Strategic Value Analysis In Healthcare

Our Empirical Data Proves That Recognition, Involvement And Setting Big Goals Are 3 Keys To Your Value Team’s Success

I have stopped counting the number of times that CEOs, COOs, CFOs and supply chain professionals have told me that their value team initiative has fizzled, stalled or – worse-yet was on life support and want my advice on how to fix it. When I ask them how they structured their value team(s) for success, motivate them and recognize them for their efforts, the phone line goes silent. After a few seconds they finally say that they formed their value team(s) without a lot of thought and then gave them orders to “save money”. It’s as if this phrase “saves money” was some kind of magic formula for success.

What all of these healthcare executives forget in their rush to “save money” is that their value teams are living, breathing organisms that require recognition, involvement and big goals, at a minimum, to keep them focused on their tasks to “save money”. Without these basic ingredients your value teams(s) initiative will wither on the vine. To ensure that your value team(s) is involved, motivated and focused, here are three keys for a successful supply value team program that you need to understand:

1. Recognition

Of all the surveys that have been conducted over the years on employee motivation, the number one motivator for individuals isn’t money, but “feeling appreciated” that costs little or no money as a satisfier. To bring this point home, we have observed with value team(s) we have coached that pizza parties, thank you notes from their CEO, tickets to movies and certificates of completion from our Certification Value Analysis Practitioner™ Program have nurtured peak performance from their value team members time after time. If recognition of this type is given honestly and consistently, then you can create a climate where your department heads and managers will want to be members of your value team(s) because it feels good to do so.

2. Involvement

Most value team(s) don’t involve their department heads and managers in the real work of value analysis, but instead have them in an advisory capacity so they can give their expert opinions on new purchases and new initiatives. This passive role doesn’t engender the passion, excitement and enthusiasm that are required to raise your value team(s) member’s performance. A much better way is to have your department heads and managers fill the role of project managers so they can take ownership of your value team process. This way, they have a vested interest in making your value team(s) a success, as opposed to acting like an innocent and blameless bystander if it fails.

3. Setting Big Goals

It’s not unusual for me to discover that a hospital or system’s value team(s) has no savings or quality goals for their supply value analysis program, let alone BIG GOALS. Goals are the engine that will keep your supply value analysis program humming, churning and moving in the right direction.

Whereas, a value team(s) that lack goals will find that their value team(s) will be perpetually unfocused, unmotivated and apathetic evermore. When you venture into the area of developing BIG GOALS (or stretch goals) for your value team(s), that’s when you will see your value team(s) performance soar, and reach heights that you never imagined.

These three keys to keeping your value team(s) involved, motivated and focused on their tasks are some the most critical building blocks you can design into your value team(s) DNA that will ensure peak performance for your teams. If you ignore these essential ingredients I can guarantee your value team(s) performance will be second-rate at best.

Find Out Where Your Supply Utilization Savings Are In Your Organization!

Complete our "no-charge, no obligation" online Supply Chain Performance Survey

Click Here to View the Survey

It will measure and identify your supply chain savings potential, and you will get your results within five short days!

I’m a facilitator for a four hospital consortium at which our savings have dwindled after five years of being in business. We are now considering developing a strategic plan to get our savings moving again. How should we get started with this planning process? B.S.

The first thing that is needed is an “environmental analysis” to understand why you have run out of savings opportunities after five years. Specifically, you would want to know if there are any more grapes left in your vineyard to be harvested. This can be accomplished with an assessment similar to the one that is shown on our SVAH Website, which will determine new savings opportunities for you that are now hidden from your view. For example, maybe your consortium has been focusing all of your savings efforts on your medical/surgical supplies (13% of your purchases) and has ignored your purchase services (17% of your purchases). By refocusing your efforts on your purchase services, you can get your savings moving again.

Next, as integral part of the “environmental analysis”, you will need to identify any barriers (cultural, political, operational and transformational) that are holding back savings from happening. For instance, is your purchasing history data of a high quality that enables your consortium to easily identify savings opportunities? Or is it almost impossible to use for data mining purposes because it is corrupted with poor data? Are their “sacred cows”, like physician preference items that your board has refused to seriously attack for savings?

All of these questions and hundreds more need to be answered before a comprehensive strategic plan can be developed for your consortium so you can move your consortium to the next level of savings performance.

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.

Have Your Looked Lately To See If Your Linens Are Meeting Your Exact Customer Requirements?

Most Of Your Linen Purchases Are Costing You 12% to 18% Unnecessarily Because They Are Either Under or Over Specified.

Most linen purchases are made month in and month out at healthcare organizations without asking the question, “are these linen purchases meeting my customers’ exact requirements, or are we overshooting or undershooting the target”? The result is that hundreds of thousands of dollars are spent monthly by healthcare organizations needlessly because they don’t know what they don’t know.

For example, one of our clients who is functionally analyzing and re-specifying all of their hospital’s high volume and high dollar linen purchases based on their customers’ (anyone who touches the product during its lifecycle) exact specifications has found a 50% savings on their bath blankets after having been over-specified for many years.

I can assure you that 50% of you own linen purchases fit into this category (over-specified or under-specified) too, because “things change and people change”, but the specifications of your linens stay the same. So, do yourself and your hospital a favor and start a value analysis project to review all of your linen specifications and you will be savings thousands of dollars monthly too.

For Those of You, Director of Materials/Purchasing, Value Practitioners and Clinical Resource Managers that want to avoid consultants and trainers but want to have their unique knowledge, strategies, tools and perspective on Supply and Utilization Savings. This is your chance!

Click Here to Get Your Hands A Million Dollar Savings System and Never Hire A Supply Expense Consultant Again!

Tele-Seminar (1-Hour) August 23rd at 12:00pm Healthcare Supply Chain Benchmarking for Peak Performance ($99 value)

Are you still challenged about where to find benchmarks?
Do you have a benchmarking system that works for you?
Do you know the 10 biggest benchmarking mistakes ?

Then join the leading authority in healthcare supply value analysis Robert T. Yokl on Tuesday, August 23 at 12: 00 P.M. Eastern on the phone and learn:

All you need is a telephone. We'll email your phone number for the Tele-Seminar. The Tele-Seminar is FREE! Robert normally speaks for about 40 minutes and then will open the line for any question you have about benchmarking for peak performance.

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