“Information is power and the power of savings validation should be part of your savings and value analysis program in order to make your job easier plus be more accurate in the tracking of anything and everything that you have previously worked on.”
Savings tracking has been going on for years, but is more than likely being tracked on the ever-reliable spreadsheet for you and your hospital/health system. This was okay for many years, but we now need to move forward. How can we take this mundane report and make it something newer, better, and more advanced? Here are a few important keys that you need to know that will aid you in developing your Savings Validation program.
Reasons to Implement Savings Validation
1. We Must Move Beyond the One-Time Snapshot – As a VP of Supply Chain once said to me, “We rely on this savings report to help us manage our costs better and it is important that it is accurate for our sustainability.” I do not disagree with this statement, but the savings report he was referring to was just a snapshot of time when the savings were implemented and the price, standardization, or value analysis initiative was put in place. Guess what? The savings report only showed the projected savings and not the actual validated savings over a period of time. There is much more to savings tracking than that!
2. There is Nothing Proactive or Reactive About a Simple Savings Report – When it comes to savings, there is one certainty you can count on and that is change. Things change, people change, patient volumes change, policies change, and not to mention your end customers and stakeholders go back to their old ways. No matter what the change is, this could quickly negate most of your gains if you are not tracking after them. The best way to avoid these changes is to implement a savings validation program that will automatically tell you about these changes instead of not knowing and getting called out later down the road.
3. Current Savings Reports Don’t Incorporate Patient Volumes Into the Equation – Savings reports are based off of a previous year’s spend and then projected forward with the changes based on those 12 months to give the savings projection. This is then typed into the savings report and then for all intent and purpose that is the end of the reporting. But the next 6, 12, or even 24 months of patient volumes and spend are more than likely going to be different than the previous and you need a system that can account for this. Savings validation incorporates all aspects of your initiatives and can tell you at any given time what exactly you are or are not saving.
4. There is Nothing Automated About a Spreadsheet Report – Spreadsheets are great little tools but when it comes to savings tracking, they are as manual a process as you can get. Plus, nothing in the savings report correlates or connects to the line items to tell you exactly where you stand on any given savings initiative at any point in time. All savings initiatives have different start and end dates so you cannot truly use an annualized spending report or statistics to measure these. What you need is a savings validation system to marry your supply line item spend to your savings you are tracking while incorporating patient volume centric metrics to give you these vital savings results.
Savings Validation Reporting is More Accurate
Information is power and the power of savings validation should be part of your savings and value analysis program in order to make your job easier plus be more accurate in the tracking of anything and everything that you have previously worked on. This will not leave any big or small dollars on the table that your organization needs for ongoing cost, quality, and outcomes to happen. The bottom line is that savings reporting using a savings validation system is not a one-time event but an ongoing, auditable, data-based reporting system that continually tells you where you stand with regards to the savings you have put in place.
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