Strategic Value Analysis In Healthcare

Supply Value Analysis Is Everybody’s Job, So Why Are Supply Chain Professionals Doing All Of The Heavy Lifting?

To Achieve the Full Benefits of Value Analysis Your Department Heads And Managers Must Be Fully Engaged In Your Value Analysis Process!

The typical value analysis committee or team process, at most of our hospitals, systems or IDNS, the supply chain professionals on the committee or team do 98% of the heavy lifting (or work), while the department heads and managers that are on the committee or team are just mere observers. This is a formula for you to generate meager savings and inadequate results!

For value analysis to be a truly dynamic savings and quality process, all of your department heads and manager must be fully engaged (not just a few), in your value analysis process. This is how you change from a "no" to a "yes" culture in less than 12 to 18 months. By fully "engaged", I mean that your department heads and managers have chosen to commit themselves to your value analysis process, as opposed to remaining aloof or indifferent about it.

This new direction of your value analysis program can only come about if your department heads and managers (organized into value teams) lead your value analysis initiatives. Supply chain professionals will fill a new role of facilitator, coach, trainer, consultant and resource for your value analysis team. This shifts the workload to your department heads and managers to make your hospitals’, systems’ or IDN’s savings and quality goals happen.

One of our client’s material managers has made this transition. They have gone from leader to facilitator, coach, trainer, consultant and resource. This material manager has told us that, "there was no way that my (material management) department could have discovered the waste or mis-utilization of (our) products and services. Without the (value) teams’ and administration’s support, (our value analysis program) would not have been as successful as it has been. " Isn’t it time that you think about forming value teams lead by your department heads and managers too?

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I am in the process of negotiating for a new position at a 285-bed hospital in the Midwest called “Resource Management Director”. I couldn’t help but notice in my search on the internet your article on value analysis practitioners commanding high salaries. If you are so inclined, I would be interested in your comments on salaries in this area.

The job description I am looking at requires a bachelor’s degree with masters degree preferred. I am an RN with a master’s degree in nursing and with more than 20 years of experience with more than 12 years of those years in quality and organization change. The job description looks quite demanding and I believe there are very few people in the organization or the area that are qualified to take this position. Do you have any words of advice for me?

The Resource Management Director works within the Quality Department to identify approaches and opportunities for operational and clinical utilization improvement; serves as the project manager for all resulting projects; sets goals, plans and prioritizes projects, develops communication plans and oversees the implementation of the communication plan; assists in the development and tracking of appropriate external and internal benchmarks; identifies and facilitates implementation of strategies designed to improve performance against those benchmarks; analyzes data to assist in the development of improvement plans and works with Information Systems, Finance, Materials and others to develop reporting methodologies; advocates for the use of established value analysis; processes by physicians, staff and managers across the organization; provides education across the organization related to costs, best practices, decision-making methodology and processes required to achieve measurable results; assists Value Analysis Teams to develop and implement conversion plans, serves as an ex-officio member and facilitates team meetings as needed; researches products and clinical topics as required to support decision-making of Value Analysis teams.

I agree this is a very responsible job requiring exceptional skill sets to be successful. It’s my opinion that the starting salary range for this position would be about $75,000 to $85,000 per year, especially with someone with your credentials. If this isn’t the salary range being offered I would request that you ask to be shown the salary analysis that was performed to determine this job classification. If your hospital can’t show you such an analysis, then they don’t have any idea of what this position is really worth. This should be your starting point for your negotiations.

P.S. If anyone else has a burning question that you would like me to answer, please call or e-mail me and I would be delighted to answer.

Without A “Scorecard” How Do You Know If You Are Winning Or Losing The Game?

SCORECARD: A card for keeping score of any contest, e.g. in team sports, for identifying who’s winning or losing the game.

Golfers keep one in their pocket and record their every shot. Big league baseball managers keep one that shows every pitch, run, error or score his team and opponent made that day. Just about every type of sales representative keeps a scorecard on the number of leads they receive weekly, and monthly, and yearly, their conversion rate for these leads are in percentages and dollars. They also note their missed opportunities to see if they are winning or losing the game. And yet, most supply chain professionals don’t have a “scorecard” to measure if they are on top of their game!

If You Don’t Have A “Scorecard” How Do You Know If You Are Winning Or Losing The Game?

Over the last year or so, we have uncovered over $30,296,342.20 in supply chain savings with our “no cost – no obligation” Supply Savings Scorecard for hospitals as small as 16-bed and for hospital systems as large as 2,200 beds. Prior to employing our scorecard, these healthcare organizations didn’t know the scope or magnitude of supply chain savings that were available to their hospital or system. Now that they know with certainty what their opportunities are, they can develop strategies and tactics to reduce these unnecessary supply chain expenses.

Wouldn’t You Like To Know What’s Being Left On The Table Untouched At Your Hospital, System Or IDN?

Our studies show that, on average, $18,719.20 in supply chain saving per occupied bed is still being left on the table at most healthcare organizations --- untouched! At a 55-bed hospital, this lost opportunity computes to $1,029.556.99 annually; at a 99-bed hospital $1,853,200.52; at a 125-bed hospital $2,339,900.26. All it will take to find out how much is being left on the table at your hospital, system or IDN is 15 minutes to complete our “no cost – no obligation” scorecard. Don’t you owe it to yourself and your hospital or system to know what your score is?

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