Value Analysis in the Wound Clinic: A Firsthand Account

In this exclusive interview, Today’s Wound Clinic discusses the value analysis team process with Lance Ellis, territory manager at Tissue Regenix, San Antonio, TX.

Today’s Wound Clinic (TWC): Some hospitals require product companies to go through a vendor verification process prior to a product being reviewed by a value analysis team (VAT). Can you share a relatable experience?

Lance Ellis (LE): “We were recently subject to a vendor verification process, which is basically the ‘process before the process’ that requires the product company to secure a ‘sponsor’ (ie, hospital employee) who’s willing to support your company through the vendor approval process. Note that this part of the process isn’t for the product itself, but, rather, the company. So the hospital is asking for details such as insurance coverage (of all kinds), company information, names of any physicians whom the company is involved with, etc.” 

TWC: In cases where product companies may have experienced difficulty in securing a sponsor (say, if the company representative and the prospective sponsor can’t agree on a meeting time convenient to both parties to discuss the potential sponsorship), can you try to explain how you and your company have met this challenge?

LE: “In one particular case, we met with a ‘skin substitute committee’ — which is basically another term for the value analysis team, value analysis committee, wound care council, etc. — in an attempt to obtain an evaluation approval for the product. This is usually the avenue companies must go through to get their products approved. The committee typically includes the company sponsor, anyone who has participated in the product trial, a clinical resource director, materials/purchasing staff, etc. Note that this part of the process is not related to the group purchasing organization (GPO). Now, that being said, there are some hospital systems that are members of a GPO and will not do business with a company, unless they are on their respective GPO. Ideally, the company will be on a GPO before going to a hospital committee for approval, but that is not always possible, especially for new companies with cutting-edge technology.”

TWC: Which parties need to be involved to execute a legal contract for evaluation, and do the manufacturers pay money for this?

LE: “This is typically a contract to setup legal protections for both companies for conducting a product evaluation that comes at no cost to the manufacturers. The relationship is normally between the company and the legal department with the hospital, and sometimes the hospital’s supply chain. For instance, the contract may contain items related to how much product is estimated to be used, where it will be permitted to be used (eg, wound care clinic, operating room, on the floor), who is responsible for the inventory, and/or if it’s a paid evaluation versus a free product evaluation. Some hospital systems do not want donated products because they can lose out on revenue while conducting an evaluation. They want to pay for the product so they can charge for it. Other hospitals do not want to pay for products in an evaluation, even if it means less revenue. All of these instances will be spelled out in the contract.”

TWC: When it comes to agreeing on evaluation guidelines such as how long the trial will be, how many patients will be included, what defines a “success,” and how the documentation occurs — who must be in agreement? The doctors? The skin committee? The nurses? Who pays for this, and how are the data recorded? 

LE: “You have to get these types of answers up front so that everyone is on the same page. Ideally, it’s a combination of the skin subcommittee, the nurses, and the doctors in the field who decide the clinical aspects of the evaluation in conjunction with the manufacturer rep. We supply an evaluation document with objectives and success measures to the evaluation personnel to help spell out what a ‘success’ is for the evaluation. That being said, it’s generally at the local level, meaning that each unit or hospital may do it their own way, but everyone is on the same page because they have the same rep working with them and should be using the same parameters. Generally speaking, we keep a log when we place one of my products somewhere, along with wound measurements, percentage of closure, the date in which we will place another piece, additional measurements, and any special circumstances. 

For instance, I once had a patient in the middle of an evaluation be admitted to the hospital from the wound care center for COPD. The wound care physician followed up with the patient in the hospital for two weeks and, by the time the patient was discharged from the hospital and returned to the wound clinic, he was healed with only one application of the product. It was important to know the special circumstances of that patient and be able to tell that story to the approval committee to show how the product is unique.”  

TWC: When do you need an institutional review board (IRB)? What happens to the data? What is the role of the product representative in regards to the facility?

LE: “An IRB-approved clinical trial is very different from a new product evaluation. An IRB has no relevance to a facility when evaluating a product to decide if they want to utilize it. Regarding the data captured in the product evaluation, the results are analyzed at the conclusion of the evaluation to determine if the facility sees value in utilizing the product. The expectations of the representative should be determined prior to the start of the evaluation. Typically, it is expected that product in-servicing occurs with all staff members involved. Additionally, it may be expected that the representative follows up weekly to provide clinical insight about the product as the patient progresses. Hospitals typically just want to see that the product is approved by the U.S. Food & Drug Administration and has documented clinical evidence proving efficacy and safety. 

If you can show that your product is safe, performs better than (or just as good as) a competitor, and is financially equal or better than a competitor’s, you will have a shot at being approved. The data are collected and stored at the local level to be retrieved when resubmitting evaluation results to the VAT after the evaluation is complete. The role of the rep in this is to help give guidance on the application of the product and to answer any clinical questions they may have.”

TWC: When approval has been granted, what is it that you are actually approved for? What is a Lawson Number?

LE: “Once approval has been granted, there can be other procedures that happen behind the scenes, so it is important to stay in touch with your sponsor, as he or she will be communicating with internal hospital personnel during this phase. If the committee approves the product, they will communicate to relative parties that the VAT would like to start the process of internally adding the product to the hospital’s formulary. This is where you basically play the ‘waiting game’ as a vendor because most of the approval movements are happening behind the scenes at the corporate level with very little interaction with the rep. Every hospital has different operating procedures. In this particular hospital, we were approved and it went ‘up the chain.’ I was then contacted by the hospital’s purchasing department, the supply chain department, and the vendor management department announcing we had been approved and they would begin the process of adding our product inside of their system. Additionally, a purchasing contract with the hospital may be signed, which is basically a contract that again agrees on purchasing conditions (consignment or direct), where the product will be shipped, where the product will be stocked, invoice parameters, and other general business conditions.

Lawson Numbers are specific numbers within a hospital system that are assigned to each product approved at the facility. It’s an internal number with the hospital or the system (not the GPO) that allows the hospital to track inventory, billing, approvals, etc. If you have a Lawson Number in a particular system, you are officially approved and the product can be ordered for use on a patient.”

TWC: What are the procedures to place approved products into electronic health records (EHRs)?

LE: “In my experience, each facility is different and several different departments may control adding a product to the EHR. This is something to explore prior to the evaluation in order to better understand what happens at the conclusion of a ‘successful’ evaluation.”