Value Analysis Professionals: Our Time is Now…Are You Ready?

Value Analysis Professionals: Our Time is Now…Are You Ready?

“There has never been a more perfect time for supply chain and value analysis professionals to fully engage in cost reduction.”

If you are looking to make a big impact in reducing your organization’s bottom line, there is no better time than the present for you to fully engage in this endeavor. With inflation and revenue challenges due to reduced reimbursement and other market conditions, most healthcare systems are facing budgetary shortfalls. The good news is that the best way to add money directly to your organization’s bottom line is to reduce costs.

There has never been a more perfect time for supply chain and value analysis professionals to fully engage in cost reduction. The savings you and your health system colleagues will generate will not only aid your organization’s bottom line but this profit will be used to improve care, buy better products/services, ensure capital programs are fully funded, ensure better raises and/or bonuses, as well as hire staff. Healthcare organizations are non-profit by nature, but really need to make profits in order to continue to raise the bar on services and overall care.

Value Analysis Led Cost Savings

What other clinically or even non-clinically oriented team-based program in the hospital is built to handle cost management in a 360-degree manner in a healthcare setting? Other than your entire management team engaging at all levels, it is the best process-driven game in town to tackle the next level of cost management/optimization while maintaining quality of care.

Once upon a time, when I first entered into the healthcare supply chain, value analysis teams were used primarily as cost management programs to reduce costs. This should be the goal once again. Use things like utilization management to funnel the proven savings opportunities to your VA teams and let them work through the VA process to drive out the savings.

Time Is Money

If you are working on a $220K or a $342K annual savings opportunity but you take six months to find solutions and implement them, then you just burned $110K and $171K worth of valuable dollars. Yes, you have to take some time to perform value analysis but the more efficient you are, the more you will save. Speed to savings is a reality. The faster and better you can accomplish savings, the faster you can aid your organization’s bottom line.

Where is the Low-Hanging Fruit?

We have been through the gauntlet of price savings over the past 10-15 years and are now at the point where it is extremely challenging to gain in an area that has had substantial increases over the past few years. That does not mean that there are still not big savings sitting right there in your supply chain ready to be acted on by your value analysis teams. The big dollars are more than likely invisible to you because they are not price but waste, inefficient use, feature-rich products, and value mismatches. You need to see all of your opportunities now.

Clinical Supply Utilization is the Perfect Tool to Fill Your Value Analysis Savings Pipeline

There is no better way to see the invisible savings beyond price than clinical supply utilization volume-centric comparable metrics and reporting. You are flying blind without this type of system to point you in the right direction as overall spend is not an indicator of any true change and your department heads and clinicians can talk you away. You need proof, and the proof that they are running over in multiple key performance indicators will give you the power to allow your value analysis teams to perform the much-needed savings studies.

Are You Ready?

You can go ahead and tell me today that you are ready for this challenge of taking your value analysis program to be the savings led program for your organization, but words only go so far. You need to have all of the key elements in place and people who understand the next level. Take the time to plan out your value analysis led savings program and make sure you are not working with both hands tied behind your back with little or no tools or training for you and your teams. Yes, you can change the focus on any VA team and get some results, but you won’t move the needle much without putting all of your major savings opportunities into your VA savings pipeline.

About Robert W. Yokl, Sr. VP of Value Analysis & Supply Chain Solutions
Robert is the Program Leader for SVAH Solutions that provides value analysis, clinical supply utilization, and savings validation tools to help organizations to gain the next level of savings beyond price and standardization.

Articles you may like:

5 Incredibly Useful KPI Tips for Supply Chain/Value Analysis Professionals to Know Where You Stand

5 Reasons Non-Conformance to Requirements is Holding Back Your Savings Opportunities