Healthcare Value Analysis Practitioners: Emphasize the VALUE in Value Analysis

Sometimes we miss the point that it’s not how hard, long, or diligently our value analysis team(s) are working on their VA projects, but how much value they bring to our healthcare organization. For example, it’s a good thing if your VA team saves 3% on a widget you are buying, but it would be of even greater value to your healthcare organization if one of your VA teams solved a quality problem that was causing your nursing staff to retest every other patient for a point-of-use blood glucose test.

VA Teams Too Often Get Caught Up In Price and Standardization

While price and standardization are a prerequisite for lower supply chain costs, in today’s healthcare marketplace they are the low-hanging targets for your value analysis teams. A much better target of opportunity for your value analysis teams is the waste and inefficiency in your healthcare organization’s supply/value streams. This opportunity represents 7% to 15% savings of your hospital, system, or IDN’s entire supply budget. For instance, why not have your VA team investigate why your surgical linen utilization has jumped 33% or $76,500 over the last 12 months. Or, why your cardiac catheter tray utilization has increased by 22% or $96,398 in the last six months. This is where the real VALUE resides in value analysis.

The Key to Your Value Analysis Success is Doing Less, Not More

Most value analysis teams are on overload due to the volume of new and renewal GPO contracts they need to evaluate. These are time vampires. Remember, the key to value analysis success is doing less, not more, yet, focusing on high value targets.

A better way of doing less, not more, is to automatically renew all GPO renewal contracts, unless quality issues have been reported during the term of the contract. You would at the same time review only new GPO contracts that can save your healthcare organization more than 5%, because the cost of change is 3% to 5%. Therefore, it would be a false economy to approve these GPO contracts.

This policy, when implemented, will then provide your value analysis teams with the time necessary to pursue the high value targets we just talked about where value is created in your healthcare organization.

Simplify Everything You are Doing in Value Analysis

The best way to continuously bring value to your value analysis process is to simplify it with the following four tactics:

  1. Learn to prioritize your VA agendas: There is no need to follow the first in first out system with your new products or GPO contract evaluations. Just prioritize them by the value (highest to lowest – savings, quality, or outcomes) they would bring to your healthcare organization.
  2. Limit meeting time to one hour, but use it efficiently: Any more time required for your value analysis meeting is generally wasted on nonessential dialogue.
  3. Say no to most new products, because they aren’t value multipliers: Incremental improvement in the products you buy won’t bring optimal value to your hospital, system, or IDN. Avoid product proliferation at all costs.
  4. Reduce all distractions: No cell phone calls, reading cell phone messages, sidebar conversations, or off agenda items.

To paraphrase Confucius, “Creating value with value analysis is actually really simple, but we insist on making it complicated.” Remember this sage wisdom the next time you set the agenda for your next value analysis meeting.