We often hear that we only use 10% of our brain power. Well, the same is true of value analysis: We only employ 10% to 30% of the true potential of value analysis at our healthcare organizations. This is because we don’t realize that VA was designed to be a problem-solving system by Larry Miles, the father of value analysis. Therefore, VA can open up a whole new world of savings, quality, and better outcomes for your healthcare organization when you decide to adopt a total or holistic value analysis model.
Total or Holistic Value Analysis Model
For your hospital, system, or IDN to survive and thrive in the new healthcare economy we live and work in, you must up your value analysis game to be competitive. No longer will your new and renewal GPO contracts save the day. Consequently, you must dig deeper and broader into your supply streams for new and better savings, quality improvements, and better outcomes. This can only happen if you have:
1. A Sustainable Value Analysis Program: By sustainable we mean that your value analysis program pays for itself by at least a multiple of three (annualized VA staff salaries + team members’ time dollarized x three – savings = value justification) each year. Plus, it should help sustain your healthcare organization’s bottom line by saving an additional 5% to 15% annually – and keeping it in place!
2. A Focus on Quality Improvement: This tenet includes infection control, underutilization, and overutilization of products and services, plus maintaining and improving your processes that can lead to product failures if your value analysis teams aren’t vigilant.
3. Expanded Contract Conversions: It’s not enough to just review your new and renewal group purchasing, purchase service, and departmental contracts. Your VA teams must now expand their scope to: (i) perform value analysis studies, (ii) ongoing benchmarking, (iii) perform clinical trials, and (iv) utilization reviews on these contracts.
4. Fiscally Sound Technology Assessments: Your technology assessments need to be evidence-based, financially justified, and functionally driven. And don’t be the first to buy a new technology; always wait for conclusive evidence that it works as promised before committing to a long-term investment.
5. A Closed Loop for New Product & Service Evaluations: Make sure that all your hospital, system, or IDN’s new purchases are thoroughly vetted by your value analysis team. Tip: Don’t pay for any product or service that hasn’t gone through your VA process, which will solve any backdoor selling efforts you are experiencing.
Value analysis is one of the most powerful techniques ever devised to save money, improve quality, and increase efficiencies at your healthcare organization. Don’t just nibble around the edges with your value analysis program, deep dive with a total value analysis program to triple your savings, enhance your quality, and thereby up your value analysis game.
Embracing New VA Processes, Methods, and Practices to Make Your VA Job Easier
You might be thinking to yourself just about now – this Total Value Analysis Model is all well and good, Bob, but how am I going to get this all done with my current staffing, resources, and budget constraints? Well, the answer is to adopt new value analysis processes, methods, and practices to enable you to make your VA job easier. With this said, here is our most recent webinar, “Employing a Total Value Analysis Program: Assuring Your Future Success” that will give you the answers to this question. We hope you find it entertaining, inspirational, and valuable!