Strategic Value Analysis In Healthcare

It is clear to see in the healthcare world that Value Analysis is here to stay, yet there is no clear cut "Complete HOW TO" system that you can rely on in order to bring your organization to the next level of supply chain savings. More and more organizations are hiring full time staff totally dedicated to Value Analysis to attack the "SAVINGS BEYOND PRICE" that is the next level of major savings opportunities for Healthcare Organizations.

Message from the Author

"There is NO Supply Value Analysis System Like This In The Healthcare Industry or Any Industry!"

My name is Robert T. Yokl, President & CEO of SVAH, and I am the author of the award winning system* --"The ULTIMATE VALUE ANALYSIS SYSTEM"--which will show you, step by step, how to plan, organize, manage and attain superior savings in less time with greater success! I GUARANTEE to help you save more in less time OR I WILL GIVE YOU YOUR MONEY BACK!

Why is This Program More Important Than Ever Before?

I recently had the experience to sit with one of my customers who had us audit their entire supply chain to give them more fuel for their Now in my 20th year as a healthcare supply chain and value analysis consultant and trainer (30 years in the healthcare business). Having learned a great deal about Value Analysis In Healthcare and have developed my quick and easy system that will enable you to avoid all the roadblocks, pitfalls and obstacles that come from developing a program yourself. I have trained hundreds of hospitals and healthcare systems the practical and easy to use system of Value Analysis that I am offering here today.

*Crozer Keystone Health System and Hoag Hospital won the VHA Leadership Award by employing this system!

"The Ultimate Value Analysis System is not only a good read, but is a "money-saving" system that supply chain professionals have been looking for to re-invent their value analysis programs. It's a new way of organizing, training, managing and deploying value teams to obtain the best results -- in the shortest possible time."

Steve Carlson-VP Administration-St. Luke's Hospital and Health Network, Bethlehem, Pennsylvania

"SVAH's Ultimate Value Analysis is an outstanding resource for any Healthcare organization attempting to manage its supply chain costs. It provides a concise "how to process" that will immediately energize your organization, and increase communication inter-departmentally. The book and training has effectively helped our Health System develop an internal resource of objectively trained, insightful, Value Teams that systematically review our consumption of products and services. Beyond the cost savings results the book has helped us as an organization achieve results quickly and independently."

Perry Miller-Director Materials Mgt. and Value Analysis, Presbyterian Medical Center, University of Pennsylvania Health System

Are our conservative mindsets costing us big time?

Case in Point! I recently had the experience of working with a major university teaching hospital client that had established their own home grown supply savings program (they called the team a value analysis team), but were only achieving meager results ($350,000 per year on an annual spend of $30 million). Their CFO asked us to give him a second opinion! It turned out that our client was too focused on their GPO Contracts, renewals and rebates and weren’t performing value analysis at all. However, within 30-days we delivered our assessment that showed our client $2.2 million in new utilization savings opportunities that re-energized their supply savings program and focused them on the right things. You would think I should feel good about this -- right?

Here’s the rest of the story! This 270-bed teaching hospital’s value analysis coordinator was very diligent and in only 7-months implemented $1 million of our 89 recommendations. Yet, I wondered why more savings hadn’t been achieved. So, after further review we found that one of the largest savings -- IV Administration Sets -- only showed an $111,087 or 20% in implemented savings out of $500,000 savings opportunity that we identified in our analysis. How could these dollars be left on the table -- untouched?

We found that our client was the victim of an all to common difficulty we called “over- standardization”. This was caused by standardizing on one primary IV administration set house-wide which was costing them $8.56 per set or $800,000 per year. They over-specifying their primary IV set that was functionally specified for the Anesthesiologists in the OR but were using it house wide! Even worse, we pointed out that they weren’t buying any secondary IV administration sets at all, which meant that when a medical need arose for additional functionality (ports, etc.), their clinicians would only have the $8.56 primary IV administration set to choose from, instead of the secondary IV set which only cost $2.50 to $3.50 (or a 60% to 70% up charge every time they used a primary set as a secondary).

Oh, this story only gets better! Now our client’s value analysis coordinator had already had a meeting with the manufacturer and the rep offering to give our client all of the secondary IV sets and in-servicing for free if the coordinator would leave $8.56 primary IV set in place, easy savings right? This was a smart sales representative. He would give our client $111,087 in IV sets to save $550,000 worth of business and the nurses will probably still grab the expensive primary IV set anyway and erode the $111,087 savings over time. $438,913 in savings left on the table!

What is Called "Value Analysis" is Not Value Analysis at All!

Their System Was Not Detailed and Effective: This client is a highly effective, quality oriented organization that has developed their own approach to supply cost management, but they chose to employ the old and ineffective product evaluation model to chase after their savings opportunities. In the example above they saved 12% on one product, “good enough right?” However, they didn’t know what they didn’t’ know that they were already spending 61% too much! I think one fundamental question to ask ourselves here is: Are we really “Wringing the Towel Dry” on supply expenses? The answer: No!

The Bottom Line! Unfortunately, healthcare organizations like our client in the example above, fall into the category that we call “not invented here”. Whereby, they feel that they have “been there, done that” on just about everything there is in the supply chain world. And, have stopped looking for new and better ways to save more effectively. Are our conservative mindsets costing us big time?