HC Value Analysis and Utilization Management Magazine_Volume 11 Issue 2

The Secret Formula for Substitutions

It’s my understanding that supply chain shortages are still a big problem in healthcare due to the effects of the pandemic. Further, we are hearing from our community that substitutes are now one of the prime responsibilities of value analysis professionals to come up with acceptable alternatives on the run to fix these shortages. We have found that the best way to address this challenge is with value analysis. For you see, the reason value analysis was created by Larry Miles was due to shortages during World War II.

At the time, Miles worked for General Electric (known as GE today) and was given the responsibility to find substitutes for materials that were being rationed (metal, paper, rubber, etc.) during the war, but were needed by General Electric for domestic consumption. That’s when Miles came up with the technique of value analysis or functional analysis. By definition, VA is the study of function and the search for equal or better lower cost alternatives or substitutions. That’s why I call value analysis the secret formula for substitutions!

Function (or what a product, service, or technology does) in the classic value analytics model is defined with an active verb and measurable noun. For example, the primary function of a paper towel is to “dry hands.” It also has secondary functions, such as to clean spills, wipe windows, cover shelves, etc., and aesthetic functions (size, color, length, width, etc.) which may or may not be needed to meet your customer’s exact requirements.

Based on the above specifications, you can now brainstorm individually or with your value analysis team to search for equal or better alternatives or substitutions for hand towels. Some substitution ideas could be a cloth towel, hand dryer, liquid hand sanitizer, etc. Once your brainstorming session is over, you can then select the best lower cost alternative that meets all of your customer’ s requirements. In this case, I believe cloth towels will meet all of the functional requirements outlined in the specifications that were developed in our functional analysis phase.

Although this substitution formula example is simplistic, you can apply the value analysis alternative selection process to just about any product, service, or technology you are now buying. Try it and I can assure you that you will be surprised how many alternatives you will devise and how many secondary and aesthetic functions you can do away with that aren’t absolutely necessary.

It’s 2023 - How Do You Make Your Clinical Value Analysis Program

Even Better?

As we begin a new year, it is good to take a step back and take a good look in the mirror at your value analysis and cost management programs. These are especially important right now in these tough economic times where your Chief Financial Officer is looking for every dollar of revenue and savings they can muster. Plus, it is just a good time to improve the things that need to be improved and make your value analysis program more efficient, time savvy, and get better results than you have in the past.

How Do You Step Back and Look at Your Program in the Mirror?

What is the optimal way to truly look at your value analysis program with all of the moving parts, teams, people, contracts, recalls, products, and much more? The best practice I always go back to is to perform a SWOT analysis (figure 1) to help evaluate your strengths, weaknesses, opportunities, and threats in your programs. This will give you the facts or evidence to document what you are doing now which will then allow you to plan for the future.

Leave the Egos at the Door and Be Honest with Your Approach

Remember, a SWOT analysis only works if you are honest with yourself and your organization while you go through this process. This is not the time to sugar coat anything as it will not do any good to say that your program is perfect and that you can’t do anything better because you are the best already. I have been a value analysis practitioner for over 30+ years and have never come across a program that cannot be improved in some or many areas.

Create a Value Analysis Strategic Plan

With all of this great information in hand, you can now shape the program that you want to see for 2023 and beyond. I would suggest that you work with your Supply Chain Director and CFO to set some solid goals and objectives based on your SWOT analysis. This can be done in the form of a slide deck to make the visuals flow for each category. I recommend the following: Team Goals (save $3 million next year), People Goals (80% attendance), Time Objectives (limit meetings to 60 minutes, only agenda items with all required data/reports shall be discussed, etc.), and Advanced Objectives (deploy a clinical supply utilization program). Of course, there will be much more for each category of goal or objective, but I think you get the idea.

Above are just some great best practices that will no doubt help you with improving your value analysis and cost management efforts moving forward and help break you out of the endless rut of doing the same things over and over again while getting the same or similar results. If you are looking for newer and more advanced strategies then you have to work them into your value analysis program, and these are great ways to help you make this happen. Lastly, this will help you check the boxes for all those next level advanced results that your director, your VP, and your CFO believe you should be delivering.

If Supply/Value

Chain

Excellence is Your Top Priority: You Need to Know Where You Stand

We often assume that our supply chain division, department, or unit is performing at the highest performance levels, but are we really sure? From our experience, we can only be absolutely sure by employing key performance indicators (KPI) to:

1. MonitorYourFinancialSuccess: Are we meeting our savings, budget, and long-range goals? For instance, one of your financial KPIs to determine your financial success could be the annual supply savings/annual supply budget = net savings. We have found that this is a much better measurement for your financial success than savings per contract or initiative, since “net savings” represents what savings really hit your healthcare organization’s bottom line each year.

