You can be like a blind archer and not hit your supply chain expense savings goals in any given year. Or, you can target your best value analysis savings for 2019* that will almost guarantee that you will achieve your savings down to the last penny. That’s what value analysis analytics can do for you. Here are three value analysis analytics measurements you will need to do this:
- Year-over-Year Usage By Line Item: What an eye opener it can be when you can see that a product or service’s in-use cost has increased by 13%, 18% or 23% year-over-fiscal year. This is a good indicator that these outliers need to be reviewed by a value analysis team to justify these increases.
- Utilization Misalignments by Line Item: Hundreds of products and services, when benchmarked against your peers’, will be shown to have higher usage patterns than your hospital, system, or IDN. These products and services need to be revisited by your value analysis team to see if they are within acceptable limits based on your own healthcare organization’s practices.
- Best Value Products or Services by Line Item: Generally, this measurement is most effective for hospitals, systems, and IDNs since it looks across all your supply streams to identify the best value (or lowest cost alternative) in every category of purchase. We aren’t talking about lowest price, but lowest overall in-use cost in its category (i.e. contrast media, lab tests, pacemakers, etc.). It’s the best way that we know of to standardize on the lowest cost products and services system-wide.
SVAH’s research has shown that very few healthcare organizations can pinpoint with exactitude where their best supply chain expense savings reside at any given time. As a president of a community hospital said to us recently, it’s mission critical for his hospital to have this important supply chain expense data available on demand. Can you, too, say that you have this expense data on demand when your president calls you late in the day for this information?
(*) If you, too, are interested in targeting your best value analysis savings for 2019, simply e-mail us at Ryokl@SVAHSolutions.com to schedule your AXIA Value Analysis Analytics™ Suite demo to get the ball rolling.