23% to 46% of All Contract and VA Savings Fall Through the Cracks and Most Organizations Don’t Know This Is Happening
SavingsValidator™ is a major breakthrough in how we validate savings that you put on your savings reports. With most CFOs now scrutinizing and reducing budgets accordingly with these manual line item spreadsheet savings, it is imperative that all dollars documented now be audited for certainty. Yet, supply chain does not have the time nor the staff to continuously audit savings once a year, let alone on a continuing basis. But, it is necessary for these audits to happen in order to capture variances to the line item savings reports, otherwise the savings just disappear without any action taken. Enter, SavingsValidator™ that utilizes a unique volume-centric system to capture the actual results and goals associated with any and all savings. Plus, you can view more than high level results to find out what is actually happening when a savings does or does not meet your goals and objectives.
Why Do We Need An Automated Savings Tool?
Watch the Video Below to Find Out
Discover – Implement – Sustain
Patient Volume-Centric – Compliance Friendly – Quick & Easy Reporting
No Major Work After Set-Up of Tracking
One of the biggest challenges that supply chain and value analysis professionals face is tracking the results after the pricing, standardization, and/or value analysis change has been implemented. Yes, we can work up spreadsheets for all of these things, and yes, we know that the new price is in place because we can see it in our Materials Management/Purchasing Systems. But are we saving the dollars or percent of dollars that we should be saving after the change with certainty? In most cases, there is no easy path to finding this out, until today!
- Put your sustainability on autopilot
- Uncover opportunities automatically
- Protect your organization’s bottom line
- No more major data mining or drawn out analysis
- View across multiple initiatives with exacting results
Now the wait is over, as we have finally cracked the code to provide patient volume-centric reporting to show the total cost of product standardization, value analysis, and contract changes in one simple reporting module. No more drawn out spreadsheets or data mining, no more reinventing the wheel, and no more guessing whether we brought about the results we worked so hard to achieve.
Sometimes It's Hard to Ignore What an Automated System Can Do for Your Supply Chain Organization
Savings Duties Automated
These Time Consuming and Sometimes Impossible Areas Are Now Automated:
- Manually Updating Savings Spreadsheets
- Auditing Savings for Finance
- Finding the Next Biggest Savings
- Proving Savings are Real to Doubting Departments
- Red Flagging All Changes to Supply Utilization
- Showing Positive Gains that You Were Unaware Of
- Verifying Contract ROIs
- Tracking the Cost of All New Products After Approval
- Alerting You to Savings that Did Not Materialize
- Verifying Vendor Guarantees
8 Reasons for Savings Validation
Here are eight reasons why supply chain expense savings validations are an emerging best practice at profit and non-profit hospitals, systems, and IDNs nationwide:
- ONLY A PROJECTION: The savings reports you are generating for your senior management are only a projection or best “guestimate,” not a number that you want your CFO to budget or share with his management team – until they are validated!
- DATA IS INACCURATE: SVAH research shows that only 64% of the supply chain expense savings reported to senior management are correct. This is because the savings are frequently overstated or understated.
- TRUST BUT VERIFY: How often do you think your vendors meet their promises or guarantees? Not often enough, by our measurement! You could be losing 10%, 15%, 25% or more on any given contract if you aren’t validating your savings.
- GPO SAVINGS SUSPECT: SVAH’s studies show that GPO savings projections can be off by as much as 33%, since GPOs are not careful to eliminate outliers, correct unit of measure issues, or understand how a product is employed.
- CURB YOUR LOSSES: By validating all of your contract and value analysis savings before, during, and after implementation, you can self-correct any variance from your original projections.
- SAVINGS UNDERSTATED: We have seen supply chain expense savings understated by as much as 23% because things change during the term of the contracts. This disparity can create credibility issues!
- SAVINGS OVERSTATED: More often than not, your supply chain expense savings projections are overstated by 5%, 10%, or 15%. Again, because things change during the term of your contracts.
- BUDGET DISTORTIONS: If your CFO is budgeting based on your supply chain projections, he or she will be surprised when the reported savings do not appear on their general ledger.
A large University Hospital booked a $820K savings opportunity in their savings tracking system only to find out through SupplyValidator that the savings never happened due to unforeseen changes from the original project. This one project represented 7% of their total annual savings achieved but it was not really there. SupplyValidator™ alerted them to the need to revisit the project and they achieved the savings the following year and sustained it over the long term.
The Ultimate Automated Supply Savings Tool
Automatically Validate Your Savings Initiatives
Hospitals cannot spare the staff or resources nor do they have systems to quickly validate every savings opportunity that has been projected - until now!
New Level in Supply Performance Contracting
With Value-Based Purchasing holding hospitals' feet to the fire with fixed costs, hospitals must now look to performance-based contracting to hold their own vendors' savings estimates and projections to task.
Hold Your Vendors Accountable for Guaranteed Results
Just about every vendor contract has savings projections tied to it but there is no mechanism to accurately track whether or not the savings are achieved.
Finally Know What Your True Total Costs of Changes Are
Most savings are based on the previous year's spend projections but any changes could cause unintended consequences that you must now know about and react to if they do not go as planned.
Uncover All of Your Hidden Positive Gains
Not only can you find where your shortfalls are but you can also find out where your savings exceeds your initial savings projections.
Track Results Through the Entire Life of a Contract
With less reimbursement and tighter budgets, hospitals must rely even further on the accuracy of the contract life cycle savings projections in order to compete in the short and long term.
260-Bed Hospital Recovers $50K in Lost Savings On Just One Contract
One hospital signed a new three-year exam glove contract with a projected $30K savings per year or $90K over the life cycle of the contract, but after the first year only saw $12K in savings and was made aware of this by SupplyValidator™ and made appropriate adjustments. This hospital then saved a total of $74K in the remaining two years of the contract. The net result was $86K versus $36K if the original savings was left untouched! A $50K improvement.
Frequently Asked Questions
What’s the main purpose of SupplyValidator™?
To hold your vendors accountable for the savings on contracts and product implementations that are promised, or in many cases, guaranteed. The system will show you exactly where you are meeting or exceeding your savings goals as well as where you are falling behind and can take further corrective action. Remember, it is hard enough finding and effectively implementing major and minor savings opportunities at hospitals, let alone following up on the hundreds of implementations every year.
Why can't we do this ourselves?
There are more issues than just making sure that a price is in place on your purchasing supply chain system. With every product, standardization, and/or contract change there are unintended consequences that can cause waste and inefficient use of the products implemented. These are the root cause of most increases beyond price that hurt your organization's bottom line. For your staff to chew up precious time on data mining and re-data mining every month/quarter to confirm you are meeting or not meeting your goals on hundreds of products, services, and technologies would be a daunting task.
What else can SupplyValidator™ do for us?
The system will not only tell you where your opportunities arise but can also show you your total return on investment of any non-salary initiative. Most healthcare organizations have multiple non-salary initiatives going at any given time (i.e., contracting, value analysis, standardization, PPI, purchased services, etc.). SupplyValidator™ is able to consolidate all of the results on an ongoing basis to report the favorable or unfavorable results in just a few clicks of your mouse.
For a no cost no obligation review of this powerful savings tool, please fill out the demonstration request below: