Value Analysis Begins and Ends with the Customer
If you pick up a copy of Consumer Reports (CR) you will note that they use a check mark to designate what CR considers their “Best Value” products, services or technologies in every category of purchase for any given year. This check mark designation is determined by vigorous testing of the commodities price, service and reliability. For instance, in a recent CR’s study titled ‘New Car Ratings’ CR checked off four cars as the “Best Values” in 2019 with prices ranging from $29,889. to $43,155. However, CR’s rating categorization system is missing one important value analysis factor. That is the “Best Value” is in the eye of the beholder (value analysis begins and ends with the customer).
Best Value Is In The Eye of the Beholder
A few years back, my wife looked at a CR “Best Value” Audi automobile but its driver’s seat was very uncomfortable for her even when adjusted properly. Consequently, this wasn’t a “Best Value” for her. I remember another time when a client of ours who needed to purchase new hospital beds had their nurses test several manufacturer’s beds. Their thorough value analysis and functional tests resulted in them buying the highest priced bed. Their reasons were that it met all the functional requirements but was by far the easiest one to use for their nurses. There again, the highest price bed was the “Best Value” bed for this hospital.
Price, Service and Reliability Are Important, But Shouldn’t Be Your Only Buying Criteria
I just bought a new 2019 Kia Sorento in January, not because it was the lowest priced CR rated SUV, but because the Kia Sorento provided me with all the necessary functions and features that I considered most important to reliable, safe and of course happy driving. For instance, I didn’t need a sun roof, oversized trunk or preset power seats. What I did need was a SUV with a fair price, good service record and superior reliability. I’m my opinion, I obtained these attributes with the Kia Sorento. And I saved about 25% overall compared to my former SUV.
How Does This “Best Value” Tenet Relate to Healthcare
I frequently talk about catalog buying being very prevalent in the healthcare supply chain. Meaning, your department heads and managers don’t define the functions and features that are most important to them in their products, services or technology purchases like I did with my Kia purchase. Instead, they are relying on a manufacture’s catalog or their sales rep to define their functional specifications for them. This increases the cost of the products, services and technologies you are buying in most categories of purchase.
A better way is to have your department heads and managers define their “Best Value” products, services or technologies by defining the functions and features they need to reliably perform their services for your patients. This is the job of your value analysis teams when they receive a new product request from your department heads and managers: To define “Best Value” in your customer’s eyes. Then you will no longer need to worry if you are getting the best price, service and reliability on any product, service or technology because you will always be obtaining, by definition, “Best Value” on each one of your purchases.
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