5 Major Benefits of Healthcare Value Analysis

Value Analysis Benefits

5 Major Benefits of Healthcare Value Analysis

Why let these diamonds in your backyard go undiscovered?

Like our counterparts in the business world, we must now look to cost reductions as the next big revenue source for our healthcare organization, so it can thrive and flourish while we adjust to the impact of the Affordable Care Act and the market forces of change surrounding it.  One low cost yet high yield methodology in your arsenal is value analysis. This can give you the next level of savings while maintaining and/or improving the quality of patient care. It is time that you take a hard look and recommit your entire organization to the major benefits that you can and will receive by enhancing your new and/or existing value analysis program.  Here are the five major benefits that your healthcare organization should be receiving from your current or upgraded value analysis program:

1. Dramatically Reduced Costs – Done correctly, with the right tools and systems in place, value analysis can offer double-digit savings opportunities beyond simple price negotiations or group purchasing contracts. Given the ratio of savings to revenue dollars, which can range from a low of 1:10 to as high as 1:30 savings to revenue ratio, it would take $10 to $30 in new revenue to generate the same bottom line results. Our business counterparts in industry have been generating profits in the weakened economy in this way. The same strategy is available to your healthcare organization, and value analysis is the engine to get you there.

2. Improves Quality of Care – Value Analysis is all about meeting our customers’ functional requirements exactly, which equates to meeting their quality goals as well. Functional analysis is a key success system for quality improvement, which all value analysis programs should be moving toward. If we meet our customers’ quality requirements every time, then this automatically eliminates waste, inefficiencies or feature rich products that would absolutely drive your supply costs up.

3. Uncover Hidden Opportunities Inside Your Operations  –   Forget savings for the moment as a benefit of value analysis because the learning curve that the value analysis process gives your healthcare organization is enormous. It can uncover risks that your hospital didn’t know were occurring with your products and services. If left untouched, these unnecessary costs and/or quality issues will grow exponentially. By using a proven VA methodology for your value analysis studies, you will be able to uncover these hidden and sometimes dangerous operational issues before they become endemic.

4. Educate Your Department Heads and Managers – Let’s face it, department heads and managers are the ones with the supply budgets that need to be managed. Those authorities and their employees are the ones who are specifying all the products, services and technologies you are buying.  It is now mission critical to have them actively involved in the value analysis program so they learn how to better manage their product and service purchases inside their budgets.  By actively participating in value analysis studies, in value analysis teams, this action alone will translate into savings on their own respective budgets.

5. Learn How to Work Together In Teams – There are many different teams in healthcare organizations, but very few effective teams where each and every member is tasked with duties to make the end results happen. Value analysis teams give you that power. We recommend that other than the team leader, who has duties as well, each and every value analysis team member should be assigned a VA study to lead. Teams are the future for solving the ever complex problems that healthcare organizations need to tackle in order to compete in the future. Train your team members in the best practices in the industry and you will reap the benefits of these dynamic teams.

There are acres of diamonds in your backyard that are not being mined. The time has come to rededicate ourselves to mining these diamonds. Value Analysis can give you the tools to convert these diamonds to dollars. More importantly, VA can give you a competitive advantage in your marketplace, if and when you decide to elevate your value analysis program to a whole new level of performance. If not, you won’t receive the full benefits of value analysis. It’s your choice.