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SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

December 9, 2001

TAKING YOUR COST MANAGEMENT PERFORMANCE

TO THE NEXT LEVEL!

Robert T. Yokl, President

The HCP Group, Ltd.

From my observations over the last 20 years, healthcare organization’s cost management performance has matured from an Awareness Phase in the 80s to an Understanding Phase in the 90s. Yet, few hospitals or systems have reached the Competency Phase or   Superior Phase in the 21^st century due to performance “GAPS” in their cost management programs.  As cost management skills and processes mature the basics of this discipline must evolve to the next level of maturity to enable your healthcare organization to survive and thrive in these turbulent times. 

What’s Holding Back Superior Performance? 

There are eight key reasons or factors that we have identified that are holding back superior performance in cost management at our nation’s hospitals and healthcare systems today:

1.                No Road Map 

Most cost management initiatives are started without much thought about strategy development and deployment, thereby, getting off on the wrong foot before they get started. 

2.                Time-Knowledge-Manpower 

There is never enough time, knowledge or manpower for cost management initiatives, because material management and performance improvement directors believe this is their area of responsibility alone. 

3.                Winging It 

The lack of a defined scientific process for evaluating products, services, technologies, systems or process, when it is much easier to just WING IT!  

4.                The Puzzle 

No central database -- just multiple spreadsheets being continuously pieced together without capturing vital documents, studies and projects in a standardized platform for the long term. 

5.                Who Did What, When and Why 

No follow up, follow through or accountability for studies or projects.

6.                Round Peg In A Square Hole 

The conventional wisdom that standardization of products, services, technologies, systems and processes is the goal of cost management, when in fact the goal should be customization. 

7.                Trial and Error 

Consuming clinicians’ time on trials and/or meetings without first defining their exact functional requirements. 

8.                Clinician Push Back 

A healthcare organization’s practice of pushing or pulling clinicians in the direction of change, as opposed to partnering with them.  

As these eight reasons suggest, moving from the Awareness Phase to the Superior Phase of cost management is an evolutionary process, which usually requires higher-level skills and processes (identified as “GAPS”) than a healthcare organization has at the current time.  To move to the next level of performance you must evaluate your current state and envision your future state, then develop and prioritize your plans to get there. 

  What Level Of Maturity Is Your Healthcare Organization? 

As stated previously, there are four levels of cost management maturity: Awareness, Understanding, Competency and Superior Performance.  Which level of maturity is your healthcare organization?  And how effective and efficient are your cost management systems?  These questions can be answered with a Cost Management Self-Assessment Instrument that I would be happy to email you, just for the asking at strategicva.com.

Robert T. Yokl, President, The HCP Group, Ltd., has over 35 years of experience as a consultant and manager in the field of Supply/Value Chain Management and is one of the country's leading healthcare experts in value analysis, value engineering and materials management. He is the developer and program leader of the award winning Certified Value Analysis Practitioner Training Program™. Mr. Yokl is also the developer of the healthcare industry's leading ValueNetCentral™ Value Analysis Software. Over the past two decades he has trained thousands of healthcare managers in his patented Strategic Value Analysis™ and Team-Based Project Management™ processes and has assisted scores of organizations in developing their own value management programs. He has published six books, videos and audios on supply/value chain management. His latest book being, “ Strategic Value Analysis™: The #1 Smart Strategy for Taking Cost Out of a Healthcare Organizations’ Supply/Value Chain”.