2. Measure Progress Along The Way: Just the other day, one of our clients asked us to establish a new KPI to ensure that a new freight management company they contract with meets its savings commitment to them. Otherwise, how would they know if the savings milestones that were represented in their vendor’ s proposal were achieved?

3. Analyze Patterns Over Time: We just observed a pattern in which one of our client’s instrument repair cost KPIs jumped by 49% or $225,000 in the last calendar year. Naturally, we recommended that our client investigate this change in their instrument repair pattern that has been constant for years.

4. Make Mid-Course Adjustments: How many times have you been promised savings by your GPO or vendors that never happened? Well, too often this is caused by internal operational oversights such as not training medical staff in the use of a new product, service, or technology. The good news is that these issues can be corrected by establishing KPIs that monitor that these savings are happening as planned. This happened when a hospital client of ours was given higher contrast media doses than medically required and squandered the savings that was projected at the start of the new contrast media contract. However, once this problem was detected and corrected the projected savings started flowing again.

As we mentioned in our introduction to this article, it is almost impossible to know how you are doing operationally without having key performance indicators to direct you to areas of improvement or to validate what areas you are best-in-class in. So, if excellence is your priority you need to know where you stand to ensure you are filling your supply chain mission at the highest service and operational levels possible.

Duvera Solutions Group

Driving Out Waste and Inefficient Use with Value Analysis

Big Savings and Quality Improvements with Inflatable Patient Positioning and Transfer Devices

It is amazing how value analysis works as a great tool and process to drive positive change in our healthcare organizations. This case study was first presented at AHVAP’ s 2022 Annual Conference as a best practice which got great feedback from the AHVAP VA community and was shared on LinkedIn to help spread the educational points further. That is where Healthcare Value Analysis & Utilization Management Magazine reached out to me to ask me to write an article about this best practice to share with the entire supply chain world. There are many take-aways from this article as well as value analysis and utilization challenges that are addressed here.

Inflatable Patient Positioning Devices - BayCare Health System, Clearwater Florida – Value Analysis Department

Like so many value analysis departments, we handle the efficacy and value reviews on new product requests (NPRs) for BayCare Health System. One major project that went through our VA process in 2017 was inflatable positioning/transfer devices. The primary function of the devices was to reduce a major issue going on in the health system which was back injuries to the clinical team members during patient positioning events. The secondary function we identified was to position the patients and reduce sacral pressure injuries, reduce shearing, and offload pressure on patients. Given the fact that an injury to clinical colleagues is a very serious issue and knowing there was a better way to ensure that patients are positioned properly, we set to the task.

The value analysis team set the target scope for the use of this product and the need for the use and the optimal outcomes that we were looking to achieve during the review and efficacy value analysis process. The new systems were trialed and deployed but there did not seem to be any change in the outcomes with clinical team injuries or with patients having improper positioning issues. However, we did see the costs skyrocket on these products.

Featured Article Shaneka Demps

Retrospective Value Analysis Reviews are Necessary Components to Have in Your Toolbox

Given that the cost of these inflatable positioning/transfer devices had climbed to over $5.2 million after two years of use, things clearly had gone awry with the utilization of these devices and the value analysis department was now tasked to address it. It just goes to show that you can do everything right in your value analysis process, but it is the end clinical customers who use these products and that is where challenges occur. The issue was that the costs were climbing exponentially but there was little or no reduction in clinical team or patient positioning issues. A retrospective value analysis review was required by the value analysis team.

Winning Value Analysis Steps to Save 64% or $3.4 Million Annually

We were a bit taken aback by the amount of overspend that had occurred on a value analysis project, although since this is a big system, overspend tends to be higher than most which is why there is a value analysis department to address these very issues. These products continued to be used while the value analysis review was performed which allowed the value analysis team to analyze the use patterns and outcomes of the products much better than we had with a new product request back in 2017.

Gained C-Suite Support and Engagement – The product was used system-wide, and many clinical staff really liked using this product, which necessitated the support of senior leadership as this project could have easily been shut down. Given the dollar figure of waste, it was most important to have executive leadership’s backing.

Knowing the Eye-Opening Facts – We needed to know how effective the current product mix was with relation to clinical injuries as well as patient positioning issues within the health system. Interestingly, it was found that the current patient transfer devices did not perform as originally intended.

