Value Analysis has terminology and methods that have been around for 60 years, yet most in the VA world tend not to use the terminology that is most effective for their analysis. Let’s start with the definition of Value Analysis when it was created. Value Analysis is the study of function of products, services, technologies, and processes, and the search for lower cost functionally equivalent alternatives.
Functional VA Terminology Leaves Nothing to Interpretation or Misinterpretation
There are no modern terms for Value Analysis or what many think make it different in healthcare. It should still be and will always be the study of function of products, services, and technologies. Who specifies the functions? Well, it’s our customers, users, and stakeholders who require the functionality that the products, services, and technologies deliver. There is no guess work of what something does or does not do functionally which becomes the requirements for the VA analysis.
The other day, working with a client that was analyzing a cost escalating product category, I asked the vendor what the primary function of this product was. He told me it has two primary functions. I then asked, which is more (the 80/20 rule)? He told me the 80% use of the product was what we needed to focus on, but not to ignore the other 20% altogether. Of note, the end customers and stakeholders were hanging their hats on the 20% use area as one of the most important elements when in fact it was the 80% use/outcome that needed to be reviewed.
Just that simple question delineated exactly what needed to be reviewed in the cost escalation value analysis study. Trying to chase two functions in a review can take you down too many forks when the major dollars should be on the 80% outcome/functions. Can a product meet two primary functions? Most often it cannot, but it is still a possibility. You need to focus on the primary function first, then secondary and then the features. You can also break the features down by their functionality as well to know the specific outcomes.
Taking Value Analysis Out of the Subjective World and Into Exacting Functionality is the Name of the Game
We use VA terminology because it helps to clearly define the products, services, and technologies we are analyzing, and most importantly, identify the key functionality that our customers and stakeholders need to perform their jobs/procedures with. Using terms like “quality” or “value” sound good but they can be subjective, as my quality and/or value can be different than your quality and/or value. But functions are either met reliably or they are not.
How Do We Use This?
When discussing a New Product Request, don’t just require the name or description of a product; have those end customers and stakeholders let you know specifically what functionality they need and why. As VA professionals facilitate these reviews it is very important to know exactly what the functional requirements are so that they can be measured, tested, evaluated, and sourced for that customer and/or stakeholder. In a way, it becomes your specifications which need to be met reliably. This will help you delineate whether the requested product meets the bill or whether another product you already have or have access to on a contract can also meet those functional requirements.
Don’t Overshoot or Undershoot Functional Specifications
In a perfect VA world, you would be hearing functional requirements and reliability discussion much more often in VA meetings and contract discussions with vendors. That information is imperative to getting our costs, quality, and outcomes right with little or no doubt that you got the product, service and/or technology analysis right because you stayed true to VA terminology and the functional approach. The bottom line is that this little change can go a long way and make your job easier because it simplifies the products and services that come through your department. You can ask better questions and get better results in less time with less effort. Let’s go!
Below are some similar articles that you may find interesting.
The Most Effective Benchmarks to Use in Healthcare Supply Chain
The Natural Triggers That Produce Cost and Quality Wins in Healthcare Value Analysis