April 18

5 Reasons You Aren’t Working on the Right Value Analysis Projects


Healthcare costs are rising every year in the United States, and are 29% higher than any other country in the world according the Modern Healthcare Magazine. This is unsustainable, unmanageable, and could be unaffordable in a few years. That’s why value analysis is so important to your healthcare organization in holding down your supply chain costs. But value analysis can only perform its magic if your VA teams are working on the right value analysis projects. Here are five reasons why your value analysis teams might not be as productive as they should be:

1. You are overwhelmed by the volume of new products in the queue. We have documented as much as 35% in new product purchases for a three-hospital system in just one quarter. This same scenario just might be happening at your hospital, system, or IDN. If so, you need to perform a study to see who, what, and why so many new products are being ordered. If these new requests are legitimate, then maybe you should dedicate one VA team specifically for new product equations. This will reduce your queue to a minimum.

2. You haven’t defined and then prioritized what is urgent vs. what is just important. Too often, department heads and managers will state that they have an urgent request (e.g., Joint Commission requirement) that must jump over all other requests. However, the term “urgent” means a state or situation requiring immediate action. Whereas, “important” refers to having great significance or value to your healthcare organization. Don’t confuse the two!

3. Your prioritization criteria don’t align with your healthcare organization’s survival strategy. If your new product, service, and technology requests aren’t saving or improving your hospital, system, or IDN’s bottom line at least by 5%, don’t put them on your value analysis agenda. This is because the cost of change is 5% or more. In fact, all your value analysis projects should be prioritized by the dollars (highest to lowest) based on the savings or quality improvements they are proposing to bring about. Yes, you can quantify quality savings.

4. You don’t have your senior management’s buy-in. Specifically, the value analysis projects (e.g., pacemakers, stents, ortho, etc.) that have the greatest return-on-investment for your healthcare organization that don’t have your senior management’s buy-in or backing to pursue. Since things change and people change, keep note of these VA projects for now but plan on returning to these in the near future.

5. You’re failing to enforce your own rules. We see value analysis teams breaking their own VA rules on having vendor presentations at their meetings, unbudgeted items being reviewed prior to budget approval, and department heads not completing request forms but requesting evaluations anyway. These and other rule infringements lead your VA teams to work on the wrong things, at the wrong time, and in the wrong sequence. 

As this list suggests, value analysis teams need to be working on the right things if they are to be successful. VA teams need to avoid things that distract, sidetrack, or divert them from their goal of saving money and improving the quality of the products, services, and technologies that enter, traverse, and then leave their healthcare organization’s supply streams year in and year out.


costs, healthcare, healthcare organization, hospital, savings, value analysis

You may also like

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Subscribe to our newsletter now!