January 3

Hospital Value Analysis by the Numbers

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Hospital value analysis professionals should know that all new product, service, and technology evaluations should start with a performance analysis of the current commodity’s in-use cost, quality issues, and outcome that is going to be considered for replacement.

Why? It has been our experience that 20% of what you are buying now has defects (i.e., cost, quality, or safety) that haven’t been detected or corrected. Therefore, if you are going to replace this commodity with another, you could be compounding your cost, quality, or safety problems 10-fold.

Hospital Value Analysis: Performance Analysis

Our clients frequently discover this fact through a performance analysis of their current commodity group’s in-use cost only to find that it is beyond acceptable limits, failing to meet customer expectations, or is actually dangerous to their staff or patients.

A good example of how this can happen is when one of our clients analyzed the in-use cost, quality, and safety of their current wound care products. They found that there were inefficiencies in their patient devices and questions on the efficacy of their skin care products. They also found a value mismatch in their absorbent pads and a lack of consistent process in bed making. Once these defects were corrected, this hospital’s ulcer rate was reduced by 10 percent; while at the same time they reduced their wound care and related supply spend by $262,000.

Can you see that if this client had just substituted another lower cost product in this analysis, the life cycle cost, quality, or safety of their total wound care products could have been increased 10-fold? Not to mention the quality issues that would surface once they peeled the onion back to its core.

Reduce Hospital Supply Chain Cost While Improving Quality

In the new healthcare environment we live and work in, all hospital supply chain professionals are looking to reduce their supply chain cost and improve quality and safety for their patients. What better way to do so than to analyze how your current products, services, and technologies are performing now.

As we said, the jumping off point for a performance analysis is when you are considering a new product, service, or technology. To ignore this immutable law is to jeopardize the integrity of the products, services, or technologies you are now buying.

Think about it. Why would you want to increase your in-use cost or denigrate your hospital’s quality and safety by adding new products, services, or technologies just because a commodity can save you a few dollars more, but in the long run cost you more?


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Request Demo of SVAH’s Value Analysis and Utilization Tools


Tags

healthcare supply chain, Healthcare Value Analysis, hospital supply chain, hospital supply expense, Hospital Value Analysis, performance analysis, supply chain, value analysis


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