Many would venture to say that clinical supply utilization management (CSUM) is part of value analysis (VA) and vice versa, but that is not the case. Both are necessary in today’s healthcare supply chain world, but both are totally different modalities that do different things. Yet, when combined they will make your supply chain savings beyond price efforts bear fruit for years to come. We are talking an additional 5% to 12% savings beyond price on total non-salary budget.
Difference Between Value Analysis & Clinical Supply Utilization
In the healthcare world, value analysis is a functional process for finding lower cost alternatives, evaluating products, services, and technologies, solving problems, as well as the ever-popular use, contract conversions. These may be in the form of new product request evaluations, product recalls, resilience issues, product failures, or aligning your old contract into a new contract with a conversion. Most importantly, value analysis does not have any tracking systems or reporting tied to it other than the new product request workflow which is more administrative than any analysis tool so that does not count. Value analysis in essence is a methodology and a process used by supply chain, nurses, or anyone who runs a value analysis program.
Value Analysis Needs Clinical Supply Utilization Management
Clinical supply utilization management is a reporting process that utilizes patient volume centric metrics to track the utilization and consumption of products and services of a health system. Think, Balloon Catheter Cost Per Cath Lab Case, IV Set Cost Per Patient Day, Blood Cost Per Patient Day, etc. There are over 750 major supply categories and 350 major purchased services that you can track the utilization of in many ways. Think, year over year, system level, and against cohort best practice that will tell you exactly where you stand on every category. No more guessing or speculating. You, your value analysis teams, and those respective category stakeholders will know.
Clinical Supply Utilization Management and Value Analysis Combined are an Unstoppable Combination
The CSUM results will uncover areas of increased use of products and services that will require action, some sooner and some later, but you can be strategic about how and when you act. It will also show you areas that you were supposed to have reduced costs in and then it will confirm that this did in fact happen.
Now that you have this CSUM report telling you all the areas in your supply chain that have major increases in costs per operating metric, what do you do with this information? You are going to need some sort of process or system to drive out these savings opportunities which is where value analysis comes in. VA is the problem-solving/solution-finding methodology to which increased cost of utilization is the problem. Then you can sic your VA professionals and/or VA teams on the category that is having the issue.
Why Can’t VA Do This Alone?
As mentioned before, VA does not have any reporting engine that tracks costs other than spend reports which are not volume centric and thus get talked away altogether by the departmental stakeholders. Implementing CSUM can provide a report/list of savings opportunities that supply chain and value analysis can strategically select and bring to the value analysis teams. Keep repeating this process as there are always new and different savings opportunities in your hundreds of categories of purchase. This is an unstoppable method because by using the patient volume centric cost per category methodology, department heads and managers cannot just say, “We were busy,” or, “That was a one off.” You will have proof that the savings opportunities are real.
The Bottom Line
You are a supply chain or value analysis leader who wants next-level big savings opportunities to work on, and more importantly, deliver the savings that are projected. The perfect way to do this is to employ a CSUM reporting system and merge it into your value analysis program. Then sit back and look like a strategic genius because you are going to know things that you never realized were happening with the products, services, and technologies in your healthcare organization. There will be major savings areas to work on, plus you will know where you are doing well or even best in cohort level so that you won’t spin your wheels trying to get more savings when they are not there. Can you wring the towel dry on savings now? No! But you can start wringing the towel dry with a CSUM system combined with VA.
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