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- March 8, 2007
Robert T. Yokl
President & Chief Value Strategist
Greetings!
Big, Robust and Super-Sized Utilization Savings Won’t Be Uncovered With Just Any Old Benchmarking Tool!
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 we continue to use the wrong benchmarking tool to uncover our utilization savings? The answer is that we don’t know there was a better tool to get the job done – right the first time!
I remember talking to a supply chain manager a months ago who told me 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. Yet, our measurements showed that he had $4.2 million in utilization misalignments that were invisible to him.
Here’s my point! If you don’t have a utilization benchmarking tool to pin point, with certainty, where your big, robust and super-sized utilization savings reside you are missing an extremely important power tool in your toolbox.
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 you get started probing for these hidden savings?
My suggestion to you is to build, borrow or buy such a benchmarking system to uncover 76% of your new savings opportunities – BEYOND PRICE. So that you will have all of the exact tools that you will ever need -- for every job -- which you will be required to get done as a supply chain professional.
Your Partner in Supply Chain Savings,
Robert T. Yokl
President & Chief Value Strategist
P.S. If you would like to see how our proven and “client tested” UTILIZER™ utilization benchmarking tool works, we would be happy to give you a “test drive”. Schedule your test drive here.
Rushing To Judgment Sabotages Most Value Analysis Projects!
“ Speed Isn’t The Goal Of A Value Analysis Project, But Diligence Is”
We are all in a hurry to have quicker, faster and more rapid value analysis savings and quality improvements for our healthcare organization. In doing so, this “rush to judgment” sabotages most value analysis projects.
Here’s why!
I call this behavior going with the “first best idea” your value analysis project manager comes up with to save money or improve quality. Instead of searching out the “second”, “third” or even “fourth” best savings ideas before deciding on the most cost effective savings idea that leaves no money on the table -- untouched.
This reminds me of a trocar value analysis study (the hospital was buying seven functionally equivalent trocars) I audited a few years back. In a meeting that I was present, the project manager recommended to her value team members that they should standardize on one disposable trocar from their GPO at a savings of $25.000. I then interjected that this was a great “first best idea”, but what would be their “second best idea”?
After some brainstorming the team came up with the idea of going back to reusable trocars, which would save them $50,000 annually. I then said this was an excellent “second best idea”, but what would be their “third best idea”. After some discussion it was suggested that the team should consider re-posable trocars at a savings of $75,000 annually.
What was the team’s final decision?
That’s right the team decided to implement the $75,000 savings idea. But wouldn’t have made this decision without my coaching because they where on the road to rushing to judgment before exploring at least three “best savings ideas” before making their ultimate decision.
That’s why no value analysis project should be completed with at least three “best savings ideas” being evaluated. To do less is to sabotage your value analysis projects before they even get started.
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