Strategic Value Analysis In Healthcare

No Supply Value Analysis Program Is Complete Without An Environmental Analysis

It was once said by Thomas Carlyle that “nothing is more terrible than activity without insight”; yet this is the way most supply value analysis programs are launched or re-launched today with…no insight, no planning and no analysis. Consequently everyone involved in the initiative is stunned when their supply value analysis program crashes and burns on take off.

This is the reason why most supply value analysis programs fail. This fact is because of a lack of insight, planning and analysis, which could be avoided with an environmental analysis to determine the strengths, weaknesses, opportunities and threats that you will encounter before launching or re-launching your supply value analysis program.

An environmental analysis is the employment of a set of tools (SWOT analysis, trend analysis, force field analysis, cause-and-effect analysis and stakeholder commitment analysis) to understand the climate that your new or revised supply value analysis program will come upon when you launch it. This enables you to change or modify some or all of the negative dynamics that you have identified during your environmental analysis.

Case in Point: your environmental analysis determines that your purchasing data needs to be cleansed, normalized, categorized and benchmarked before you can even start to identify value analysis candidates for your value team members to investigate. Or, you find that your proposed value team’s administrative representative is not a champion of your new program. These findings must be addressed before, not after you commence your new or revised supply analysis program.

By ignoring the conclusions of your environmental analysis before you begin your new or revised supply value analysis program, you will place roadblocks in your way to success before you even get your program off the ground. On the other hand, if you attack these environmental challenges head-on and remove these barriers to your success before your start your program, you can have smooth sailing with your program once you get started.

The easiest route to failure with your new or revised supply value analysis program is to ignore an environmental analysis before you get started, because it is time consuming, troublesome, and bothersome. I can assure you that if you ignore an environmental analysis before you launch your supply value analysis program that it will be even more time consuming, troublesome and bothersome to fix the problems you encounter after the fact.

What Do You Do When You Have A Physician On Your Value Analysis Committee That Doesn’t Believe In What You Are Doing? D.K.

D.K. if a physician or any other member of your value analysis committee doesn’t believe in what you’re doing to save money and improve the quality in the products, services and technologies your hospital is purchasing, then you must retire them from your committee…now, not next week or next month.

The reason for the rash act is that all committee members need to be rowing in one direction -- forward. If one or more of your members are rowing backwards or not rowing at all your boat will not be moving forward. Throw them off your boat as fast as possible to give your value analysis committee momentum again.

P.S. If anyone else has a burning question that you would like me to answer, please call or e-mail me and I would be delighted to answer it.

Your Special Functions Cost Are An Extravagance That Your Healthcare Organization Can’t Afford

With all this talk about saving money at healthcare organizations today, how then can we justify “special functions” (food and drink provided for meetings and events at our hospital) expenses in the range of 15% to 25% of our total food cost? Is this nuts or what!

In our consulting practice, it is not unusual to find a 121 bed hospital spending $251,221.59 on “special functions” costs annually, when in reality they should only be spending $12,500 to $15,500 annually.

Well, first of all, no one keeps their eye on “special functions” costs at most hospitals – so they balloon and spin out of control in no time. Secondly, most hospitals have no policies and procedures on who gets food and drink at a meetings or special events (board meeting, training program, retirement party, etc.). Thirdly, sign-offs on food and drink are approved at the lowest management level possible (department head or lower (if at all), because no one believes it’s a “big deal”.

So, if you want to make a big splash in savings this year, take a look at your special function cost, then devise a “zero-based” budget (starting with “zero” special functions annually) and only approving, at the highest executive level management possible, food and drink at meetings and events that are ABSOLUTELY, POSITIVELY NECES-SARY.

This means that for most meetings and events you will find that no food or drink is required. For meetings and events where you must provide food or drink (board retreats, training programs, retirement parties, etc.), you will find that little food or drink is really required at most meetings and events if you become creative on what you provide, such as, box lunches for board retreats and cookies, soda and water for training programs.

Our award winning "The Ultimate Value Analysis System" will show you, step-by-step how to plan, organize, manage and attain superior savings in less time with greater success.