Engaging Wound Care Clinicians and Nurse Leaders – When we did the first value analysis review on the inflatable transfer devices when they were new product requests, we were not as astute as we are today with regard to decubitus care at the patient bedside. We identified the correct patient population and developed an action plan for use of these devices.

Featured Article

Shaneka Demps

Educated the Key Clinical Staff – Hospital nursing units are unique in that each shift holds a quick huddle to go over safety measures, important protocols, and alike every day that are key to optimal patient outcomes. The VA team set up the huddles on the nursing units for success by providing them with new criteria and preferred alternative tools for patient transfer.

Supply Chain Participation was Vital – Once we knew what we were dealing with, the supply chain department jumped into action and adjusted par levels on lower-level units to zero on units that should not be using patient transfer devices at all. They then centralized the product location so they would be available with approval only or emergency use. Only ICU units were able to have a small supply of the patient transfer devices on hand.

Game-Changing Results with This Value Analysis Review

As a result of this value analysis review, the health system was able to save $3.4 million on a previous $5.29 million spend for a 64% annual savings which was huge. The bottom line here was that the patient positioning devices were significantly and inappropriately being over utilized. They were not reducing clinical team injuries nor were there any measurable patient improvements with the use of the devices. It took a retrospective value analysis review to uncover these cost, quality, and outcome game changers.

This Was a Team Win for Value Analysis

I am very proud of our team who worked on this value analysis review which included Ronald Colaguori and Rich Frankenfield in our Executive Leadership Team that trusted the VA process to make this successfully happen. We could not have done this work without the assistance of our Senior Analyst, Mark Warden, and his impeccable data throughout this project. Lastly, thank you to Rosaline Parsons, RN, for instilling it all.

This was a study that had every element of value analysis, functional analysis, and outcomes review that helped the health system to achieve so much. BayCare now has $3.4 million added back to their bottom line and a lot less waste of inflatable patient device products and associated products that are used with them. Tons of landfill waste was avoided in this process. Lastly, the BayCare team members saved time by not having to inventory and coordinate so many products throughout the health system. Everyone wins with this one!

AboutBayCare

BayCare is a leading not-for-profit health care system that connects individuals and families to a wide range of services at 15 hospitals and hundreds of other convenient locations throughout the Tampa Bay and central Florida regions. Inpatient and outpatient services include acute care, primary care, imaging, laboratory, behavioral health, home care, and wellness. Its mission is to improve the health of all it serves through community-owned health care services that set the standard for high-quality, compassionate care. For more information visit BayCare.org.

Value Analysis Recall Advisor

Laying a Strong Foundation for Your Recall Management Program

In this edition, let’s explore what is needed to create a successful recall management program for any healthcare facility.

The Role of Executive Leadership in a Recall Management Program

Like any other program, we strive for compliance, positive outcomes, and sustainability, which means that the importance of efficient recall and alert management needs to become embedded in the culture of the organization. The only way this occurs is if the concept is embraced and supported by the executive leadership. This will ensure awareness of this process and promote recall and alert management as a patient safety initiative for the organization, bringing patient safety and risk management staff into the process. Executive oversight should promote accountability for outcomes, and they should serve as the review board when escalation is required.

Some organizations, especially larger ones, may also find it necessary to also designate another group of clinical leaders to serve on a Safety Alert Response Team. The purpose of this group is to mobilize the organization in the event of a critical alert that poses a threat to patient or staff safety, providing a network of individuals that can act immediately to identify and remove any products that pose such a threat. They can also develop a plan of what needs to be done should a replacement product be needed to ensure the continuity of care to patients.

Who Owns the Recall Management Process?

Once leadership has embraced the importance of recall and alert management, a structure for the process must be defined. This will largely depend on the size and resources of the organization. On the supplier side of the recall notification process, recalls are usually managed by a post-market team, not the sales team that value analysis professionals and supply chain staff normally interact with. This post-market team relies on the “ship to” data that they have for an organization when determining who receives the recall or alert notification. This means that one organization may receive multiple alerts, each one going to one of its “ship to” locations, which may or may not include the supply chain/materials management department. This can make managing these notifications a very daunting task.

