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 - June 10, 2010
Robert T. Yokl
President & Chief Value Strategist
The Importance of Demand Management
Greetings,
The term “Demand Management” might be new to you, but this term means “measuring the velocity, intensity and frequency of the products, services and technology utilized over time”. We have found this to be a key metric to enable supply chain managers to begin a meaningful dialog with their physicians and department heads to understand why the utilization of any commodity they are buying is increasing or decreasing -- beyond normal acceptable justifiable limits.
More importantly, our clients are telling us that by them having this demand data at their finger tips they are able to spur their physicians and department heads into action. As an illustration, one of our client’s anesthesia trays jumped 21% (or $8,297) in frequency, over five quarters, even though their patient days (CMI adjusted) for this same period were actually down by 2%.
This undisputable fact, driven by data, enabled our client’s MM to start an open and collegial dialog with their anesthesia department to understand, comment and then receive feedback from them on this obvious anomaly. In this situation the anesthesia department quickly discovered the reason for this variance; their staff was throwing out about 19% of their disposable anesthesia trays because the spinal needles were falling/flipping out when they opened the trays due to defective manufacturer packaging. Happily, this was a no-brainer for the MM to solve this problem.
This is the power of information! Without this demand management data our client wouldn’t have known where to begin a relevant discussion with their anesthesia departments on their anesthesia tray’s utilization trends, patterns and variances. However, with this demand data at the ready they were able to question, persuade, and coax their peers to change their costly practices or to have them value justify why this anomaly is happening.
As another client related to me the other day, without demand data to guide you, it would be like looking for a needle in a haystack. Conversely, with demand data all you need to do is follow the numbers and this will give you direction on where you need to focus your time and energies in order to save even more money.
As I’m sure you have already realized, it is getting harder and harder to save money for your healthcare organization. Therefore, you will need new and better ways to uncover where your best savings opportunities reside and then to quickly, easily and seamlessly implement them. Our clients have found that “Demand Management” is another significant tool for them to add to their supply chain toolbox to make their mission critical chore of saving money a whole lot easier.
Maybe it’s time for you, too, to embrace this new “Demand Management” concept, I predict that this will become a supply chain best practice within the next three to five years. There is no where else to go to save money!
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. If you want to learn more about this new “Demand Management” concept I would suggest that you read the HPN article “ Utilization Management Tool Spurs Physicians, Department Heads to Action” in their June issue.
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