Savings Beyond Price™
Innovative Supply Savings and Quality Solutions That Work
by Strategic Value Analysis® in Healthcare
Did You Know...?
That Value Analysis Was Developed Back In the 1940's After World War II as a Way to Find Lower Cost but Higher Quality Alternative products and methods. This was Due to the Lack of Material Resources At The End of The War.
Savings Beyond Price -Weekly eNewsletter - July 21, 2010
Robert T. Yokl
President & Chief Value Strategist
Optimize Your Data for Results
Greetings,
We in the supply chain have literally billions of bits of data at our disposal to control, command, and optimize in order to make our savings efforts more effective, precise and targeted. Yet, most of us sit on the sidelines waiting for this predictive and actionable data to appear from out of nowhere and give us all the right answers to our questions.
It is only true that you can get all the right answers to your questions if you optimize your data for results. By optimize I mean that you need to design your data points to be meaningful, visible and actionable, not just high level benchmarks. For example, just having a benchmark that shows your supply expense to revenue ratio is 2% higher than your peers won’t give you a track to follow to uncover why this is happening. This metric just tells you that you are beyond acceptable limits in your supply expenses. You will need to dig deeper and broader into your supply chain to find the answer to why this is happening.
That’s where Activity-Based Costing comes into play. To know with certainty where your supply expense variances are occurring you will need to link an applicable activity (patient days, procedures, tests, square footage, FTEs, etc.) to your commodity groups (IV sets, custom packs, office supplies, maintenance supplies, food, etc.) to actually measure your products, services and technologies velocity, intensity and frequency utilized over time.
I just performed this same exercise with a new client of ours whose urological expense has jumped 46% over the last five quarters. There is no question that this client needs to investigate why this is happening. Do you see what I mean about optimizing your data so you can have meaningful, visible and actionable results, not just high level benchmarks?
There is no healthcare organization whom we have worked with who doesn’t have the data or ability to track, trend, analyze and visualize all of their purchases utilized over time, if they would only start to collect, organize, catalog and optimize their data to do so. Isn’t it time in our new healthcare economy for you too to optimize your data for results?
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. If this topic intrigues you, you might want to read my recent article, “The Importance of Demand Management”, from our library of 400+ articles to get even more insight into this emerging best practices.
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