Supply chain value analysis involves several elements such as leadership, tools, methods, people, and education. If you are looking to take your value analysis program to a whole new advanced level, then you need to add new elements to your program that will not only aid you but your team members, stakeholders, and customers.
4 Advanced Elements to Add to Your Value Analysis Program
1. Advanced Savings Tracking – Value analysis is about results. Even though your leadership knows that job one is to take care of your clinicians, they also expect you to save big dollars. With this expectation, you need to have an advanced savings tracking and validation system in place so that anytime your leadership needs/wants to see the savings you have brought about you can quickly quantify the savings without doubt.
Remember, your C-Suite only sees budgets going up year after year and if you were in their shoes, you would think that your VA program is not generating the savings you expect of them. Don’t assume that they know that you are saving money because you are also spending more money with new product requests. Instead, leave no doubt and set a savings and validation system in place to ensure that your leadership always knows the good results you are bringing about.
2. Before, During, and After Tracking – Adding to the savings tracking above, you want to also track after the results and outcomes that the products, services, and technologies deliver (or don’t deliver) on that value analysis implementation. If a product was supposed to save money and reduce OR procedure time by 20%, you sure as heck need to make sure you track after that. The promise was made but you need to trust but verify on these outcomes to ensure that the results stand. If you find out the results are not what was contractually promised, then you can go back and have it addressed by the vendor. If the results are even better than you imagined, then you need to report this out to all involved.
VA is very much episodic in nature which requires more follow up being added to your programs to ensure results that matter most are in fact happening.
3. Ongoing Education for Everyone Upstream and Downstream – Other than the initial start-up training of VA teams and AHVAP level training for VA Managers, most organizations stop with educating the key assets in their value analysis program. The key assets are those department heads and managers, end users of products and services, as well as your key stakeholders. Everyone needs to be on the same page singing the same song when it comes to goals and objectives of your value analysis program. It is time that you buy or borrow value analysis training programs that will align with your healthcare organization’s goals and objectives. Few do this and most lose out on major savings and quality improvements.
4. Start a Key Performance Indicator/Benchmarking Program by Category of Purchase – I know you all have KPIs and benchmarks in one form or another, but most health systems do not have category-based benchmarks to gauge where they stand, and more importantly, which way the wind is blowing. We are supposed to be data-rich, yet most organizations don’t know where they stand as a system or by their individual hospitals in all of their major and minor categories of purchase. This needs to change because this is where the next level of major savings is going to come from and will fuel your savings efforts in conjunction with what you are already doing with your GPO contracts.
Think, everything from absorbent hygiene to IV sets to pacemakers to wound care needs to be tracked, and that is about 500-750 categories to track after. If you are a multi-hospital system, then you can just multiply your reporting results times the number of hospitals you have and that you need to be tracking. Here is an interesting twist, one hospital out of a 10-hospital system got the health system off their highest level of pricing (costing them $350K) because they were buying too much of the wrong endomechanical reloads. How did they find this out? Benchmarking was the answer! You need to have this in place today.
The adage goes, you are either moving forward or you are moving backward, there is no in-between. If you are stuck in neutral with your value analysis and cost savings strategies, then we have just given you the proven next steps to implement rather quickly to take a giant leap forward in a relatively short period of time. Keep pushing for big savings, there is still so much more to gain!
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