Almost every hospital (big or small) in the United States has some form of value analysis committee or team that is performing evaluations on new product requests and/or new or revised GPO contracts. However, most hospitals don’t have these three missing success elements for their value analysis projects which could streamline their VA process:
1. Setting measurable objectives and listing your customers’ requirements is the first step in your value analysis process.
Say a new glove is requested by your director of pharmacy for his chemotherapy preparation with the measurable objective of “promote comfort.” The list of customer requirements could be: sterile glove, tactile sensitivity, latex, and powder free.
The reason for this protocol is to ensure that your project manager understands what this VA project is all about vs. guessing what his/her objective should be or what the customer is looking for in their new product, service, or technology.
This procedure is also important for a VA project manager to follow if there is a change in a new or renewed product, service, or technology contract.
2. Forming a value analysis project team of customers, stakeholders, and experts.
Too often, a VA project manager will attempt to evaluate a new project by themselves with little or no input from customers, stakeholders, and experts. This is a fatal mistake! A VA project manager’s job is to facilitate the evaluation of a new purchase or GPO contract, not to be the final arbitrator on whether a hospital should buy or contract something. Only your customers, stakeholders, and experts can make this decision.
3. Establishing time, savings, and cost budgets.
Another mistake when starting a hospital value analysis project is to underestimate the time it will take from start to finish, the saving opportunities available, and the cost in time, money, and peoplepower that is needed to achieve the savings results. By establishing a budget to estimate these factors up front, you would be surprised at how many VA projects will be rejected out of hand or take on more realistic expectations.
For instance, we recommend to our clients that they don’t perform a VA project if a commodity under investigation has an annual spend under $25,000. The reason for this is, with few exceptions, there is very little savings than can be achieved by doing so when you consider the cost of change, but you can chew up a lot of labor expense in the process.
These three success elements can change the way your value analysis project managers approach all of their new VA projects for the better. For you see, once they understand what they need to accomplish and why, the faster and easier it becomes to get their job done.