Is Your Healthcare Organization Really Practicing Value Analysis?

Is Your Healthcare Organization Really Practicing Value Analysis?
Robert T. Yokl, President/CEO, SVAH Solutions

Our surveys show that only 1 in 10 healthcare organizations is really practicing the classic tenets of value analysis and none have taken a strategic approach in this discipline, thereby missing the opportunity to slash 7% to 15% off their non-salary expenses annually. This is because although they think they are performing value analysis studies, they are really doing something else, such as bidding, comparison shopping, vetting group purchasing contracts, or negotiating – and calling it value analysis.

It’s our observation that most healthcare organizations have now picked “the ripe fruit” in their healthcare organizations through group purchasing, re-negotiations of contracts, standardization, and prime vendor contracts, thereby obtaining the lowest price for the commodities that they purchase. With little savings left in this vineyard, now is the time to drive out all of the hidden costs in your products, services, and technologies by employing the classic tenets of value analysis as espoused in this magazine.

Value analysis by definition is the strategic, creative, and analytical study of the functions of products, services, technologies, and their value streams. Its objective is to determine the lowest cost of providing an equivalent or better performance of a required function at the lowest possible cost. If the tenets of VA are applied consistently and scientifically, it will enable your healthcare organization to dramatically reduce the total cost (not just purchase price) of your products, services, technologies, and their supply/value chains by millions of dollars a year and also improve your safety, quality, and outcomes.

Value analysis is a powerful savings tool, but if it isn’t applied strategically or NOT BEING PRACTICED AT ALL, then only meager savings will be generated by VA practitioners. On the other hand, if the right people, having the right tools, training, and a proven VA process are deployed by a healthcare organization to look at the right things, then millions of dollars can be saved for your healthcare organization annually.

About Robert T. Yokl, Founder & Chief Value Strategist for SVAH Solutions
Robert T. Yokl is President and Chief Value Strategist at SVAH Solutions. He has four decades of experience as a healthcare supply chain manager and consultant, and also is the co-creator of the Clinitrack Value Analysis Software and Utilizer Clinical Utilization Management Dashboard that moves beyond price for even deeper and broader clinical supply utilization savings. Yokl is a member of Bellwether League’s Bellwether Class of 2018.

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