Healthcare Value Analysis Hospital Consulting and Benchmarking for Supply Chain Savings

In mathematics the terms “Factor” stands for numbers that can be multiplied together to form another number (e.g. 4 x 3 = 12). So 4 x 3 are factors of 12. However, they aren’t the only factors; 1, 2, 6 and 12 are other factors of 12 too. These missing factors would be called the “X” factors of 12. If you stopped searching out all of other factors of 12 then your job isn’t finished yet!

When most value analysis teams analyze a product, service or technology purchase they stop at the first factor (or alternative) in their evaluation process instead of aggressively searching for two, three or even four other “X factors” (or alternatives) that will meet their customer’s exact functional requirements at the lowest possible cost. As a result of not looking for more alternatives these teams are missing a huge opportunity to squeeze out even more savings for their healthcare organization.

This little known concept of missing the “X Factor” is especially true when teams review and approve new product, service or technology requests. My observation has been that 98% of the time value analysis teams will approve these new requests without searching out lower cost alternatives to recommend to their requisitioners. The result leaves hundreds of thousand of dollars on the table – untouched!

To recap this powerful concept, if your value analysis team isn’t searching out more then one alternative for all of the commodities that you are purchasing, you are losing tens of thousands of dollars annually in new savings because your job -- isn’t finished yet!

P.S. If you are looking to redefine and improve your savings yield by 3x, 4x or even 6x, why don’t you check out our advanced value analysis programs today!

“Value Analysis Has A 66-Year History Of Innovation And Discovery That Has Been Mostly Overlooked By Value Analysis Practitioners”

I start most of my value analysis seminars and workshops with this bold statement, “Value Analysis has high name recognition in the healthcare industry, but is still the most misunderstood and underutilized savings and quality tool available in healthcare today!” This declaration then sets the stage for a frank discussion on what value analysis is -- and is not.

This is the reason why I would like to share with you today 10 things you don’t know about value analysis and that have been mostly overlooked by value analysis practitioners that you need to know to become proficient in this art, science and discipline.

The concept of value analysis has been around for 66 years. It was developed, nurtured and proven to be a powerful cost and quality tool to improve the value in any product, service or technology during the Second World War by General Electric Company.

Larry D. Miles is the Father of Value Analysis. He created this value-based system while he was the Manager of Value Analysis and Value Engineering for the General Electric Company in the 1940s.

VA was originally designed to help manufacturers design, make and sell more products competitively at good profits either by holding their quality while reducing their costs or holding their costs while increasing quality or, when needed, both.

At the core of the VA system that Larry Miles designed is the relentless search for “best” value in our customer’s eyes – not ours. It’s not about price…it’s about performing a functional analysis of our customers needs, wants and desires, then packaging them into a product, service or technology that meets their requirements at the lowest possible cost.

Value Analysis is all about the study of the function of the products, services and technologies we are buying. It’s about problem solving, creativity and disciplined decision making.

A key tenet of value analysis is that all costs are related to its functions or its reason for being. If you know your functions, solicit and buy only functions -- not their aesthetics -- you can reduce your costs by up to 26% on, any and all, commodities you are purchasing.

Value Analysis has a defined six-step system to be religiously followed to insure disciplined thinking to improve your cost and quality on all of your purchases. Employing this system is NOT AN OPTION if you actually want to be a professional value analysis practitioner – it is a requirement!

Value Analysis practitioners learn quickly that what their customers say they want and absolutely positively need are quite different from what they are purchasing or requesting now. By truly understanding their functions that their customer’s need, value analysis practitioners can have lower cost and much better results for their customers.

Value Analysis is the study of function and the search for alternatives to meet the required functions at the lowest possible cost. It’s not about price, sourcing or standardization. This has been mischaracterized as value analysis for 21 years now.

Larry Miles (the father of VA) recommends 40 hours of Value Analysis classroom training for starters, and then 40 hours of on the job training to master the tools and techniques of Value Analysis. If you haven’t had one hour of training for your value analysis team in this discipline, then you can guess why you still have unnecessary, unwanted and unneeded costs, variations and defects in everything you buy.

These 10 things you don’t know about Value Analysis are “just the tip of the iceberg” of the things you need to know if you want to advance to the next level of supply chain savings and quality improvement at your healthcare organization.

