Savings Beyond Price™

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^{by Strategic Value Analysis® in Healthcare}

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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 - Feburary 1, 2011

Robert T. Yokl

President & Chief Value Strategist

 

Road to Success: Utilization Management

We are learning a great deal from our clients on the best ways that they have found to uncover strategies which would eliminate utilization misalignments, and which they believe is the third-way (price and standardization being one and two) to dramatically reduce their supply spend by as much as 7% to 15%. Not bad, when you consider that price and standardization are only yielding them about 1%, 2% or 3% savings annually.

With this said, I would like to share with you three big lessons our clients have taught us on their road to success in utilization management:

1. Employ utilization optimization tool

Since MMIs and ERP systems lack the sophistication and nimbleness to dig and drill down sufficiently into their supply steams to uncover utilization savings, our clients have opted to purchase offline optimization tools to uncover this new savings source.

2. Sharing visual data with customers

They use charts, graphics, and statistics generated by their optimization tool as a visual aid to open a discussion with their customers about why their hospital is different. For instance, we just talked to a CFO client who said he was going to use his optimization tool’s charts to show his senior management team how much their legal expenses have gone up over the last quarter. This, he believed, would support his contention that his hospital needs to farm out much of their legal work to a lower cost legal firms.

3. Encourage customers to self-correct

Our clients are finding that all they need to do is show their department heads and managers their utilization data, which compares them to their peers, thus enabling them to self-correct their non-conforming buying behavior -- in most situations. No need for arm twisting, no violent outbursts and no ruffled feathers!

These are just three big ideas to get your own utilization management program on the road to success. As our clients have found, it’s much easier than you would think!

Warmest Regards,

Robert T. Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
Bobpres@strategicva.com
1-800-220-4274

Your Partner In Savings Beyond Price™,

 

P.S.  If this article’s possibilities excites you, you might want to request a test drive of our Utilizer® Dashboard which will provide you with the graphics, charts and data you have been looking for to change the behaviors of your department heads and mangers.

 

 

 

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