10 minute read
Five Major Benefits of Healthcare
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 ofchange 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
Value Analysis Benefits
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
Value Analysis Benefits
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.
I just read a quote, “What’s worse than training your workers and losing them? Not training them and keeping them” by motivational speaker Zig Ziglar, which says in 15 short words all you need to know about why training of your supply chain staff (and value analysis teams) is mission critical. You should paste this quote up on your wall so you don’t forget it.
Zig coined this phase, I’m sure, to show the lunacy of not training your workers because they may leave your employment sometime down the road. You may also believe that it’s expensive to do so, but consider the expense it will cost you if your workers aren’t productive employees. This goes for your value analysis teams, too!
It should also be noted that employees value employers who train them because it tells your employees that you think they’re important. I remember one hospital I worked for many years ago that had all of their department heads and managers continuously in training programs.
Every few weeks there would be a mandatory training program on reading financial statements, how to write memos, how to conduct a meeting, change management, how to conduct job interviews, etc. These gave me a master’s degree in business management without paying a hefty tuition. As an aside, it also built strong relationships between our department heads and managers and gave us all an esprit de corps that carried over to our day-to-day jobs.
Simply stated, training is the “Magic Bullet” for instilling in your workers (and value analysis teams) the right attitudes, methods and practices to make your supply chain operations exceptionally successful. It isn’t an expense, but an investment in your workforce’s future success.
Value Analysis Green Teams
It Isn't Easy Being Green
4 Strategies to Better “Green” Your Healthcare Organization
Who would have thought that a forty year old song by Kermit the Frog of Muppets fame, “Bein’ Green” would be so relevant to the healthcare supply chain? But given the fast pace of the healthcare supply chain and the thousands of options that your customers get to choose from in their products, services, and technologies it’s easy to understand why this is still an ongoing challenge for healthcare organizations going “Green”. Just adopting the “Green” philosophy and practices is a major
challenge, let alone making it all happen in a cost-effective manner.
The major issue that we fight against in the healthcare world is the balance between convenience and cost when it relates to “Green” products. Our clinicians want to use a product, throw it in the trash bin and forget it. They don’t want to remember to take a reusable product, use it and then throw it in a special bin for reprocessing. Not to mention the thought that the product has been used before on other patients. That just does not sit right with them. This is outside the norm for our clinician staffs and they would prefer to just take the straight and easy path.
Value Analysis Green Teams
With that mindset and internal inertia with so many products, how do we advance “Green” strategies while maintaining quality and reducing/maintaining costs? Here’s four ideas that might help with this transformation:
1. Start with an Easy Win-Win Pilot
–Before you propose a “Green” program for your organization, identify easy win-win projects that would make sense as a pilot with your current value analysis committee/team. They then have already done all the leg work and will know ahead of time what all the options are and what the recommended outcomes will be; e.g., “Identify easy win-win projects reprocessing Harmonic Scalpels can save that would make sense as a pilot up to 35%. There are plenty of cohort peer with your current value analysis benchmarks to show that this is a best committee or team” practice and will not jeopardize quality. These pilots will give you the opportunity to go through an actual “Green” project and then provide you with a learning curve on what is involved with this process.
2.
Gaining Management Commitment –It is always best to get your senior management behind your “Green” initiatives because you, most certainly, will be facing opposition from your clinicians, department heads and managers while making change happen. You are going to be asking them to take products that are working perfectly with no issues and requesting them to change to alternative “Green” products that may or may not create issues. Of course, they are going to challenge you. You will need to sell your management on “Greening” your organization. I’m reminded of the case of one of our community hospital customers, whose President happened to be sitting in on a VA Steering Committee meeting when the subject of “Green” products came up. He asked all the right tough questions and made the decision saying, “We will be a “Green” hospital.” I am not saying this will happen so easily for you, but you will need to convince your senior level management of all the positive aspects of a “Green” program in order to gain their support.
Value Analysis Green Teams
3.
Set Goals –the old adage, “How do you know where you are going if you don’t plot a course on a map?”, applies to any major initiative and “Green” programs are no different. What is your savings goal for your “Green” program? What are your quality goals? How are you going to monitor and track your goals now and over the long term? Work with your senior management and “Green” team members to develop your goals, year by year, to ensure that you have a fresh set of goals working from the start of your program and for many years to come. There is nothing more energizing for any team than setting goals and then meeting them!
4.
Learn from the Best –Plan to train your teams in “Green” strategies but don’t assume, as we do in the supply chain world, that they will understand what they are going to be asked to do. Plus, you will need to put all of your “Green” team members on the same page with training. Look for an expert that you could hire for a half day program to educate your team members. It will be worth every dollar you spend to make sure that your team has a good foundation to spring forward.
“Green” strategies are here to stay, so look to engage your value analysis teams in this new “Green” world just as you would any other cost reduction or capital procurement process. We have worked with dozens of healthcare organizations who have had “Green” initiatives and have seen the value in these undertakings. So, it might not be easy going “Green”, but the benefits far outweigh the negatives.
Databases to Uncover Your Price, Standardization and Utilization Savings Opportunities?
Why Do You Need to Employ the Utilizer® Dashboard?
Stop Hidden Utilization from Wearing Away Your Bottom Line Effortlessly Manage, Attack and Control Over 285 of Your Major Product Categories
Stop Waste and Inefficient Use
Make Your Job Easier
Spend Less Time on VA Studies Utilizer® Dashboard is Your Next Generation Savings Tool
“The Utilizer® is quickly becoming one of our most powerful tools in these difficult economic times. It has not only been able to show us where we have been, but it is also pointing the direction of where we need to go in order to remain competitive and viable in what are sure to be challenging times ahead. Is it possible you could do the same?”
Bill McFarland, Senior Director, Materials Management,