Value Analysis Recall Advisor Tracey

The Role that Value Analysis or Supply Chain Can Play in Recall Management

A centralized structure would have one person or department as the designated “ owner” of the process, with all notifications being funneled to them. This designee would be responsible for triaging the notification and coordinating all the activity involved with the recall or alert, including all communications with the suppliers. Effected departments may still be asked to assist with identifying products and completing any remediation required, but all actions would be reported back to this designee. This structure would also ensure that all areas within the organization that might be affected can be alerted to the recall, even if they did not receive the notification directly from the supplier. Some organizations have added this responsibility to someone in supply chain or value analysis. Others have created the position of “Recall Coordinator” to meet this need.

Do You Have to Work in Supply Chain or Value Analysis to Handle Recall Alerts?

An alternative structure to this would be a decentralized process, where each department or facility receiving an alert would provide their response directly back to the supplier. While this may appear more expedient on the surface, this approach has hidden dangers. By using a decentralized structure, the responsibility and accountability are also decentralized, making compliance more difficult to enforce and monitor, especially in larger organizations. It also allows for the chance for a notification to fall through the cracks if it is misdirected or forgotten about, especially if there is not a defined, consistent process that is followed by everyone in the organization. Delays in responding will result in additional alerts being sent out by the supplier, taking up more staff time as they determine what has already been processed and what is a new alert.

Why Documenting Your Process is Your Key to Recall Management Success

Regardless of the structure that is chosen, the importance of documenting the process cannot be overstated. The data needs to be readily accessible and transparent to validate that a process is being followed, actions are being taken, and alerts are resolved. This documentation also provides evidence of compliance for any regulatory agency such as The Joint Commission, DNV, or the FDA. It should be able to be downloaded to reports for internal safety or risk management committee meetings. Ideally, this would involve a central repository for the information that can be shared among all team members involved in this process and would offer visibility to the leadership as they provide oversight to this process.

Once you have a solid foundation for your recall management program, you can start to build out more of the structure, through a defined policy and process that support your program. In the next installment, we will discuss what that policy should address, and the supporting workflow needed to sustain a successful recall management program.

Value Analysis Recall Advisor

Tracey Chadwell has 30 years of clinical and supply chain experience driving clinical and operational performance improvement, demonstrating significant returns on investment through clinical utilization management of resources and operational cost savings. Her experience covers aspects of supply chain including data analytics, operational efficiencies, internal and external customer relations, GPOs and contracting, and consulting in these areas. Her experience in value analysis includes leading a program, developing or refining existing programs, and implementing millions of dollars in savings through various healthcare organizations. This included operational and clinical process improvement programs which contributed to cost savings in both labor and nonlabor expenses.

This year, Tracey started her own consulting enterprise, TACH Consulting. Prior to joining that, she worked as a senior director of the clinical advisory specialists for Intalere, serving as an SME and trusted advisor to their members, as well as providing consulting services in supply chain and value analysis. In addition to her 10 plus years as a bedside nurse and manager, she has also worked as a consultant for value analysis and service-line analytics for two large GPOs.

Tracey has also been active with state healthcare organizations in all classes of trade, providing educational presentations and advisory services. She has appeared on several podcasts, such as Power Supply and The ASC Podcast as well as several industry blogs. She is a member of the Association for Healthcare Resource and Materials Management (AHRMM) and the Association of Value Analysis Professionals (AHVAP).

Your Purchase Costs Are Only the Tip of the Iceberg

We all understand the concept of an iceberg that has three-quarters of its mass submerged under the waterline. Well, this same concept can be applied to value analysis since it too represents three-quarters of the savings available to your healthcare organization under the waterline. These unwanted and unneeded costs are represented by five categories of supply chain savings as follows:

1. Non-Conforming (Over-Specified or Underspecified) Products, Services, and Technologies: A 100-bed hospital standardized on a stapler gun with a unique feature (articulating arm) for abdominal surgery that a value analysis team confirmed wasn’t needed for all surgeries. This hospital saved $32,000 (26%) annually when the practice was changed to only using this specialized stapler gun when it was medically required, not for every abdominal surgical case.

2. Feature-Rich Products, Services, and Technologies: Your customers don’t need everything (i.e., aesthetic functions – nice to have, but not medically required) they are requesting

Value Analysis 101 Robert T. Yokl

for their products, services, and technologies. For example, standardizing your pacemaker features for all your cardiac patients instead of customizing (planning ahead on what customers actually require) their features. Customizing can save, on average, 48% on your most common pacemakers. This concept is best visualized with a standard normal distribution graph (figure 1) which shows that the normal distribution pattern of your pacemaker purchases should slope on both sides of the scale as opposed to following a straight line if your pacemaker features are customized vs. standardized.

