Everyone has a degree of experience in cost management, personal and business-wise, which we bring to the table in our value analysis meetings. There is also common sense that can guide us as well, but these experiences and common sense can only get us so far in the savings game. We need to have solid mindsets, knowledge-based tools, and some clever methods in order to find the next level of major savings led by value analysis. Below are the top four elements that will help you save big with your health system’s value analysis program.
How to Save Big with Your Value Analysis Program
1. You Gotta Believe – One of the key success attributes to value analysis managers engaging in multiple VA studies on an ongoing basis is their mindset. As Zig Ziglar (the famous motivational speaker) used to say, “Stinking thinking closes off opportunities.” That is what we see with VA managers as they are in the savings game but are not really confident that they will actually find any savings. Plus, they get worried about upsetting the clinicians or senior management in some way shape or form, but this is your job and there are ways to ensure that the savings are real (stay tuned for the next bullets).
Lastly, I have been in the savings game in healthcare value analysis and supply chain for 31 years and I can say unequivocally that not only are the savings real, but the savings are bigger than you would ever imagine, and they are very much still there. Clinical Supply Utilization and VA Retrospective Analysis will lead the next major savings push.
2. Develop Your Go-To Tools Then Use Them – Value analysis teams are comprised of department heads and managers. Value analysis managers have to first prove that savings are real on any given initiative before they will even allow us to work with their departments to drive out the savings. Thus, we need to find or develop tools that have advanced attributes beyond simple price and spend management but things like Key Performance Indicators, Benchmarks, Utilization, Demand Management, etc. Then and only then can you go into a VA meeting and not only gain buy in from the key stakeholders for your savings opportunity, but you will have goals of how much you want to save and probably have a good idea what products and departments are causing the overruns. You need advanced tools to save big!
3. Don’t Stop at the First Bit of Savings You Find – This happens all too often when a value analysis project lead is assigned a value analysis review to find big savings and they quickly find the savings or sometimes come close to the goal of the review. More than likely, they did not go through all the VA steps. A key stakeholder or expert may have just pointed them to the root cause, and they ran with it. It is great they met or came close to the goal but if it happened that quickly, I urge you to ask them to do a complete review of this assigned area using all the steps of your value analysis process. Why? Because more than likely there are still more savings there and without a complete VA review you may be leaving valuable and easily found money on the table.
4. Cut Off Every Angle – Everyone is for saving money and improving quality until you want to perform cost management or quality improvement in their departments. I cannot tell you how many times I sit in on a value analysis meeting where the VA manager is presenting a nice juicy savings and the clinical manager stonewalls them and tells them that they cannot possibly consider the recommendation. Lip service is a major detracting factor in value analysis initiatives not even getting a chance to work through the savings because the department head will give excuses as to why the savings are not real. This is where your tools come in and you take away every angle (excuse) that they give on why the savings are not real. If they say we were really busy and that is why utilization is too high, then you should have a volume centric benchmarking or utilization tool to prove that you are already factoring that in. Take out every angle until there are no more angles than to just do a full value analysis review.
It’s Time to Hone Your Value Analysis Skills
Saving money using value analysis methods and best practices is an art form that has many success elements that you need to not only learn but master to bring the highest value to your organization’s bottom line and quality performance. Remember, every dollar you save is 20 times that in revenue your health system would have to generate to only have a dollar in profit. If you save $100K it is like adding $2 million in new revenue to your health system. Savings is major right now, so it’s time to hone your skills even more!
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