May 23

Value Analysis Teams Need Proof That Savings Are Real in Order to Engage for Big Savings Beyond Price


“If you have proof on all of your value analysis reviews, you will eliminate wasted efforts that chew up time and yield little or no savings.”

Let’s talk about savings proof. We all want to go after the next level of savings for our organizations, but there is always one thing that holds us back and that is proof. It’s easy when we are looking at a new contract to put in the effort as it will give us a pretty good estimate of what we can save on price and standardization. But we are looking to save beyond price. So, how do we know how much we can save on something like clinical supply utilization management (CSUM)?

Time to Wring the Towel Dry on the Next Level of Savings

It’s 2023 – our department heads and managers won’t even allow us to perform a value analysis or utilization review on their products, services, and technologies unless there is proof that it is worth it to them and their clinicians. One of the best ways to get this proof is to establish baselines and start developing your cohorts using clinical metrics. If your cost per surgical case is 32% higher in a category than it was last year, then there is your proof for the surgery leaders to allow the VA study. This will work in any area of your organization because it is patient volume centric. Add in additional key performance metrics and cohort benchmark comparables and you can further prove that these savings are real and now you need to engage the department with your value analysis process to weed these savings out.

Take Lip Service Excuses Off the Table

In order to go after savings beyond price, you have to have evidence/proof that the juice is worth the squeeze in any and all categories. Without that proof, any potential savings will just be talked away right there in the value analysis meeting without any action taken or research done. I have seen this happen hundreds of times.

Here is an example and how proof can overcome it.

Value Analysis Manager with CSUM Report – Surgical energy instruments running 32% higher than last year and 28% higher than cohort benchmark. 

Surgery Manager on VA Team – We were really busy the last few months and I think we had a few new surgeons come on board.

Value Analysis Manager with CUSM Report – Actually we are accounting for that in your volume numbers so something else is going on and we need to perform a functional value analysis review to stop the cost increases (level them off) and find where we are utilizing more instruments historically and compared to cohort best.

(Without this proof to back up a VA Manager, they would have been stopped short with the “we were busier” lip service.)

Remember, those department heads and managers who sit on your value analysis teams are all for saving money and improving quality, except when it lands at their front door. Instantaneously the game changes for them as they only like the change that they bring about themselves, not what is pushed on them by a VA program.

If you have proof on all of your value analysis reviews, then you will eliminate wasted efforts on dry hole reviews that chew up enormous amounts of time and yield little or no savings for the organization. Getting your proof systems in place will make your job a whole lot easier as you can strategically focus your value analysis efforts on all the winning outcomes every time.

Below are some similar articles that you may find interesting.

It Is Okay to Go Back on a Previous Value Analysis Study to Do a Better Job!

Podcast 79 – Winning with a Clinically Integrated Value Analysis Process

Clinical Supply Utilization Management: Whose Job Is It?

Request Demo of SVAH’s Value Analysis and Utilization Tools


clinical supply chain, clinical supply utilization, Healthcare Value Analysis, Hospital Value Analysis, savings beyond price, supply chain, supply utilization management

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