Most healthcare organizations are employing value analysis committees to reduce their products, services, and technologies’ costs and maintain their quality, but are these committees truly adding “value” to value analysis? And, are they even practicing value analysis? Numerous VA committees that we have observed over the years have as many as 35 department heads and managers meeting monthly to review and approve new product, service, and technology offerings. Occasionally, these committees will investigate product, service, or technology failures that have been reported to them in some formal or informal fashion. But mostly, these committee members listen to the committee chair-person, who is usually the hospital’s materials manager, for an hour or more report on new or renewal contracts from their GPO. The materials manager usually handles the cost analysis (applying classic accounting principles) then the members are asked to vote (yea or nay) on these new or renewal contracts or to send the product up to a department for a trial to see if they like it. Committee members will then move on to their next meeting or appointment feeling good about their value analysis skills and how they added value to the VA process. NOTHING COULD BE FURTHER FROM REALITY!
Value analysis in the classic sense isn’t suitable, possible or profitable as a committee function, since VA requires in-depth studies of the products, services or technologies under investigation in collaboration with customers, stakeholders, and experts. This dynamic doesn’t happen in a committee structure, which we characterized as passive, valueless, risk averse, and a time waster. A much better way is to empower and train Value Analysis Teams of employees to make these savings and quality gains happen. Why? Because no committee member or members collectively ever see the negative or positive effects of how a product, service or technology is impacting its internal and external customers’ value chain. Yet, VA committees nation-wide approve billions of dollars of purchases annually, many times, with a narrow vision. A better management system to manage and control your purchases – from acquisition to disposition – is to employ Value Analysis Teams. In doing so, these VA Teams involve all internal and external customers in the buying decision and subject all purchases to rigorous VA tests in order to determine the most appropriate products, services, and technologies based on their functional requirements to meet customers’ wants and desires at the lowest possible cost.
VA Teams have unique characteristics, roles, and structure to enable them to be effective in their sphere of influence. They must be in alignment with your healthcare organization’s culture, compensation policies, and they need to develop creative strategies and tactics to align themselves with your organization’s short and long term goals and objectives. Value Analysis Teams are now coming into their own at many healthcare organizations throughout the country, because they make more sense than VA committees in getting the job done faster and better and by customers, stakeholders, and experts who understand their products, services, and technologies much better than a committee member or members collectively can or should. Value Analysis Teams add value to the value analysis process, whereas, VA committees do not.