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SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

September 9, 2001

Strategic Value Analysis™: 10 best practices IN U.S.

We are all searching for the best practices (benchmarks) in value analysis in order to obtain greater savings yields and quality gains, but where and how can we find them?  To speed up your search I am offering you 10 BEST STRATEGIC VALUE ANALYSIS™BEST PRACTICES that we have observed or initiated at healthcare organizations throughout the U.S. to move your VA program to the next level of savings and quality gains: 

1.                  Team-Based:  Value Teams are now coming into there own throughout the U.S., because they make more sense then VA committees in getting the job done faster, better, by involving customers, stakeholders and experts who understand their products, services and technologies much better than a committee member or members collectively can or should.  

2.                  Extensive Training: Value analysis is an art and a science with a 50-year history that requires 40 to 80 hours of classroom and just-in-time training to truly become proficient in this discipline. Healthcare organizations that are making this investment in training their Value Teams are receiving a minimum of 100:1 ROI for their efforts. 

3.                  Standardized Process:  Too many hospitals are “Winging It” when it comes to value analysis; whereas, best practice hospitals/systems have a defined value methodology that their Value Team members follow religiously on each of every value study that they perform.  By adding this disciple to their VA program best-practice hospitals/systems are realizing greater savings and quality gains. 

4.                  Function Oriented:  Value analysis is the study of function and the search for alternates, not price.  Value analysis goes beyond price to identify the true requirements of your customers and meets those requirements at the lowest possible cost.  Best-practice hospitals/systems who get this important differentiation are savings 30% to 50% on each commodity group they study. 

5.                  Customer Focused:  Value analysis begins and ends with the customer at best-practice hospitals/systems.  However, spelling out just what products, services and technologies will meet our customer’s exact requirements is the real challenge. This challenge is being met through VA/VE Customer Mapping™ to truly understanding customers exact requirements, then positioning customers for the change(s) that you will be proposing to them with your value justifications. 

6.                  Clinician Ownership:  The #1 challenge for Value Practitioners in healthcare today is obtaining buy-in from clinicians on product, service and technology changes that they are recommend.  Yet, best-practice hospitals/systems have solved this challenge by have their clinicians customize the products, service and technology they are purchasing, as opposed to standardizing on products, services and technologies they won’t accept or buy-into. 

7.                  Strategic Planning Driven:  Most value analysis programs focus their efforts on GPOs contract and requisition driven offerings, whereas, best-practice hospitals/systems strategically plan their value analysis candidates and target their savings.  With the result, that strategic planning driven VA programs, save 10 to 15 times more than GPO and requisition driven VA programs. 

8.                  Outcome-Based Results:  Best-practice hospitals/systems track VA savings and quality gains through agreed upon metrics and milestones with their executive management to enforce discipline and ensure outcome-based goals are met and/or exceeded. 

9.                  Decision Support:  Real time data, in an organized, structure and cleansed format, is provided by best-practice hospitals or systems for their Value Team members use to DataMine for the gold nuggets that surface with data driven value studies.  

10.              Knowledge Management:  Best-practiced hospitals/systems capture all value studies documentation in a centralized database to be shared with all internal and external collaboration partners, as apposed to reinventing the wheel year after year.