VALUE. DELIVERED.
E-VALUE-ating Products Across Environmental and Socio-Economic Factors
by Karen Conway I
n April 2023, I wrote a column entitled “What Delivers the Value in Value Analysis,” which recapped a webinar1 on how sourcing professionals are start- ing to evaluate more than just cost and effi cacy, including broader socio-economic factors, such as: • How well a vendor manages and shares information on upstream risks to sup- ply continuity
• The overall environmental impact of a product across its lifecycle
• Whether purchasing a specific prod- uct supports businesses in disadvan- taged communities
• Assurances that a product is not made with forced labor
Liz Eisenberg, RN, who leads clinical value analysis for Scripps Health, participated in the webinar and noted how the factors to consider will vary by both the product category and the larger strategic objec- tives of an organization. For example, for some organizations choosing products that reduce greenhouse gas emissions may be more important, while for others procuring products from local, diverse suppliers may top the list. She envisioned a rubric where different criteria could be given differential weighting depending on the product cat- egory and/or strategic priorities. A clinical procurement nurse in the U.K. was thinking along the same lines when she developed a tool to compare the environ- mental and social value of products. Clare Nash, who works with Sandwell and West Birmingham NHS Trust and The Dudley Group NHS Foundation Trust, developed the tool in response to new regulations in the U.K. that require decisions on all ten- ders to give 10 percent weighting to how a contract will deliver social value, as well as increasing requirements for suppliers to the National Health Service (NHS) to reduce the greenhouse gas (GHG) emissions associated with their operations and product lifecycles. The social value considerations must include ways to mitigate climate change, as well as other benefi ts that can include increas- ing employment and reducing health and economic disparities in local communities.
Clare’s decision support tool is featured in a recent article in the peer-reviewed journal Nursing Times.2
The GHG emissions associated with the total lifecycle for products used in healthcare operations are signifi cant contributors to climate change. Clinical and supply chain professionals can play an important role in sourcing products with a lower carbon footprint, if they have the data and tools to support those decisions. Nash’s tool is simple to use, incorporating a stoplight approach. Procurement profes- sionals can evaluate different products by assigning red, yellow, and green measure- ments across six categories (energy, water, waste, transport emissions, whole life costs, and social value). For example, a product that requires more energy or water use would score red, while one with similar or lower resource usage would be rated as yel- low or green respectively. The colors red, yellow, and green are correlated to the scores of 0, 1, or 2, respectively, allowing the prod- ucts being compared to each be given a total numerical score. When no data is available, the score for a particular factor is zero. You can view a PDF of Nash’s decision support tool at
https://hpnonline.com/53071593. While Nash’s tool only considers envi-
ronmental and some social factors, the approach taken could be extended to some of the other factors outlined above. Taking Eisenberg’s idea into account, the factors
FACTOR Environment 0 points
Higher carbon footprint
Health Equity Supply
Continuity Total
Lifecycle Impacts
Forced Labor
Product not made or sold by diverse supplier
Vendor
doesn’t share data on
supply risk Product
Product is disposable
Unknown if
product made with forced labor
48 October 2023 • HEALTHCARE PURCHASING NEWS •
hpnonline.com reusable;
sterilized off site
1 point
Similar carbon footprint
Product made or sold by diverse supplier
could be changed, along with the weight- ing (or multiplier), to refl ect what is most relevant for a particular product category and/or an organization’s strategic objectives. An abridged and highly simplifi ed version of such a tool is depicted below. Using this chart, an organization can decide to put a higher multiplier on envi- ronmental factors when evaluating anes- thesia gases, given the wide range in the GHG emissions across product choices. Organizations that have signed the White House Climate Pledge3
might also rank
environmental factors higher in order to lower their carbon footprints. On the other hand, an organization committed to sup- porting local, disadvantaged communities might rank health equity factors higher for products that can be sourced locally. To make this concept work, value analysis and sourcing professionals need to be aware of their organization’s strategic objectives, while working with internal subject mat- ter experts and suppliers to gather the data needed to make informed calculations. It’s true, in many cases we do not yet have the information needed, but envisioning a tool such as this could be the fi rst step toward creating even closer alignment among vari- ous stakeholders, both internally and across the supply chain, to benefi t patients and the planet. HPN
References online at
https://hpnonline.com/53071627 Initial Scoring 2 points
Lower carbon footprint
Product made or sold by
local diverse supplier
Vendor shares data on
supply risk
Product is reusable;
sterilized on site
Assurance
product not made with forced labor
Product A Product B
Weighting/ Multiplier
Weighted Scoring Product A Product B
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