Value Analysis Steering Committee: A Value Analysis Prerequisite

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We have worked with hundreds of value analysis teams over the last two decades and have discovered that the most successful, high-performance value analysis teams have had their CEO establish a value analysis steering committee to monitor, guide, and arbitrate disputes related to their healthcare organization-wide value analysis program. We see it as a value analysis prerequisite!

Some healthcare organizations have so-called value analysis steering committees, but they really function as the actual value analysis committee/team. That’s not what we are talking about here! This committee consists of representatives from your senior management whose role is not to review and evaluate your product, service, and technology requests or GPO offerings, but to provide your value analysis team(s) with overall direction and guidance. 

A typical monthly meeting agenda of a value analysis steering committee would consist of: (i) review of monthly savings report (new savings this month, savings fiscal year to date, cost avoidance, and rejected savings initiatives) (ii) report from team leaders on progress from last month and the challenges and opportunities they have identified, and (iii) issues that are impeding their progress.

We see the most important responsibility of this committee is to arbitrate disputes between department heads and managers and the value analysis team leadership, since this is what holds back most value analysis teams from being successful. For example, we helped a client to identify $725, 989 in telecommunications savings, but the telecommunications director at this hospital wouldn’t seriously discuss this project with the value analysis team’s project manager assigned to this study. When this topic was brought up by the chairperson of the steering committee, after being informed of this issue, she confronted the telecommunications director’s vice president at the committee meeting, who didn’t have an excuse for his director’s intransience. Fast forward one month and this savings was implemented and booked by the team.

This is the power of the value analysis steering committee. It can make decisions quickly that can move your value analysis projects forward, or at least put issues to bed if the committee agrees with the department head or manager’s position on an issue. Either way, this committee can keep the ball moving forward for you, as opposed to having roadblocks that are never removed from your value analysis team’s way.

The value analysis steering committee should be chaired by your president, executive vice president, vice president of finance, or senior vice president. The reason you want the highest level of management to chair your committee is that it gives it status, decision making power, and clout. The membership of your committee should include, but not be limited to, the following members: supply chain manager, value analysis coordinator, value analysis team leaders, director of quality improvement, vice president of finance (if not selected as chairperson), vice president of nursing, vice president of support services, vice president of medical affairs, and a recorder. The goal here is to have the right stakeholders on your committee that can make decisions for their divisions, which can differ from facility to facility.

I can speak from experience that not having a value analysis steering committee in place to monitor, guide, and arbitrate disputes can often cover up serious deficiencies in your healthcare organization’s value analysis program. I’ve seen team leaders avoid their responsibilities, ignore chronic problems, and miss most of their team meetings. Then senior management, after many months, wonders why their value analysis team isn’t saving money. It’s all about accountability!

In the final analysis, that’s what your value analysis steering committee can do for you; hold all team leaders and team members accountable for your value analysis program’s success. Don’t miss this critical structure in your value analysis program!