If you are honest with yourself, you know that your price and standardization savings are disappearing. Yet, your healthcare organization still needs to save millions of dollars annually just to keep pace with inflation (2.95% in August) and the reduced, curtailed or cuts in your reimbursement from third parties.
With this said, I’m sure you realize that your hospital, system, or IDN is looking to their value analysis practitioners for even more savings to help them survive these challenging times. Unfortunately, these new value analysis savings won’t be achieved with price and standardization alone. New sources of savings must be discovered to bridge the revenue gap that your healthcare organization has experienced over the last few years.
To this end, it’s been our observation that most healthcare organizations are throwing darts at elusive and moving savings targets to find their best value analysis candidates, and with meager results. This is because most healthcare organizations aren’t employing a scientific approach to identifying their best value analysis savings targets – beyond price.
That’s where Value Analysis Analytics™ come into play. It’s the art and science of measuring trends, patterns, anomalies and variations in your supply chain to quickly and precisely identify savings opportunities. Thomas H. Davenport, the author of Competing on Analytics describes (value analysis) analytics as “the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decision and actions.”
For instance, we identified through Value Analysis Analytics™ that one of our client’s transcription service utilization was $1.64 higher than their peers or $211,888 in annualized savings. Further, when our client investigated this anomaly in their supply spend they not only discovered that they were spending too much on their fragmented and decentralized transcription services, but they also decided after a thorough analysis, to outsource all their transcription functions for an additional savings of $66,999. This was a grand total of $278,887 savings annually on just this one cost center.
It wasn’t an accident that we uncovered this big transcription savings and 96 other utilization misalignments for this same client. It was because we employed Value Analysis Analytics™ to do the difficult work for us that would never have been uncovered by the naked eye, gut feel or just simple spend totals.
So, if you are looking to dramatically up your value analysis game, you need to employ the art and science of value analysis Analytics™ as an integral part of you value analysis process. Trust us, when we tell you that It will open up a whole new world of savings — beyond price and standardization.
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