In talking to healthcare supply chain professionals about their value analysis analytics (or the extensive use of data, statistical and quantitative analysis to identify value analysis savings opportunities), I find that most of these individuals are focusing their analytic efforts on price, standardization, and duplications. This isn’t what hospital value analysis analytics is all about!
Value analysis analytics is the new science of savings: A new and better emerging best practice to identify your best value analysis savings opportunities with the highest possible ROI. Its purpose is to enable your value analysis team(s) to have enough fuel in their fire to ensure never-ending savings for your healthcare organization, and to avoid dry holes.
Why is it important to avoid dry holes? For many years, we facilitated hospital value analysis teams by providing them with what we thought were good savings opportunities by scanning their A/P runs, conducting ABC analysis of their annual purchases, and reviewing their purchasing patterns and practices. While this system worked well from a money-saving standpoint (26% saving on average), it produced about 50% dry holes and thereby frustrated our clients’ value analysis team members because of its inefficiency.
Dry holes must be avoided at all costs! What we learned from this experience is that department heads and managers don’t have the time or patience for dry holes. Their guns are ready to aim and fire when they are given a value analysis assignment. That’s why value analysis analytics is the right prescription for this ailment.
So, if you are employing your value analysis analytics just to uncover price, standardization, and duplication savings opportunities, you aren’t getting the most out of this new science of savings. It’s now time to refocus your efforts beyond just price so you can provide your value analysis team(s) with the ammunition that they need to hit their savings targets on time — every time. It’s a much more efficient way to do business!
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