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 - December 14th, 2010
Robert T. Yokl
President & Chief Value Strategist
Product Selection/Evaluation Basics
Greetings,
One thing that all supply chain departments have in common is their evaluation and selection of products. In fact, this is a core function of any and all small, medium and large supply chain operations. Yet, every single healthcare organization that I have observed has a dissimilar methodology for determining the right product, with the right functions, at the right total cost for their hospital, system or IDN.
Unsurprisingly, this diversity in product evaluation and selection is so broad that the maximum product match between hospitals that we have worked with over the last 24 years is about 18%. The implication you can derive from this statistic is that healthcare organizations buy different products to perform the same functions 92% of the time. How does this happen?
In the perfect world all hospitals would be buying the lowest total cost functional products (e.g. catheters, pacemakers, dressings, etc.) for their intended purpose based on unbiased, scientific and evidence-based criteria. However, this doesn’t appear to be happening, based on our extensive research, or hospitals would be universally buying the same products from the same manufacturers consistently.
The only conclusion that I can come to from these facts are that hospitals’ product evaluation/selection processes are tainted with emotions since they aren’t employing a scientific and systematic value analysis methodology to insure dispassionate results. For example, at one healthcare system where we have worked their hospital divisions were buying six different surgical disposable shavers from six different manufacturers. There is no logical reason that I can think of for this to happen except that these hospital divisions had an emotional bias when they evaluated and selected these shavers. No other rational answer can fit this pattern!
What I’m getting at here is that there is one “basic” tenant that you should be integrating into your product evaluation/selection process: Removing all biases from your decision making process! This can only be accomplished if you have a functional approach to your product evaluation/selection process where you establish functional specifications for the products your department heads are requesting. Only then do you scientifically measure new product offerings against these stringent standards. This way, you will take the emotions out of the buying equation and replace it with unbiased scientific judgment.
Warmest Regards,
Robert T. Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
Bobpres@strategicva.com
1-800-220-4274Your Partner In Savings Beyond Price™,
P.S. If this article peaked your interest, you might want to look at our new CliniTrack™ Clinical Trail Management System which incorporates the “basic” tenet that I just talked about to take the emotions out of your buying decisions.
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