
Infection
Control
Finance
Risk
Management
Decision
Support
Facilities HR
Performance
Acceleration
RX
(P&T)
IT

5. Value Analysis Program
• Transitioned from O&M to JPS in October
2013
• 2 Value Analysis Coordinators – growing to 3
in near future
o 6 Value Analysis Teams have grown to 9
o 2nd Year to Date (year ends in September)
o $7.58 million YTD annualized savings
• $2.44 million Laboratory
o 132 Initiatives implemented YTD
• 21 Laboratory Initiatives implemented YTD

6. VAT Program Structure
6
Cardiology
Radiology
VAT
Peri-Op
VAT
Support
Services
VAT
Patient
Care
VAT
VASC
Admin
Services
VAT
VALUE ANALYSIS COORDINATORS - SUPPLY CHAIN MANAGEMENT SUPPORT
Lab
VAT
AD-HOC SUPPORT
Clinical
Engineering
Infection
Control
Finance
Risk
Management
Decision
Support
Facilities HR
Performance
Acceleration
RX
(P&T)
Service
Contracts
VAT
IT
VAT

7. Look at Reference Laboratory
Testing
• Quick savings
– Hot List – Review often.
– Have new tests been added at non discounted
prices?
– Are panels ordered when only individual test is
needed?
• ANA test vs profile is good example
– Vitamin D – There is more than one and more
than one way to measure
• 25-OHD – less expensive and ordered most frequently
• 1,25 OHD – more expensive, frequently ordered in error
• JPS saved $84,000 per year by internalizing

8. • Quick savings continued
– Is that super accurate test really needed?
• If using a bucket gives the results needed, why spend
for mass spectrometry?

9. Quest by any other name….
• Hospitals frequently have multiple accounts
all belonging to same Corporation
– Are all really needed?
– Are the charges different for the same test from
the different divisions of the Corporation?
• $75 vs $15 for same test was discovered at JPS
– $290,000 annual savings for JPS
– Could switching to a different division of the same
lab produce savings?

10. Keep Looking at Reference Labs
• Labs will almost always bid below GPO
pricing
• Better pricing may be obtained without
changing labs
• JPS saved $400,000 per year by putting out
RFP and changing labs – another $200,000
might be possible
Reference Lab RFP

11. You use how many labs???
• Do you really need 30+ reference labs?
– The major laboratories offer much of the testing
done by secondary labs
– Get help from pathology with physician
preference labs
– Prices are negotiable with secondary laboratories.
begin by asking
• JPS obtained 25% discount from Prometheus
just by asking

12. Pathology Reference Labs
• Many tests formerly done by niche labs are
now offered by bigger players at lower prices
– Consolidate to fewer labs
• Internalize testing

13. Why send it out?
• Internalize high volume assays.
– Can your molecular lab do that assay?
• PCR testing has become simpler, but is still expensive if
sent to a reference laboratory
– TB blood test – save $30/test
– Vitamin D – earlier slide

14. Why Keep It In-house
• If the test is done infrequently
– Can a reference lab meet your turn around time
need?
– Is it worth the reagent, QC material and tech time
cost?
– Negotiate reference lab price before sending first
specimen.

15. Point of Care
• Control point of care testing
– Is there a real need for this test to done if it is 3-5
times more expensive than if done in-house?
• JPS limited the number of A1c tests done POCT
• Volumes and variety of assays keep
increasing.
• More competitors in market
– JPS switched to better technology and still saved
$90,000 for CLIA waived POCT Flu kits

16. Butterflies
• Limit use of butterflies for phlebotomy
– $81,000 savings

17. Courier Service
• Switched from contract couriers to JPS
couriers
• Eliminated courier runs when testing not
affected
– If testing only done once per day for a send out to
another hospital, just send the specimens once
per day
$25,000 savings at JPS

18. Blood Bank
• Quick and Easy
– Obtain credit from local blood bank for blood
drives conducted at your hospital
– for JPS ~ $6,000 - $8,000/year

19. Blood Bank
• Waste Reduction
– Process changes
– PAR reduction
– Return soon to expire units to Blood Bank vendor
– $150,000 savings for JPS

20. Blood Bank
• Blood Utilization Reduction
– Work with Medical Staff on transfusion policies
– Set thresholds for transfusions
– Over $500,000 annual savings for JPS

21. What’s next?
• Reagent deals for high volume assays
• Consolidation of satellite labs
• Look at national market for blood products
• Keep looking at Reference Laboratories
– Just keep working

22. • Questions
• Comments
• Suggestions
When was the last time you did something for
the first time?

23. Terry McIntire MT (ASCP)
Value Analysis Coordinator
JPS Health Network
1500 S Main St
Fort Worth, TX 76104
817-702-1452
tmcintire@jpshealth.org
http://www.linkedin.com/in/tdmcintire
www.twitter.com/tdmcintire