3. Wasteful and Inefficient Methods and Practices: Every healthcare organization has embedded methods and practices that are wasteful or inefficient because things change and people change in any given year. For instance, a 500-bed university teaching hospital we worked with was spending $382,000 more in IV sets annually because every time one of their 12-year-old IV pumps alarmed the nurses change the IV set, when the real problem was that the hospital needed to buy new pumps.

4. Value Mismatches (Lower Cost Alternatives Available): The true essence of value analysis (Cost/Function = Best Value) is to determine the most appropriate products, services, or technologies for their intended purpose. Why buy patient slippers at a cost of $3.66 when a $1.29 pair meets your customers’ requirements exactly, or use a silver catheter when an off-the-shelf catheter will suffice?

5. Utilization Misalignments (Wasteful Consumption, Misuse, and Misapplication of Products, Services, and Technologies): There can be many reasons why your healthcare organization has utilization misalignments. The most common reason is that your hospital, system, or IDN is not embracing the use of key performance indicators to track, trend, and then compare your healthcare organization’s practices with your peer cohort. Like a 150-bed community hospital that saved $52,000 annually by discovering that the community standard was to draw the exact amount of contrast media needed for the patient CT/MRI with the injection syringe and only use prefilled syringes later in the day. This eliminated waste because larger containers opened later in the day could expire.

Envision every category of supply and purchased services having their own key performance indicators so that you will know where you stand on every one. This way you can focus your attention on the areas that need attention and maintain/sustain the areas where you are a best practice.

As we have described above, savings beyond price is an art and science that is best employed by using the technique of value analysis to study how your products, services, and technologies are employed once they are in the hands of your customers. This way you can attack your cost drivers below the waterline where your biggest cost savings reside.

A 150-bed community hospital saved $32,000 annually by discovering that the community standard was to only use a 100ml vial of contrast media vs. 150ml.

Utilization Management

Starting Your Own Clinical Supply Utilization Management Program

There is Power in Knowing Where You Stand on Every Category

I recently had a sales call with a hospital Director who was interested in starting a Clinical Supply Utilization Management (CSUM) program at his hospital. His reasons were that they had been doing as much as possible with GPO/contract price and standardization but that they were doing nothing about clinical supply utilization. Being new to the CSUM space, he thought that he could start small and benchmark something like the top 10-20 categories and go from there and asked if that was realistic. My answer was that I wish it was, but it wasn’t.

With our now over 20+ years of benchmarking hospitals, the answer to that question is that every hospital is different. Every category at every hospital is the same but they are all different in how they use them and how good they are with their clinical supply utilization of these categories. So, I could not just go in and benchmark 10-20 of what I felt were the top categories as it would have just been a guess. That is why our firm always benchmarks the entire organization (fiscal compare, cohort compare, historical compare, etc.) to truly see which categories need to be addressed and why. Understandably, I could not just benchmark the top 20 as they may have been good on just about all the top categories that I chose out of the over 700 major supply categories that a hospital purchases.

Utilization Management

Every Hospital’s Utilization is Unique but They Use the Same Products as Other Hospitals

Every hospital is different in how they consume products which is why in order to launch a Clinical Supply Utilization Management Program you need to first report out where you stand. Where you stand is defined by your cost per surgical case, cath lab case, adjusted patient day, etc., on everything from absorbent hygiene to wound care dressings and all 700 major product categories in-between. Out of all of those product categories you will find that your organization is more than likely at or near best practice levels on about 50% of the products you buy. That leaves the other 50% that could have major utilization issues that need to be addressed and marginal utilization misalignments that don’t require action but should be monitored. The key is, now you know - and that is so powerful!

It's 2023, Throw a Blanket Over Everything in Your CSUM Sphere

This is 2023, we have the technology and reporting to be able to throw a blanket over every product category that you purchase and marry them to operating metrics and continually track and benchmark them. Why do this? I may sound like a broken record here, but you will want to know where you stand on every category at any given time. CSUM is more an art and science than exacting measurements like unit price on a contract. There are the big X-Factors that are patient volumes and the quantity consumed on each category and the ebb and flow throughout each budget year.

Your CSUM reporting will tell you everything you need to know from where your low-hanging fruit is to your very difficult utilization challenges. For me, I like knowing where everything stands and then you can be strategic in how you want to address each area, such as finding a category savings as lowhanging fruit that I happen to have a new contract to deploy that I was uncertain about but now know is the right way to go. Another example is having a difficult product category that is a physician preference issue that I will pass along to my Surgical Value Analysis Team to find a solution to. I will send out charts and reports to various department heads on categories that I expect them to selfcorrect on or we will take further action on which they may lose control over the process. Most times, the departments do self-correct.

