Just the other day I was interacting on a LinkedIn post with Barbara Strain who is a highly esteemed Value Analysis Leader (AHVAP Past President) as well as a Bellwether League (Supply Chain Hall of Fame) inductee and Chairperson of their board. We were interacting on a post about the specific use of Value Analysis when Barbara reminded me and everyone reading that there is much more to Healthcare Value Analysis. I completely agreed with Barbara and pointed out that we are just scratching the surface of what Value Analysis can do for our healthcare industry. This article today is to help you learn the potential of what is possible for you and your Value Analysis Program in 2025 and beyond.
These upside potential areas are in no order of importance as they are all of high value.
Value Analysis Functional Approach Can Be Used on More Things Than Just Medical Devices – VA in many ways gets pigeonholed into just being about new product requests, product conversions, resilience equivalents, and recalls. This is not the case at all. Just because it is only being used for a particular duty in your health system does not limit its potential for other uses in other areas. For instance, the VA functional approach can be used for services, capital equipment, as well as construction projects (many engineering companies use VA) to name a few. There is still the entire cost optimization aspect of VA as well – stay tuned for more on this.
VA Can Be Used as a Clinical Problem-Solving Process – Many organizations have issues with problems such as urinary tract infections, C. diff, or CLABSI and form committees to try to solve these issues. Too often, these committees have no working process model which means they just have a simple brainstorming session between members to try to find silver bullet ideas to drive down the infection rates. Many times, these teams end up throwing multiple product solutions at the issues to stem the infection rates. That’s not a process – that is just guesswork which wastes time and money, plus may not even solve your infection rate issues.
Using the VA functional approach, you can work through the Value Analysis Process. We use six steps: 1) Understanding, 2) Investigative, 3) Speculation, 4) Analytical, 5) Planning, and 6) Execution. By using a processed approach, you can first isolate the root cause of infection rates instead of guesswork. By looking at the Value Analysis functional step-by-step view of clinicians’ workflows, then and only then can the root cause be identified and solutions developed with or without product additions.
Cost Optimization Beyond Price and Contracting – Too often, cost optimization is driven by the contracting and conversion workflow at health systems. You should continue this but there is more beyond pricing/contracting.
- Benchmarking for Savings Opportunities – VA professionals should focus on benchmarking at multiple levels — such as the product category level — to identify areas with potential for cost savings. It’s difficult to optimize expenses without understanding how your organization compares within your own health system as well as to regional and state peers. Benchmarking provides the insight needed to do this, but success requires careful planning and the development of a structured program that fits your organization. Once benchmarking identifies opportunities, you can then conduct a retrospective value analysis review to achieve measurable savings.
- Retrospective VA Reviews – In the past, VA regularly conducted reviews of major spending categories whenever costs exceeded expected levels. However, this practice has declined in recent years. Reestablishing and strengthening retrospective value analysis reviews would yield significant savings, but it’s essential that these reviews be integrated into a structured, formal process.
- Clinical Supply Utilization Management – Knowledge is power and there is no better power than patient volume centric clinical supply utilization tracking to continually monitor your supply utilization. Remember, you may have the best pricing, contract terms, and rebates but if you choose a feature-rich product, are using a product inefficiently, or wasting it overall then your costs are still going to be too high. With CSUM, you can keep your finger on the pulse of your utilization and consumption which will allow you to optimize and self-correct versus making wholesale changes that could disrupt more than you save.
While there are many directions in which you can expand your Value Analysis Program, I wanted to focus on the areas that will have the greatest impact on your health system — particularly on bottom-line costs. Remember, Value Analysis is more than just a phrase; it’s a proven, structured methodology comparable to Six Sigma and Lean Management, with a history just as long, if not longer. When seeking the next level of improvement in cost, quality, and outcomes, look no further than the potential of your Value Analysis Program today!
Below are some similar articles that you may find interesting.
What You Need to Do If You Are Called Upon to Lead a Health System-Wide Cost Reduction Program
Benchmarking: The Most Important Data and Evidence You Need to Have in Your Toolbox
Clinical Supply Utilization Management: Prevention is Better than the Cure