“There are more ways to use healthcare value analysis than just vetting new products, reducing waste, and addressing utilization overspends.”
When most people think of value analysis in the healthcare world, their mind immediately goes to products and services. However, there are more ways to use value analysis than just vetting new products, reducing waste, and addressing utilization overspends.
Value Analysis is Functional Analysis
When Larry Miles created value analysis/value engineering back in the mid 1940s at General Electric, he was an engineer who applied his talents to solve the biggest problem that GE was having at that time. The problem was the availability of materials and quality parts to build all the innovative products that GE was making after World War II. At this time, the world was still rebuilding itself and was not able to tap into the vast resources that we now know today. The resources and materials that were available were quite expensive, and the biproduct of the availability issue was extremely high costs.
Larry, as a value engineer, decided to focus on function first which then equates to best value. If a product did not meet the exact functional requirements, it would not be considered, which saved a lot of time and eliminated a good amount of work by keeping the analysis to function only. This is the anchor for value analysis, and we still use it today using this functional approach on products.
Below are some other areas that you can use this valuable functional approach we use in healthcare value analysis beyond the norm to gain incredible results.
1. Process Behind the Products and Services – Products and services all have functions that need to be accomplished to gain an outcome. What VA often leaves out when performing a VA review is that we fail to analyze the process behind the products and services. Often, we find that there may not be an issue with a product but the process with how the product is used in the clinical departments. If you use the functional approach to better align the products and processes, you will further weed out inefficiencies and waste. You will be giving clinicians back valuable time in their days while also improving patient outcomes and reducing/maintaining cost levels.
2. Problem Solving – I cannot tell you how many times we see healthcare organizations attempting to solve problems by throwing money at them as a quick patch and hoping that the money spent will solve the problem. Often times, adding new products or additional steps to a process may not work because we have not uncovered the root cause of the problem. Meaning, what function is not being met along the process route that is causing the issue? When you focus on functions throughout a process of nursing, sterilization, dietary, surgical, etc., you will understand what is working and what is not functioning properly.
3. Upgrading Processes – For years, we employed a brilliant management engineer that used to run our productivity program back in the day which uncovered all the good and all the problem areas of a hospital’s productivity. I was always amazed by his work because it did not matter whether it was respiratory, ED, MRI, lab, OR, etc. – he always found out where the issues were with productivity, and basically did the same thing every time to solve the issues. He found out early on that productivity issues occur due to poor scheduling in departments and thus he used a functional approach (VA folks!) to break down the functions of the departments along with the timing of when these things needed to happen. He then upgraded their staff scheduling to meet the functional requirements and timing of the procedures in the department.
No Matter What You Are Analyzing You Cannot Lose with the Value Analysis Functional Approach
We are just scratching the surface with the capabilities of what you can do with value analysis in our healthcare world. I highly recommend you take a step back and plan out other areas where you can apply more of the value analysis functional approach to your own VA program, but also where you can apply it beyond just the normal day-to-day that you are used to. There is more value to attain with this next-level thinking and performing healthcare value analysis.
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