Assessing Risk within the Healthcare Supply Chain Managing the Unexpected
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1 Assessing Risk within the Healthcare Supply Chain Managing the Unexpected Dr. Christopher Fernandes, Physician Advisor and Brenda Lambert, Director, Clinical Services Introduction High reliability organizations (HROs) are defined as organizations that have proportionately fewer accidents than their peers, despite operating under similar or more trying conditions. A key tenet of performing as an HRO is the ability to anticipate risk. To facilitate risk anticipation, Medbuy has developed an assessment tool that allows users to determine the clinical risk of products within a sourcing initiative, thus allowing for the adoption of corresponding mitigation strategies: the Medbuy Clinical Product Risk Rating Tool ( Risk Rating Tool ). As a national group purchasing organization (GPO) charged with facilitating the sourcing of quality products for our Members, risk is a central concern for Medbuy. We use the Risk Rating Tool - a three-step process - at the outset of all RFPs where clinical products are involved, to rate the risk associated with each product in the RFP. Based on the risk level determined by the tool, a specific course of action for sourcing is followed that reflects the clinical sensitivity of the item. The tool provides risk assessment to recognize severity of failure, ability to detect failure, and probability of occurrence. Initiatives with low risk can be driven by a simple single source contracting strategy. Initiatives with higher risk e.g., a cardiac device require sourcing strategy modification to reduce risk where possible. Discussion How does a risk rating tool foster a learning organization? Healthcare group purchasing organizations perform in an environment that is rapidly changing. There are constant innovations in products and processes in healthcare that require new focus and new approaches to reduce risk while adapting to innovation. This tool allows for the first step, by recognizing various levels of risk. By recognizing a risk level, we can decide if the appropriate strategy to mitigate risk is avoidance, acceptance, transference, or control. Avoidance Some risks are not worth taking in the first place. If the risk is a result of activities outside the core business, and the level of risk is relatively high, then one should consider whether to cease or avoid those activities. If the activities are part of core business, then we look for other ways to do business that will avoid or minimize risk, loss, or patient harm. Acceptance If the risk is low enough, then we accept it as a cost of business. Transference Risk can be transferred to a third party e.g., through insurance policies. Control Controls are procedures used to prevent a risk or detect it after it has occurred. Controls can mitigate risk if this is part of an organization s core activities. Controls include force functions, standardization, checklists, and policies. Creating a Clinical Risk Rating Tool for the Healthcare Supply Chain The concept of adopting HRO principles informed the development of the Medbuy Clinical Product Risk Rating Tool, in particular, the principles of anticipation and containment. One of the tenets of risk anticipation within high reliability science is a preoccupation with failure, of which Medbuy s Risk Rating Tool utilizes several components: Severity of Failure (Critical Outcome): What would happen in a worst case scenario if this product fails? Likelihood of Detection of Failure: Is failure of this product easily detected or not easily detected? Probability of Occurrence Is there a High, Moderate, Low or No Clinical Risk of failure occurring? Among the principles of containment within high reliability science is the notion of deference to expertise i.e., placing the person with the most related knowledge and expertise in the decision-making position. This principle was exemplified by Medbuy s senior leadership, who empowered the Clinical Services team to create the Risk Rating Tool. High performance organizations reflect high situational awareness, which the Clinical Services Team has engendered by introducing the Risk Rating Tool. A key component of developing situational awareness is to mitigate risk with the appropriate team/employees looking for the threats. The Risk Rating Tool is a systematic approach in performing this function. Clinical Risk Rating Decision Tree The Medbuy Clinical Product Risk Rating Tool utilizes the components of: A: Severity of Product Failure (Critical Outcome) B: Likelihood of Detection of Failure (Easily Detected or Not Easily Detected) C: Probability of Occurrence (High, Moderate, Low, or No Clinical Risk) to assign a Clinical Risk Rating to a product or product category. The Risk Rating scale is from 1-5, with 1 representing the highest clinical risk. 1 - Represents high clinical risk 2 - Represents major clinical risk 3 - Represents moderate clinical risk 4 - Represents low clinical risk 5 - Represents no clinical risk References Weick K, Sutcliffe, K. Managing the Unexpected: Resilient performance in an age of uncertainty San Francisco, CA: Jossey Bass. International Civil Aviation Organization Reason J. Managing the risks of organizational accidents Burlington, Vt. Ashgate Publishing Company. Results Since introducing the Risk Rating Tool in autumn of 2013, we have implemented it across our entire organization and now use it to determine the sourcing strategy for each initiative based on potential risk to hospitals and their patients. These have included 195 RFPs and 85 contracts for 28 Members. Our inter-rater reliability, using Cohen s kappa, is 1. This is based on two nurses or pharmacists independently evaluating a product or initiative. The Risk Rating Tool is not only for Medbuy use, but for our Member facilities as well. The tool s rating scale can be used to drive strategy and reduce or modify risk throughout a hospital, which can have a significant impact on patient safety. Conclusion The healthcare supply chain has not been featured prominently in public conversations about healthcare quality and safety; however, it is an aspect of healthcare that must not be overlooked. As healthcare organizations seek to balance the need for clinical products and services that provide value while also meeting steep quality targets, there has never been a greater need for new solutions to strategically source products in a manner that achieves value while addressing clinical sensitivity and risk. There is no other risk rating system like the Medbuy Clinical Product Risk Rating Tool in current use within the healthcare supply chain. We share the tool as a best practice to pre-screen products for clinical risk. By contributing a solution for the healthcare supply chain, Medbuy s Clinical Services team has operationalized the way risk is addressed within the sourcing process, which will ultimately benefit patients and healthcare providers.
2 Assessing Risk within the Healthcare Supply Chain Managing the Unexpected Christopher Fernandes Professor of Emergency Medicine, Western University Physician Advisor, Medbuy Brenda Lambert Director, Clinical Services, Medbuy
3 Objectives Apply the principles of a high reliability organization to the healthcare supply chain Describe the components of a clinical risk rating tool to evaluate products Describe how risk assessment can be leveraged to reduce error
4 How do you assess risk? Clinical Risk Assessment utilizes the components of: Severity of Failure (Critical Outcome) Likelihood of Detection of Failure (Easily Detected or Not Easily Detected) Probability of Occurrence (High, Moderate, Low or No Clinical Risk)
5 Medbuy Clinical Product Risk Rating Tool
6 Results 195 RFPs, 85 contracts, for 28 Members Inter-rater reliability Cohen s kappa is 1
7 Summary Healthcare needs a high reliability approach reflected in high situational awareness The first step is to know the threats which a clinical risk rating tool identifies for us Now, we can look for the threats and communicate the threats through better risk mitigation
8 Contact Information Christopher Fernandes Professor of Emergency Medicine, Western University Physician Advisor, Medbuy Brenda Lambert Director, Clinical Services, Medbuy
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