August 3

Healthcare Value Analysis: Diagnose Before You Prescribe A Solution

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There is a tendency in healthcare value analysis circles to predetermine solutions for cost and quality problems with their hospital’s products, services, and technologies that is leaving millions of dollars of savings on the table untouched. This also creates quality issues that never get resolved.

More importantly, these seat-of-the-pants solutions aren’t solving the root causes of these problems, but only putting a Band Aid on them that quickly falls off. It’s like a doctor making a snap judgment based on a patient’s symptoms without doing any diagnostic tests to confirm the real cause of their complaints.   

For instance, we see hospital value analysis team members decide that the reason their exam glove cost per patient day (CMI adjusted) is higher than their peers’ is price, without first understanding the root cause of this anomaly. So, they never shadow their customers, interview customers, or conduct a functional analysis because they think they have diagnosed this problem correctly and that they need to find a new supplier with a better price.

In most situations, the real cause as to why a hospital’s exam glove costs are out of alignment is that: (i) the hospital doesn’t have a policy and procedure on who can wear what glove, (ii) higher cost gloves are provided to all employees to use when a lower cost alternative could be substituted, and (iii) hospitals standardize on one hypoallergenic glove when it isn’t required for all employees.

The simple truth is that we, as an industry, are treating symptoms of a problem more often than the actual cause of the behavior with so-so results. To correct this behavior, diagnose before you prescribe a solution. This will enable you to root out the causes of your cost and quality issues and then stamp out all waste and inefficiencies in your supply streams. 


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Are You Sure You Want To Standardize Everything?

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Hospital Supply Chain Benchmarking


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healthcare supply chain, Healthcare Value Analysis, hospital supply chain, Hospital Value Analysis, value analysis, value analysis team


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