Strategic Value Analysis In Healthcare

Greetings!

I was just re-reading my compilation book “Product Standardization and Evaluation,” which was a series of articles edited down by Charles E. Housley, MBA who at the time was the GURU of modern materials management in the 1970s and 1980s. This is still a great learning tool to healthcare professionals and many of the ideas in 1986 when this book was published still apply today.

In one of the main articles, Charles E. Housley laid out his vision of the successful hospital product evaluation committee. The main emphasis was on the known fact that hospitals did not have defined specifications for the products, services and equipment that they purchase! Hence there was a huge opportunity for savings because hospitals had been over specifying or under-specifying products and/or left themselves open to vendor or preference influences because they did not have clear cut documented specifications for all of their high dollar products.

Charles E. Housley, had hit the nail right on the head, and although we have committees and teams working today, few teams develop clear cut written/typed specifications for their exact requirements then begin evaluating products based on that criteria. Charles Housley spelled it all out for us back in 1986; will it take another 20 years for us to finally get it right?

Your Partner in Supply Chain Savings,

Robert T. Yokl, President and CEO

P.S. $65 off the Ultimate Value Analysis System, Only if You Order before May 31st.

How To Squeeze Even More Savings Out Of Your Supply Chain Expenses

“Look Broader, Dig Deeper And Touch The Edges Of Your Supply Chain To Find New Savings Right In Your Own Backyard!”

Supply chain professionals are always looking for the “next big thing” to squeeze even more savings out of their supply chain expenses. Let me state unequivocally “that there really isn’t a next big thing for squeezing more savings out of your supply chain, because they have already been invented and you probably already bought them.” The “next big thing” you need to save money is for you to look broader, dig deeper and touch the edges of your supply chain to find missed opportunities right in your own back yard.

There is still millions to be saved! Every hospital, system and IDN we have worked with has already bought, joined or subscribed to the “next big thing” (material management information system, benchmarking databases, joined an IDN or regional network, changed their GPO or have been trained in 6 Sigma, etc.), but we still find millions of dollars of savings for them that has been hidden from their view.

Why is this happening? This is because most healthcare organizations are still focusing on “price”, not utilization and customization of their products, services and technologies where their new supply savings are hidden. For example, after analyzing one of our client’s supply spend we quickly identified a patient care product that our client was purchasing at a cost of $52,100 annually that had been proven to be ineffectual and too costly by any measure by most other hospitals in the country. Yet, our client didn’t dig deep enough into their supply chain to realize this fact! They were just concerned about getting the “best price” for this product.

What does all this mean to you? If you are looking for the “next big thing” to squeeze even more savings out of you supply chain expenses you need to start “thinking differently and doing differently” when searching for your supply chain missed opportunities. Trust me when I say that, “these savings will happen quickly for you when you start looking for them “beyond price”.

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