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SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

MAY 2, 2002 

CHANGING TIMES REQUIRE CHANGES IN PRACTICES

Robert T. Yokl-President -The HCP Group, Ltd.

“The healthcare industry is facing many challenges, one of which is declining operating margins. While there are bright spots, including organizations’ improvement in revenue cycle and better contract management, market forces of particular concern are increasing supply expenses. It is critical for a healthcare organization to apply sound business practices in managing its supply costs to assure itself of sustained advancement”. 

                                Healthcare Financial Management Association

Healthcare supply chain management is in an evolutionary state in the opinion of supply chain leaders in a recently released report by the HFMA. Changing times require changes in practices to bring about significantly reduced supply chain cost for the healthcare industry. Of particularly note from this report were the 10 best emerging practices that were identified by the HFMA after conducting 600 interviews with healthcare executives and supply chain leaders this year:

1.                Solicit increased EXECUTIVE SUPPORT and collaboration.

2.                Promote organization-wide AWARENESS of indicators and issues.

3.                Seek BUY-IN from clinicians to establish best practices to standardize patient care and reduce variation in processes and products.

4.                Develop systems, protocols, and processes to INTEGRATE INFORMATION for decision-making.

5.                IMPROVE efficiencies and controls related to PURCHASING FUNCTIONS, particularly through the use of INTERNET TECHNOLOGIES electronic catalogs.

6.                Cultivate VENDOR PARTNERSHIP by tracking performance, sharing information, and applying mutually beneficial supply chain solutions.

7.                Articulate the ORGANIZATIONAL VIEW OF SUPPLY CHAIN MANAGEMENT INTERDEPENDENCIES with clinical departments and other areas.  Seek solutions that reduce TOTAL RESOURCES cost through organization-wide collaboration and shared goals.

8.                Improve INVENTORY MANAGEMENT through: better understanding and control over unofficial inventories, application of just-in-time methodologies, and use of perpetual inventory systems.

9.                Evaluate appropriateness of supply chain management STRUCTURE AND STAFFING to ensure that clinical perspective is represented and to improve control of purchasing and inventory in key areas.

10.           INTERACT WITH AND SHARE best practices with peers.

The conclusion of HFMA’s report (www.hfma.org/FeaturedTopic/resource_management.htm) were that healthcare organizations are fighting a never ending battle to reduce their cost: due to decreased reimbursement and increased operating expenses, but the bright light in this forecast is that, “ both healthcare executives and supply chain leaders agree that there are significant future savings opportunities for improvement…” if healthcare organizations reinvent and streamline their supply/value chain.

 Copyright © 2002 The HCP Group, Ltd.

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”.