Strategic Value Analysis In Healthcare

Weekly Strategic Value Analysis Newsletter

Fast Target Savings

Strategis^TM Value Management

ValueNet Central ^TM Value Analysis Software

About HCP

Client List

Articles and White Papers

Contact HCP

SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

August 13, 2001

The Law Of Diminishing Returns -

What Does It Take To Move Beyond This Challenge?

A new study published by the Healthcare Financial Management Magazine showed that while hospital FTEs are down nationally, hospital non-salary expenses have increased at a rate of 5.3% (expenses/discharges) over the last two years. What is the cause of the increase and what can we do about it?   Over the last five years the savings from group purchasing, standardization and prime vendor contracts have become almost invisible on a hospital’s bottom line.  In fact, HCP’s studies have documented the impact to be less than .005%.  Non-salary expense have risen over the last five years, because the excess costs are now and will continue to be squeezed out of your healthcare suppliers’ supply chain.  Vendors are screaming that they have no more price concessions to give to their healthcare customers! We call  "THIS THE LAW OF DIMINISHING RETURNS” (Click Here to See Graphic). 

You are undoubtedly familiar with this challenge, what can you do about it? 

By embracing the highly effective techniques of value analysis, you can cost effectively use methods that are so simple, yet so powerful for your organization.  Building a strong value analysis program will successfully eliminate your organization's fixation on purchase price and refocus your non-salary expense management efforts towards your savings goals.  With this practical approach you can determining your customers exact requirements -- by building your specifications (best practices) using the value methodology.  You will be pleasantly surprised with this powerful savings and quality improvement strategy.  You will have nothing less than BIG savings obtained for your healthcare organization, thereby, eliminating waste and inefficiency in your products, services and technologies’ supply/value chain.  Value Analysis is not complicated, anyone can perform these scientific value studies, if you know how!  VA will give you the knowledge that will help you determine non-conforming feature rich products, services and technologies; wasteful methods and practices being employed; and maintaining conformance to requirements.

Most healthcare organizations are “WINGING IT” when it comes to value analysis (VA), which has high name recognition, however, very few healthcare organizations are practicing its classic tenets.  Value analysis (also known as value management or value engineering) in its classic form is the most misunderstood and underutilized savings and quality improvement tool.  VA is simple, cost effect and very powerful savings technique that your healthcare organization can roll back the inflationary spiral that is negatively impacting your bottom line, but only if the concept of value analysis is applied with vision, your customers in mind and most importantly a cost effective process.

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”.