Traditionally, value analysis hasn’t been a data-driven process (i.e., value analysis decisions are made with data, rather than intuition, experience, or guessing) at most healthcare organizations. Instead, VA has been a clearinghouse for vetting new and renewal group purchasing contracts as well as new products. Given how new payment and care models are dramatically reshaping healthcare organizations, no longer can VA be only GPO contract or new product focused. VA must now be data-driven if it is to stay relevant in this new age of doing more with less.
Group Purchasing Contracts or New Products Shouldn’t be VA’s Sole Reasons for Being
Somehow, over the last three decades, GPO contracts and VA have been intertwined since this is how hospitals, systems, and IDNs vet their GPO agreements. Nonetheless, the VALUE of value analysis is in these four new savings categories not in your GPO contracts:
- Value justifying the need for a new product, service, or technology
- Elimination of all waste and inefficiency in your value streams
- Development of specifications for a new product, service, or technology
- Removal of all utilization misalignments from your supply chain
Now that less and less savings are being generated from your GPO contracts you need to shift your savings emphasis from these contracts to data-driven savings opportunities that fit into these four savings opportunity categories. Even the GPOs are espousing supply utilization management as the next level of savings!
Separate Your GPO Contract Vetting from All Other VA Savings Opportunities
In our opinion, too much time is now spent by value analysis teams vetting new and renewal GPO contracts that have a meager return-on-investment. Therefore, to capture all value analysis expense savings opportunities going forward we recommend that you either establish a separate GPO contract team or have your value analysis coordinator/manager vet these contracts directly with their appropriate customers. This would free up valuable time for your core value analysis team to tackle the aforementioned four new value analysis savings opportunities.
Develop a Data-Driven Value Analysis Culture to Save Time
The most precious resource we have as supply chain managers is TIME. That’s just one good reason for you to develop a data-driven value analysis culture. For you see, you or your value analysis teams don’t have the time to dig out these new value analysis savings, but by ongoing data mining you can easily have hundreds of new value analysis savings projects on demand. Isn’t that what your senior management is looking for in this new era of healthcare cost management?
Develop a Data-Driven Value Analysis Culture to Save More
Let’s cut to the chase. The primary reason you would want to develop a data-driven value analysis culture is to save 7% to 15% more than you are saving now with your new and renewal GPO contracts. Without a data-driven value analysis culture, you will never identify these new value analysis savings opportunities. Don’t wait until your GPO contract well runs dry. Protect your future with a data-driven value analysis culture.