There is a new trend in value analysis that you may have already noticed: value analysis teams are evolving from fragmented committee structures into highly organized, technically oriented, and evidence seeking teams. As such, these same teams are looking for a new level of detailed reporting that highlights supply utilization misalignments in their hospital’s supply streams.
Spend Reports Won’t Cut the Mustard Any Longer
Traditionally, value analysis teams have relied on their MMIS or Spend Manager’s reports to highlight unfavorable spend patterns and trends in their supply utilization. We too thought this was a good idea 20 years ago. Unfortunately, we have discovered, these same spend reports give false positives 93% of the time. It’s like a blind archer trying to hit a target dead center from 300 feet away – it is never going to happen.
Value Analysis Team Members Don’t Have Time for Dry Holes
It is also important to remember that your hospital’s clinicians, who sit on value analysis teams, don’t have the time for dry holes. Meaning, if your spend report shows an increase in a commodity purchase over time it is probably wrong 93% of the time. You don’t want your clinicians running these down for potential savings, if your spend reports are only accurate 7% of the time.
A Need to Go Deeper for Evidence
Obtaining effective, efficient, and reliable supply utilization evidence-based data that your value analysis teams can use requires your supply chain staff or value analysis analytics provider to go deeper and broader than ever before to uncover your supply utilization misalignments. This is because your current spend data is misleading, ambiguous, and unreliable for determining your best supply utilization candidates for your value analysis teams to investigate.
Your Big Data Needs to Be Evidence-Based Data
Data, in and of itself, isn’t evidence that your hospital has supply utilization misalignments in your supply streams. On the other hand, activity-based costing data can give your value analysis teams the evidence they need to convince your customers and stakeholders that a change is needed. For instance, if a commodity group you are buying has been activity-based costed and adjusted for census variances, this is the ideal measurement to determine, through benchmarks and historical standards, if your utilization on this commodity group is within acceptable limits.
VA Is At a New Maturity Level At Most Hospitals
All things considered, value analysis teams are established and very mature at most hospitals, but do they have the utilization reporting that they require to move to the next level of savings performance? Our research indicates that most value analysis teams aren’t at this level yet. However, all it takes is a small investment in utilization management software to get your value analysis team or teams the power tool they need to get better than just good at utilization management.