How Big Data and Analytics Can Generate Big Savings for Your Value Analysis Program

The typical healthcare value analysis program currently has two savings drivers: new purchase requests and group purchasing contracts. However, there is a third savings driver that needs to be integrated into your value analysis process if your hospital, system, or IDN is to survive and thrive in the 21st century.

Big Data and Analytics Can Generate Big Savings for Your VA Program

This third savings driver is clinical supply utilization that can only be identified with big data and analytics. Clinical supply utilization savings can represent millions of dollars in waste and inefficiencies that are now hidden in your healthcare organization’s supply streams. I have broken down five specific clinical supply utilization savings areas you need to be aware of for maximum penetration:

  1. Waste: Utilizing too many gloves, blades, bath kits, Oxisensors, etc., is so commonplace in a healthcare organization that it is considered normal. We therefore need to ferret out these new and recoverable savings with data.
  2. Inefficiencies: How many disposable sterile gloves does it take to get a job done? Sometimes just one, but we use two anyway. You need to uncover and then remind your hospital staff of these inefficiencies to break them of these bad habits.
  3. Misuse: Are you using more surgical instruments, drapes, glucose tests strips, or I.V. sets than is medically indicated? I can almost guarantee that you are, if you aren’t tracking and trending the usage of all your products, services, and technologies.
  4. Misapplication: Are you buying kits, trays, and devices that aren’t being deployed as designed? For instance, are your Foley trays being repeatedly opened only to get the Foley catheter from it and then all other contents discarded when it is designed to have all the products fully utilized?
  5. Value Mismatches: Are you buying higher price commodities when equivalent or better lower cost commodities are available for these same functions? Remember, the primary reason value analysis was created was to give us a process to search for lower cost functional alternatives with equal or better quality.  

None of these utilization misalignments I just outlined can be identified with the naked eye. That’s why you need to employ your healthcare organization’s big data and analytics to ferret out these savings.

Of course, you can stumble over a few of them by happenstance, but you will still have hundreds that you have missed that are costing your hospital, system, or IDN millions of dollars (yes, millions) annually.

Value Analysis Analytics: The New Science of Savings

We have coined the phrase, “Value Analysis Analytics: The New Science of Savings,” to highlight a new and better best practice to identify your top value analysis savings with the highest possible ROIs for your healthcare organization.

This will require, as Thomas H. Davenport, author of Competing on Analytics said, “The extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive (your VA) decisions and actions.”

Don’t let this definition of Value Analysis Analytics scare you into thinking that new value analysis tools and methods are beyond your reach. There are several healthcare vendors (including SVAH Solutions) that can provide you with this capability. It’s your job to seek them out if you are looking to have the ultimate value analysis program.

The Ultimate Value Analysis Program

We are all proud of the accomplishments of our value analysis programs over the last few years, but have we done everything possible to lower our healthcare organization’s supply chain expenses? The answer is that if you aren’t using big data and analytics to identify your clinical supply utilization savings, you have more work to do. This way, you will capture all available savings in your product, service, or technology’s lifecycle. Otherwise, your value analysis job is only half done!