I have been a Value Analysis Practitioner and trainer for 27 years now, and I’m still learning something new and exciting every day about this art, science and discipline. The question you should be asking yourself is “are you learning something new and exciting about Value Analysis everyday too?” If not, then you need to really, in fact, learn what Value Analysis is all about so you can use the term Value Analysis with full authority, knowledge and confidence as it was designed, not as it has been misused, misapplied and mislabeled for 21 years.

For Immediate Release

Contact: R.W. Yokl - 800-220-4271

One of the Most Important Supply Chain Tools to Be Introduced In the Past 25 Years According to a Leading Supply Chain Expert

Most healthcare organizations don’t have a utilization benchmarking tool to pinpoint, with certainty, where all their utilization savings reside, therefore are missing an extremely important power tool in their toolbox that can save them 3%, 6% or even 9% in their supply chain expenses. The good news! With SVAH’s new UTILIZER™ Utilization Management Dashboard, healthcare organizations will have the exact tool that they have been searching for to quickly and easily uncover all of their utilization misalignments.

Skippack, PA June 29, 2007 - We all know that a hammer is used to strike nails, a drill is use to make holes and a screw driver is use to turn screws. We call this using the precise tool for the right job to get the best results! Then why do healthcare organizations continue to use the wrong benchmarking tool to uncover their utilization savings? The answer is that we don’t always know there is a better tool to get the job done right the first time!

Robert T. Yokl, President of Strategic Value Analysis® In Healthcare (SVAH), an acknowledged expert in supply chain management, recalls talking to a healthcare supply chain manager a few months ago who told him that he was working with three databases (a spend manager, analytics manager and clinical manager), but still couldn’t uncover his hospital’s utilization misalignments. While SVAH’s own measurements showed however that this hospital had $4.2 million in utilization misalignments that were invisible to this supply chain manager. “This is the quandary that too many healthcare supply chain professionals face today, how to move to the next level of savings performance”.

More importantly Yokl states, “If a healthcare organization doesn’t have a utilization benchmarking tool to pinpoint, with certainty, where all their utilization savings reside, they are missing an extremely important power tool in their toolbox that can save them 3%, 6% or even 9%.”

“When you consider that a hospital, system or IDN can have 18,000 to 48,000 or more products (in 176 categories of purchase) in their MMIS system, where do supply chain professionals get started probing for these hidden savings?”, Yokl asks.

“The good news” Yokl predicts, “is that with SVAH’s new UTILIZER™ Utilization Management Dashboard healthcare organizations will have the exact tool that they have been searching for to quickly and easily uncover all of their utilization misalignments.”

Over the last seven years SVAH has conducted hundreds of utilization benchmarking studies for hospitals, systems and IDNs employing their own proprietary utilization dashboard which has identified close to a half a billion dollars in utilization misalignments for SVAH’s clients.

SVAH has now decided, after much internal debate, to make available their proprietary utilization dashboard to the marketplace as a monthly subscription service. This is because they now believe that periodic utilization studies aren’t a timely or effective way to manage a multi-million dollar supply chain business.

“We believe that a much better way, after we have repeatedly observed that our client’s utilization patterns are changing so rapidly (in less than three months in some cases), is to provide our clients with real-time access to mission critical and actionable information.”

This then is the genesis and the reason for SVAH introducing its new UTILIZER™ Utilization Management dashboard which Yokl believes,” Is one of the most important supply chain tools to be introduced in the past 25 years.”

Yokl says, “that the UTILIZER™ Utilization Management Dashboard will be provided as a subscription service on a fixed monthly fee basis (with a 30 day cancellation for any reason) to identify all of our client’s utilization savings.” SVAH will also provide its clients with unlimited phone and e-mail coaching and consulting to assist them in the implementation of the savings that have been identified with the UTILIZER™. SVAH will also provide them with quarterly refreshing of their purchasing data so clients will always be on top of their utilization misalignments. “The best feature of our UTILIZER™. subscription services,” Yokl states, “is that we can have new clients in the drivers seat within 30 days.”

About The Company: Strategic Value Analysis® In Healthcare, (SVAH) Skippack, Pennsylvania, is a software, training and consulting firm specializing in supply chain management. SVAH’s mission is to give our clients greater control over their supply chain by providing them with better information, better focus, and better systems so they can make better decisions on their second biggest expenditure.

For More Information Contact:

Robert W. Yokl

Vice President

Strategic Value Analysis® In Healthcare

800-220-4271

ryokl@strategicvalueanalysis.com

www.strategicvalueanalysis.com