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September 18, 2001

Value Analysis Empowers Employees To Save More!!

In this fast paced healthcare marketplace, department heads and managers have less and less time to focus on their day to day activities let alone work on special projects, i.e., value analysis , yet these projects are necessary for the financial well being of every healthcare organization.  In a recent article published in Purchasing Magazine, it showed that 80% of the purchasing decisions were made by individual department heads and managers (the owners, users and stakeholders of the products purchased) with the purchasing department heading up the strategic sourcing of these purchase decisions.   With this in mind, it’s becoming more and more evident to healthcare organizations that they need to educate their department heads and managers in value analysis strategies and tactics to manage and controls their non-salary costs.

Are Healthcare Organizations Harnessing their Human Power to Its Fullest?

Let’s look at how organizations are trying to accomplish value analysis initiatives today.  Most organizations recognize that they need to have their own value analysis programs in place. In doing so, they form committees or teams with members who they believe have the most knowledge about the products, services or technologies under discussion.   The problem with this approach is that committee or team members are coming to the meetings with a basic understanding of what needs to be done, but with no clear cut process in place for them to work from.  They will have to rely on instinctual methods and practices that have worked for them in the past to accomplish their projects.

Without Proper Training, Cost Savings Is Hit or Miss at Best!

Traditionally, these committees or teams will quickly be able to attack the low hanging fruit (easy savings opportunities) that were there at the time that the initiative(s) was started by making simple contract/vendor changes, price changes, implementing GPO offerings with savings already spelled out, etc.  What happens when projects become more complex?  What happens when every committee or team member goes off and does their project in the way that suits them best? How sure can organizations be that their committee or team members have performed the most effective study?  The answer is simple, without a proven standardized process in place you are going to have studies done in many different ways.  A small percentage of these studies will have effective long term results and most having to be revised and redone over and over again while expending more and more of your organizations human resources to do so. 

Healthcare Organizations Train and In-service Their Clinicians Regularly in There Respective Disciplines, Yet Fail to Recognize the Value Of Training Their Department Heads and Managers In Value Analysis and Value Engineering.