CSUM’s Time Is Now

If you “think you’re okay” when it comes to CSUM then you need to realize that you must know where you stand on every category today. It is mission critical to know where you stand on your pricing strategies, but you must know where you stand on your consumption/utilization levels as well. Remember, you can at best gain a 3% to 15% price savings on any category today but with utilization you can save as much as 25% to 67% because you are looking at the end total cost of use. Your CFO may not yet be asking you to report out these areas, but they soon will be and may be astonished that your strategy was based on gut feel or guessing. Why not look like a superstar and lead your organization to the next level of big savings that will keep you saving big for the next few years.

FINDING THE NEXT LEVEL OF BIG SAVINGS DOESN

T HAVE TO BE DIFFICULT WITH THE RIGHT SYSTEM TO DO THE HEAVY LIFTING FOR YOU!

LET

How Far We Have Strayed From the Classic Tenets of Value Analysis

Back to Basics - Forward to Savings That Will Stick

I just read a healthcare magazine article that claimed that the definition of value analysis is Quality/Cost = Value Analysis. Nothing could be further from the truth. Larry Miles, the Father of Value Analysis, defined value analysis mathematically as Function/Cost = Best Value, since value analysis is defined classically as the study of function and the search for lower cost alternatives. In fact, value analysis practitioners didn’t even talk about quality until the 1980s when Edward Deming’ s Total Quality Management theories started to take hold in Japan.

Value Analysis Can Fill Many Roles

Although VA can be extremely effective in the evaluation of new products, services, and technologies, discovering substitutions, and improving quality, it was designed to save money. For the best results, we recommend that you follow Miles’ six-step value analysis process as follows:

1. Understanding Phase: What is to be accomplished? What are our goals for this value analysis study? For example, studying the acceptability of a requested new surgeon’s glove could be a goal. Then, you would collect all information available about this surgeon’s glove (i.e., history, manufacturer data, third party data, user interviews, observations, etc.) to set the stage for your Investigative Phase.

2. Investigative Phase: In this VA phase, you define the primary (protect surgeons and patients), secondary (none), and aesthetic (size, color, tactile feel, strength and sensitivity, powdered, cuff, fit, comfort etc.) functions required (not desired) by your surgical staff to meet their requirements exactly.

3. Speculation Phase: In this step you would brainstorm to uncover a lower cost alternative (if any) for the surgeon’s gloves you have just specified. It could mean testing how sensitive the gloves need to be for the tactile feel or strength your staff prefers compared to different brands. This exercise could make a world of difference in your cost per pair and the quality of your gloves.

4. Analytical Phase: This is where you do the math, based on the alternatives you have chosen in your Speculation Phase, on what option is the best value (not best price) for your customers. In some cases, your best value product, service, or technology could be even higher priced than your comparables, but it meets your customers’ requirements exactly.

5. Planning Phase: In this phase you plan for the implementation of your newly chosen product, service, or technology. Do you need to have in-service education? Do you need to deplete your existing stock before ordering the new product? How are you going to communicate this change to the affected customers?

6. Execution Phase: This last phase is where you incorporate your Planning Phase into a check list for action. Then, you need to decide who is going to be responsible for the execution plan (nursing, supply chain, operating room, etc.) to introduce this new product, service, or technology into your hospital, system, or IDN.

It is easy to come up with your own version of value analysis, but much more cost effective if you employ the value analysis process (shown above) that has a 60-year history of reducing the lifecycle cost of a product, service, or technology without affecting its quality. Why reinvent the wheel when it has already been refined for you?

Value Analysis Teams Make a Difference

It was recently brought to my attention that every hospital doesn’t have a value analysis team or committee to manage and control their products, services, and technologies from conception to disposition. Since 96% of the life cycle cost of a product, service, or technology is incurred after the purchase, any hospital that doesn’t have a value analysis team to control these costs is losing hundreds of thousands of dollars annually in waste and inefficiencies in their supply streams.

That’s why value analysis teams make the difference at every size healthcare organization. In fact, we have uncovered over 1 million dollars in utilization misalignments in hospitals as small as 25 beds. So, if you don’t have a value analysis team in place at your healthcare organization, it is time to establish one just to fill the hole in your bucket that is losing thousands of dollars as you are reading this article.