Value analysis has been in the healthcare lexicon for about 30 years, but it has only come into its own in the last 10 years. It’s my guess that 80% of healthcare organizations or their corporate parent have an employee or employees with the title of value analysis facilitator, coordinator, manager, director or even vice president.
This would be unheard of just 10 years ago.
While this is a major milestone for the healthcare value analysis community, there is still more work to be done. Here are 5 ways for value analysis professionals to shine in 2019:
- Integrate value analysis with supply utilization management: While value analysis, by and of itself, is a power cost management tool. Supply utilization management (or the management and control of the wasteful and inefficient consumption, misuse, misapplication and value mismatches in your healthcare organization’s supply streams) is even more powerful in reducing your supply chain overall expenses by 7% to 15% of your total budget .
- Stop “winging it” and develop a repeatable, trainable and auditable value analysis process: All value analysis programs have a paper flow protocol, but very few have a repeatable, trainable and auditable value analysis process (i.e., a series of defined steps taken in order to analyze a new, or current product, service or technology’s relative value to your organization). Why is this a big deal? Because, without such a process you are reinventing the wheel on each of your value analysis studies thereby wasting valuable time, money and talent.
- Train your value analysis team in the classic value analysis tenets: Value analysis has a 78-year history of savings and quality improvements. It’s not a homegrown technique. It was developed by Larry Miles, a value engineer, at the General Electric in the 1940s. It has six phases in its original format created by Miles. Along the way, new tactics were employed, like Target Costing, FAST Diagrams, Lifecycle cost, Weighted Evaluation Technique, etc., to refine and update Miles’ value analysis technique for future generations of value analysis practitioners. Take it from me, training is the magic bullet for your healthcare value analysis sustained success.
- Develop an annual strategic value analysis plan: You wouldn’t make a trip, even a short one, without a plan. Yet, 98% of healthcare organizations establish VA teams and then tell them to save money and while they are at it improve their quality and outcomes too. How do you think this works out? Well, for a time, these VA teams will save money, since they are picking ripe fruit. Then, they hit a wall and spend their time on new product or GPO evaluations that save very little. On the other hand, if you have an annual strategic value analysis plan, this scenario, I just talked about, never happens. You are always positioned to save money, and improve quality and outcomes.
As your healthcare organization’s price savings slows to single digits now that you and your GPOs have picked the ripe fruit from your vineyard, your hospital value analysis savings can continue to be double-digit for many years to come if you embed these four pillars into your value analysis program starting in 2019.
Are you looking to raise the bar with simple and straight forward tools and systems? Why not view a demonstration of SVAH Solutions VA and Utilization Management Tools today. The demonstration is no cost and no obligation but the information is priceless!