July 1

Strategic Value Analysis™: The Process Connection


With few exceptions, healthcare organizations are the most complex enterprises on the face of the earth. They are composed of interconnected and interdependent parts making up the whole. In the modern business vernacular, we call these parts processes. Processes are a systematic series of methods and practices directed to some end. In our healthcare environment, the end is “wellness” of the patients we are treating, but how many of these processes (admissions to discharge) are really of value in our customers’ eyes? The best measure we have found for determining value is the value equation shown in figure 1 (function/cost = value). It has been our clients’ experience, utilizing THE VALUE EQUATION as their “best value test,” that any and all processes can be reduced by 30% to 40% in complexity. 10% of what is being done can be eliminated entirely, because it has been found to have NO VALUE.


Function Cost Value


One of our clients that had been utilizing our “process” value analysis methodology found that they could shave off 10 minutes on their mammograms by: (i) having their patients fill out the required documentation themselves, (ii) not having their patients wait to see if they required a retake, since only one in three hundred patients required retakes and (iii) adding more change lockers for patients to quickly disrobe and dress. This enabled our client to perform eight more mammograms a day which increased their revenue seven-fold.


Louis J. DeRose said it best when he said, “Value means satisfying customer requirements reliably and consistently. It means satisfying them cost-effectively.” It is therefore our job as value practitioners to root out all waste and inefficiency in our processes’ value chains if we want to truly serve our internal and external customers reliably, consistently, and cost-effectively.


TRADITION Is Our Biggest Enemy In Our Search For Value


TRADITION (or “we have always done it that way”) plays a crucial role in why we do what we do and is the #1 factor that is holding back needed process changes. Tradition, in the classic sense, means handing down from generation to generation beliefs, customs, doctrines, methods, and practices that worked for a long time. The drawback is, they might not be of value today.


healthcare, healthcare organization, Strategic Value Analysis, value analysis

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