Strategic Value Analysis Planning must take root

But why is it more important now than ever before? by Robert T. Yokl, President and Chief Value Strategist, SVAH Solutions


hen my fi rm’s executives speak at value analysis conferences on strategic value analysis planning

(SVAP) we usually fi nd that 65 percent of the attendees are new to value analysis and the remaining attendees have been in this new supply chain discipline for about seven years. That’s why strategic value analysis plan-

ning is more important than ever before. First and foremost, it’s mission-critical for new VA practitioners who need a roadmap if their value analysis program is going to be successful. Second, it’s for VA veterans who need to refresh, refi ne and refocus their VA program annually on the right things. Consequently, there is no substitute for strategic value analysis planning in your value analysis toolbox!

5 key SVAP benefi ts For those who doubt the benefits of an SVAP, let me elaborate on them with these fi ve benefi ts: 1. Helps you plan for new VA challenges and roadblocks: As an example, if you aren’t getting enough physician’s participation this needs to be discussed and improved in a brainstorming session. Or else, this and other issues will fester and then hold back your VA success.

2. Enables you to be proactive, as opposed to reactive: First off , you need to align your SVAP with your healthcare organization’s annual strategic plan, so you are in step with your senior management’s goals and objec- tives. This helps you to be proactive versus reactive to the changes in your organization’s future.

3. Gives you a sense of direction versus drift- ing: Too often, value analysis practitioners “wing it” with their value analysis program instead of carefully planning its direction. An example of not winging it would be plan- ning to focus in FY 2018-2019 on utilization management as well as standardization and price reductions.

4. Increases your chances of VA success: Thomas Carlyle once said that, “Nothing is more terrible than activity without planning,” because it can lead to disastrous mistakes.


Like forgetting to communicate with stake- holders, eliminating VA training or creating a VA structure that is too complex.

5. Boosts your operational effi ciency and pro- ductivity: Revisit problems and opportunities that raise their head during the year. Fine-tune your VA policies, procedures and processes to make them hum like a fi ne watch. You have heard that an army wouldn’t

go into battle without a plan that is highly organized, rational and fl exible. So why would it be any different with a value analysis plan whose team leaders and team members are also dealing with millions of dollars and thousands of lives that their actions touch in any given year?

5 important SVAP basics During the last 25 years, SVAH has fa- cilitated strategic value analysis plans for hospitals, systems and IDNs of all types (e.g., rural, urban and university teaching). In doing so, we have identifi ed the follow- ing fi ve important elements of an SVAP that needs to be addressed if your SVAP is to be successful: 1. Planning is never-ending: Things change, and people change continually at your health- care organization, therefore, you must have an anchor for your VA program that can act as a mission critical document that can adjust to your changing environment.

2. Let your savings opportunities drive your plan: Too often, hospitals, systems and IDNs establish value analysis teams (e.g., respira- tory therapy, cardiology, radiology imaging)

indiscriminately, and those teams quickly run out of work. We have discovered, after benchmarking, that we need to create value analysis teams where the actual savings reside. Otherwise, you are wasting time and resources unnecessarily.

3. Incorporate into your SVAP how you’re going to get better: For instance, one of our clients has an annual refresher VA training program for their value analysis teams pro- vided by diff erent consultants to keep their skills sharp.

4. Make sure you look in the mirror to see what’s working and not working: Is your meeting attendance below 80 percent? Are your VA project managers taking too long with their VA studies? Are you making your saving goals? These are the questions that need to be asked, answered and resolved with your SVAP.

5. Make sure your VA systems are working as designed: Be sure to cover any breakdowns in your VA systems in your SVAP that have surfaced, such as your VA meeting bogged down with too many GPO new and renewal contracts to get anything else accomplished. A remedy for this problem needs to be discussed and planned.

Planning is an essential supply chain manage- ment function that can’t be ignored if you want to improve your value analysis program’s per- formance every year. So don’t forget to consider these ideas for improving your VA program in your next SVAP. It could mean the diff erence between a just good versus great value analysis program. HPN

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