Strategic
Value Analysis®
in Healthcare
Dramatically Improve Quality While Reducing Supply Costs
Did You Know...?
That Value Analysis Was Developed Back In the 1940's After World War II as a Way to Find Lower Cost but Higher Quality Alternative products and methods. This was Due to the Lack of Material Resources At The End of The War.
Savings Beyond Price -Weekly eNewsletter- April 11, 2007
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Are You Competing With Or Without Analytics?
Analytics is the science of logical analysis (preferably employed with software) that can and will optimize your supply chain. What I mean by optimize is to make your supply chain as effective, perfect and as useful as possible. It’s all about using information or data to “re-think” what we are doing.
For instance, a client of ours, who is making use of utilization management software (a data analytics database) found that their best opportunity for savings was in their laundry cost which had crept up by 22% over the last few quarters. Without this analytical tool, how would they have known this was happening, considering they purchase 18,888 products, services and technologies annually?
If you are looking for a faster, better, quicker and more reliable way to effectively manage your supply chain, then you need to start making the logical analysis of your data more useful. In this way you can see your unfavorable trends, utilization misalignments and value mismatches at a glance.
Don’t make your job even harder than it already is; use analytics to make it much, much easier!
Your Partner in Supply Chain Savings,
Robert T. Yokl
President & Chief Value Strategist
P.S. Why not schedule a test drive of our UTILIZER™ Utilization Management Software to see how much easier it can be for you to find your next big savings opportunities.
WWW.PRODUCTSTANDARDIZATION.COM
There Are “Big” Savings Beyond Your Core Products, If You Know Where To Look For Them
“We Tend To Focus On What Is Visible, And Ignore The Invisible”
In looking at healthcare organizations’ supply spends we find that their purchase services expenses are equal to or greater than their supply expenses. Yet, most healthcare organizations focus their cost reduction efforts on their “core” supplies expenses which are highly visible to them, and ignore their somewhat invisible purchase services. My point here is that there are “big” savings beyond your core products, if you know where to look for them.
Case in point: A client of ours saved $96,293 (or 70%) on a $137,222 service spend on their rental of specialty beds by revising their policies and procedures on how the beds were rented. In addition they found lower cost alternatives that didn’t require beds to be rented at all.
I could cite purchase service savings in telecommunications, energy cost, credit and collection, transcription, postage, temporary help, etc., that were double digit as well. But I’m sure you get my point here that we tend to focus on what is visible, and ignore the invisible to our disadvantage.
Now that the supply side of the savings equation is being ratcheted down and squeeze tight, new opportunities for savings can be found in your purchase services. All you need to do is to lead your supply chain team in a new direction to attack invisible costs that have been just waiting to be harvested.
Where is the utilization savings in healthcare organizations today?
From our detailed client engagements, 77% of all remaining supply savings opportunities reside in Supply Utilization (Waste, Inefficient Use, Over-specification, Under specification, etc.). These savings opportunities account for more than 5% to 8% of your entire supply expense budget as compared with only .5% to 1% savings in price related areas.
Hospitals and health systems have been increasingly reliant on their Peer Benchmarking Reporting which does shed some light on which department of your hospital may have savings opportunities but that is about as far as it goes! Your C-Suite is looking at these reports and turning around and asking you to delve further into these supply categories ASAP! But, where do you go when a benchmark tells you you can save $868,000 in your Surgical Services Suite? Or $578,998 in savings on your Med/Surg Supplies?
It's like trying to find a needle in a Haystack!
It doesn't have to be that way any longer! SVAH has a fast an easy way to find out where all of your Utilization Savings opportunities reside without all the guess work or missed steps. AND, these savings will literally come to you on a regular basis!
To learn more about the UtilizerTM - The Next Generation of Supply Performance Benchmarking Tool or to take a TEST DRIVE of the system call today 1-800-220-4274 or fill out the test drive form below.
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