BACK TALK
Value Analysis requires adopting a system approach
A repeatable, scientifi c, trainable and auditable system drives long-term success by Robert T. Yokl
have observed, trained or facilitated hundreds of value analysis teams over the last three decades and have come to the conclusion that the most successful value analysis teams that I have witnessed have had a repeatable, scientifi c, trainable and auditable system to ensure their long- term value analysis success. These are the VA teams that are cohesive, cooperative, fun to watch, and have double-digit sav- ings to report to their management each and every year.
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Exception Unfortunately, these highly systematized value analysis programs I just described were the exception to the general rule. My usual value analysis team meeting experi- ence was to see a group of hospital, system or integrated delivery network department heads and managers passing around a new product offering and then asking their team leader what were the features, benefi ts and price of the new product.
To my consternation, what I was observ- ing wasn’t value analysis at all, but what I like to call price or comparison shopping. If you aren’t aware of it, the classic defi nition of value analysis coined by the father of value analysis, Larry Miles, is “Value analy- sis is the study of function and the search for lower cost alternatives.” Now that you know the defi nition of value analysis, do the VA meetings that I just described seem like value analysis to you?
Repeatable More importantly, each value analysis study I observed was handled differently from project to project. Meaning, there was no consistent or repeatable system for these healthcare organizations’ value analysis project managers to follow. Remember, to be successful in value analysis you need to have a reliable and re- peatable VA system, or your value analysis
team members will design their own value analysis system that I promise you won’t be scientifi c and will not provide you with the outcomes your healthcare organization is depending on. For instance, I once observed a value analysis project manager, who was assigned a lab product study, spend a whole month visiting other hospitals’ labs to collect data on her project. The only problem with the VA system that she devised was that no hospital visits where required to complete her study. This is how out of control a VA project can get if you let your VA project managers design their own VA systems. Don’t let this happen to your VA team.
Scientifi c The “scientific method” devised in the 17th
century starts by defi ning a problem, then observing, measuring and gathering relevant data to solve the problem at hand. With this fact in mind, much too often, value analysis teams list on their agendas new products, services or technologies for evaluation in which there is no exist- ing problem (e.g., cost, quality or safety) identifi ed. So why are these “problem-free” products, services or technologies on your VA agendas? Henceforth, if there isn’t an existing cost, quality or safety problem with an existing product, service or technology it shouldn’t be on your VA agenda. This new VA technique will save you time and money.
Trainable
If you, for instance, have a six-step value analysis system as my fi rm does, you can train your value analysis team members in your own VA system. They then should be required to employ it every time they are evaluating a new product, service or tech- nology. This then enables all of your team members to speak the same language and be on the same page with every value analysis study. Sometimes, value analysis training is negated or denied because it costs a few
56 May 2016 • HEALTHCARE PURCHASING NEWS •
hpnonline.com
Robert T. Yokl is president and chief value strate- gist of Strategic Value Analysis In Healthcare, which is the leading healthcare authority in utilization management. Yokl has nearly four decades of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the new Utilizer Dashboard that moves beyond price for even deeper and broader utilization savings. For more information, visit
www.svahsolutions.com. For questions or com- ments, email Yokl at
bobpres@strategicva.com.
hundred dollars. Just think, however, what the cost of not training your value analysis team members is costing you when these people approve or disapprove millions of dollars of products, services or technologies for your healthcare organization annually.
Auditable
It is mission-critical that you audit your val- ue analysis studies after they are completed by your project managers to ensure that your project manager followed your value analy- sis system to the letter. This is because we have seen hundreds of thousands of dollars left on the table due to VA project managers taking short cuts. Also, if you fi nd that your VA project manager didn’t follow your VA system exactly, you can retrain them in any area you found defi cient. You can’t do this if your VA project manager is “winging it” with their own VA system.
Authentic Value analysis can look easy at fi rst glance, but it really needs to be a repeatable, scien- tifi c, trainable and auditable system to truly be effi cient, effective and have long-lasting success. So if your value analysis program doesn’t have these winning attributes I just talked about it’s never too late to refi ne, redesign or reinvent your VA program to be more than just checking off a box that you have a value analysis program at your healthcare organization. HPN
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