Value Analysis Analytics

Change of Mindset

            For decades, supply chain and value analysis professionals have been focusing their savings efforts on reducing their prices and maximizing their standardization of the products, services and technologies they have been buying.  The advent of GPOs has made this chore even easier. Since your GPOs package savings opportunities is in the form of contracts, your healthcare organization only needs to evaluate and select the best GPO offering that meets your exact requirements.  It’s fast, easy, and a somewhat straightforward process.

            Unfortunately, this universal best practice has embedded price, above all else, into all of your value analysis team’s conversations to the exclusion of other contributing cost factors.  This is one of the biggest challenges we find when we are facilitating value analysis teams: changing team members’ mindsets from a price orientation to utilization awareness. 

            One of the reasons for this phenomenon is that it is relatively easy to determine “best price” from competing vendors, GPO contracts or local sources, whereas it is much harder to uncover utilization misalignments that are hidden from your view. Value analysis team members take the path of least resistance when searching for new savings opportunities.  It is just easier to do so!

            This is the mindset that needs to change if your hospital, system or IDN is to take full advantage of the power of value analysis analytics. Since the data along with analysis will lead you to robust savings opportunities, you will still need to change your healthcare organization’s culture and focus on price to adopt a new philosophy of reducing your total cost from acquisition to disposition. As Sherlock Holmes would say, “It’s elementary my dear Watson, you can’t have one without the other.”