Strategic Value Analysis In Healthcare

Strategic Value Analysis® Healthcare

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The Process Connection

With few exceptions, healthcare organizations are the most complex enterprises on the face of this earth. They are composed of interconnected and interdependent parts making up the whole. In the modern business vernacular, we call these parts processes. Processes are a systematic series of methods and practices directed to some end. In our healthcare environment, the end is “wellness” of the patients we are treating, but how many of these processes (admissions to discharge) are really of value in our customer’s eyes? The best measure we have found for determining best value is the value equation shown in figure 1 (function/cost = value). It has been our clients’ experience, utilizing THE VALUE EQUATION as their “best value test”, that any and all processes can be reduced by 30% to 40% in complexity. 10% of what is being done can be eliminated entirely, because it has been found to have NO VALUE.

To bring this point across to you succinctly, a client of ours that had been utilizing our “process” value analysis methodology found that they could shave off 10 minutes on their mammogram diagnostic tests by: (i) having their patients fill out the required documentation themselves, (ii) not having their patients wait to see if they required a retake, since only one in three hundred patients required retakes and (iii) adding more change lockers for patients to quickly disrobe and dress without bottlenecks. This enabled our client to do eight more mammograms a day, which increased their revenue seven fold.

Louis J. DeRose said it best when he defined value as, “Value means satisfying customer requirements reliably and consistently. It means satisfying them cost-effectively.” This is based on their acknowledged perceptions, NOT OURS. It is therefore our job as value practitioners to root out all waste and inefficiency in our processes’ value chains if we want to truly serve our internal and external customers reliably, consistently and cost-effectively.

TRADITION Is Our Biggest Enemy In Our Search For Value

TRADITION (or “we have always done it that way”) plays a crucial role in why we do what we do and is the #1 reason that is holding back needed process changes. Tradition, in the classic sense, means handing down from generation to generation beliefs, customs, doctrines, methods and practices that worked for a long time. The drawback is, they might not be of value today.

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.