STRATEGIC VALUE ANALYSIS^TM NEWSLETTER

(Part 2 of 6)

  

The term “strategic planning" is not a new term in any healthcare management's lexicon, but it is one of the 5 critical missing elements (figure 1) in most value analysis programs.  A “Strategic Value Analysis™ Plan (SVA)" has many similarities to the strategic planning process in that it is a systematic and defined planning process.  It enables a healthcare organization to appraise the strengths and weaknesses or GAPS in its non-salary cost management strategies and devise new strategies/tactics for reducing and controlling their non-labor cost by employing the value methodology. 

 

Figure 1: 5 Mission Critical Value Analysis Mission Critical Elements

 

Team-Based

Technology Driven

Customer Centric

Strategic Planning Driven

Value-Based

 

It all begins with defining your vision, mission, values, goals and objectives for your new or renewed or reinvented value analysis program in terms of what your aspirations are, one, two and five years out and what savings and quality goals are real and achievable.  You need to evaluate which policies and procedures you require with our new or reinvented product, services and technology evaluation/selection program.  You also need to define the steps you will need to take to develop value teams that will be creative enough to meet the challenges of your value analysis program and to anticipate the problems or hurdles that would threaten the success of your value analysis program.

This important planning process will position your value analysis program to be successful, rather then just let it happen in an unplanned and disorganized manner.  If developed properly, it will provide you with a road map for your value analysis program and give you a blueprint to follow over the next few years, thereby, increasing your probability of success. Now, let's talk about the features of a “Strategic Value Analysis Plan™” to get it right---the first time!

 

Evaluating Your Current Non-Salary Cost Management Program

All healthcare organizations are doing something to manage and control their non-salary expenses.  They belong to one or two GPOs, have active products evaluation or value analysis committees and some even have cross-functional value teams in place to evaluate/select the products, services and technologies that they are purchasing.  Yet, most healthcare organizations don’t know if they are missing or hitting their non-salary cost management TARGET (most have no targets or goals), nor are they optimizing their non-salary cost management efforts by increasing their savings yields.

The reason there is so much complacency in the world of non-salary cost management is that healthcare organizations don’t know the STRENGTHS AND WEAKNESSES of their current non-salary cost management program. These strengths and weaknesses can only be defined by identifying and quantifying the current non-salary GAPS through benchmarking, questionnaires, focus groups and interviews. Once these four POWERFUL measurement tools are employed by you for the purpose of understanding and quantifying your current non-salary cost management program’s STRENGTHS AND WEAKNESSES, you are now ready to address the development of your Strategic Value Analysis™ Plan for a new, renewed or reinvented non-salary cost management program.

 

Development Of Your Strategic Value Analysis™ Plan

Development of your Strategic Value Analysis™ Plan isn’t an individual --Lone Ranger -- activity or even the task of a committee of a few individuals, but a formal exercise involving ALL key customers, stakeholders and experts that will be affected by the plan and WHO MUST THEREFORE own the plan for it to be truly a creative, malleable, sustainable and manageable blueprint for your success.

We have found that the best vehicle for developing a Strategic Value Analysis™ Plan is an executive workshop held over a few early mornings (when participants are fresh, energized and focused) to formulate the mission, vision, values, administrative structure, policies and procedures, etc. for your new, renewed or reinvented value analysis program.

 

Planning And Executing An Effective SVA Plan

NOW that you have your Strategic Value Analysis™ Plan written and approved you need a plan to carry out and execute your mission, vision, value, goals and objectives that to be successful will respond to our customers exacting functional requirements. This plan should include the following essentials: Strategy Formulation, Communications Strategies, Savings Strategies, Quality Strategies, Training Strategies, Change Management Strategies, Implementation Plan and an Evaluation System to include milestones to measure your progress along the way.

As an example of what I’m taking about these questions need to be answered in your formulating of your Communication Strategies: (i) Who will be your TARGET CUSTOMER GROUPS for these communications? (ii) What do you want to tell them? (iii) What are the best forums or communication vehicles (newsletters, department head meetings, medical staff meetings, etc.) that will best communicate your information to these customer groups?  (iv) How often should you be communicating to these customer groups (v) What would these groups want to know about your new, renewed or reinvented value analysis program? (vi) And finally, WHAT’S IN IT FOR THEM?

I think by now you are getting the gist of the PLANNING AND EXECUTION phase of your approved Strategic Value Analysis™ Plan, which has as its TENET that nothing is left to chance or miscommunication, because we want to “GET IT RIGHT THE FIRST TIME!

 

WHY DO WE NEED TO DO ALL THIS WORK AND PREPARATION?

I know that you are saying to yourself by now that, “Bob you are giving me a HEADACHE with all the planning, debate and discussion that I would need to have with customer groups if I took your recommendations just to get my value analysis program off the ground!”  Although this thinking would be a natural reaction, my answer would be to ask you this question, “how successful do you want your value analysis program to be?

If your answer is that “I’M LOOKING FOR SUPERIOR PERFORMANCE WITH MY VALUE ANALYSIS PROGRAM, then I will tell you that the only way to achieve “superior performance in value analysis” is through better quality PREPARATION, PREPARATION, PREPARATION, greater PLANNING, PLANNING, PLANNING and flawless EXECUTION, EXECUTION, EXECUTION!

There are no short-cuts, quick fixes or instantly SUCCESSFUL value analysis programs that I have observed in my 30 years as a Value Management Strategist, without preparation and planning built into their success formula.