Are You Really Different?
Savings Beyond Price -Weekly eNewsletter – May 27, 2009
Robert T. Yokl
President & Chief Value Strategist
Are You Really Different?
Greetings,
When we discuss our benchmark findings with our clients they often say, “My hospital is different”. This is frequently their first reaction to savings opportunities we have uncovered for them with our UTILIZER™ Dashboard. The question they should be asking themselves is, “why are we different?
Here’s why! Hospitals of the same size, type and with similar operating characteristics should be utilizing, within an acceptable range, their individual products, services and technologies at the same velocity and intensity.
If you find that you are NOT within an acceptable range (plus or minus 3%) through benchmarking, then you need to seriously question why not. In some cases, you will find that you are indeed different and your benchmarks need to be reset to account for your legitimate differentiation. Here are three reasons in which hospitals are genuinely different:
1. Unique Conditions – One hospital we worked with was utilizing a huge quantity of disposable bath systems only to find that they didn’t have showers in their patient rooms. This physical constraint required this hospital to use more of this product since they had no alternative.
2. Management Fiat – A client’s corporate office mandated that their four hospitals standardize on hyper-allergenic gloves throughout their facilities. Naturally, they would have more dollars in this category of purchase than their peers.
3. Operating Culture – It was decided by another client of ours that they would employ Oxisensors on their patients using PCA Pumps for Pain Meds. to make doubly sure they were safe. This substantially increased the volume of Oxisensors this hospital was buying.
4. Tradition & Rituals – Another client of ours placed logos on many of their products (coffee/soda cups, patient water cups, carafes, etc.) that increased the cost on all of these commodities. This certainly made them different than most of our clients.
So as you can see, there are justifiable reasons why your hospital might be DIFFERENT in the way you utilize your products, services and technologies. However, these outliers are not be construed as common practices in our industry. That’s why you need to measure and observe why you are different, before you can make the case that your hospital is really different!
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. Our clients find that our UTILIZER™ Dashboard is an easy way to indentify utilization misalignments, instead of just “skimming the surface” of their savings. Take a “test drive” today!
Make Savings A Team Effort!
Our research, surveys and empirical data tell us that too many supply chain professionals are trying to make all or most of the supply chain savings for their hospital, system or IDN themselves. While this is a commendable effort, it isn’t productive, prudent or cost effective in the long run.
A much better way is to share the workload with your value analysis team members. I will guarantee that by doing so, you will increase your savings output by 300%, 400% or even 500%. If you don’t have a value analysis team(s) now, then it is high time you establish one to lighten your workload, increase your throughput and boost your buy-in on your savings ideas.
It then becomes your job to facilitate, coach, train and consult with your VA team leaders and VA team members to ensure that your VA team is on track, on budget and on target to save big for your healthcare organization.
One of the secrets of personal productivity is DELEGATION: Assigning others your responsibility, but not your accountability to get things done! That’s what a VA team can do for you. It will provide you with many extra experienced hands that you will need to operate at peak performance. The alternative is to continue to be swamped, frazzled and overworked while getting little, if any, real, robust savings work done.
Are You Skimming the Surface?
Savings Beyond Price -Weekly eNewsletter – May 12, 2009
President & Chief Value Strategist
Greetings,
Do you know how much supply expense savings you are leaving on the table by “Skimming the Surface” of your supply chain savings? The answer is 7% to 15% of your total supply spend, or 1 to 2 million dollars per occupied bed.
For example, if your hospital averages 180 occupied beds, you can almost guarantee a savings of $1.8 to 3.6 million over a 12 to 18 month period. You do the math for your healthcare organization. I can promise you that new utilization savings opportunities you are losing today will outshine your current and even future GPO savings.
You can dig deeper and broader into your supply chain for new, different and more substantial savings opportunities that won’t be uncovered by traditional supply cost management efforts. You will need to mimic the methods and practices of Sherlock Holmes (the fictional 19th century English master detective) to discover these hidden savings.
Holmes was famous for his intellectual prowess and renowned for his skillful use of astute observation, deductive reasoning and inference to solve his most difficult cases. You too will need to observe, deduce and greatly expand your investigative skills to determine how your customers are actually employing the products, services and technologies you are buying for them.
In most situations, you will find that your customers are swamped with work. They don’t have the time to stop and analyze the best use of this product, service or technology, if they are being wasted, or if there is a lower cost alternative that could meet the required function.
That’s why it’s your job (or your value analysis teams) as a supply chain professional, to avoid “Skimming the Surface” of supply chain savings. Instead, become a supply chain master detective who performs detailed investigations in order to uncover your hospital, systems or IDNs utilization misalignments. That’s where your biggest savings opportunities reside today — not in price.
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 are looking to get better than good at project management, you might want to sign up for a “test drive” of our Utilizer™ Dashboard so that you can see for yourself how our project management module will enable you to easily manage multi-projects with two clicks of your mouse.
Turn Tough Times into a Great Opportunity
A little-known fact is that the Chinese symbol for “crisis” (wei1 ji1) equates to opportunity in the Chinese lexicon. Strange as this may seem, the Chinese civilization has been around for thousands of years, so I guess they know an opportunity when they see one — even in a crisis.
It’s the same with the effects of our recession today. We have a great opportunity in these tough times to use this crisis to our advantage. Management at most healthcare organizations will be open to new and better savings ideas. Our department heads and managers will be more malleable when it comes to saving money. Even our doctors will be more open to discuss how they can help us in this predicament.
Case in Point! One hospital client of ours told us just last week that their surgeons asked them to establish a committee that would sit down on a regular basis to help their operating room director to identify and then implement new savings ideas. This hospital is being very proactive with their Value Analysis and Lean savings programs and the surgeons want to make a positive impact as well.
This is an unprecedented turn of events for this hospital, which I believe can be replicated nationwide, if only you decide to turn these tough times into a great opportunity to get your savings ideas heard, accepted and then implemented.
This isn’t a time to be frozen in your tracks. To the contrary, it’s the best time that I have seen in decades for you to maximize your savings efforts by engaging your executive management and hospital staff in meaningful discussions that result in even more productive and efficient methods and practices than ever before.
Too Many Competing Priorities
Savings Beyond Price -Weekly eNewsletter – May 6, 2009
President & Chief Value Strategist
Too Many Competing Priorities
Greetings,
One thing I have noticed lately is that healthcare organizations have too many competing priorities to keep on track, on budget and on target.
We see this phenomenon with our LEAN Value Analysis Program that we are installing at our clients’ facilities. Once we arrive on the scene, we immediately find that we are competing for time, money and resources with Six Sigma, Quality Excellence, LEAN Management and other initiatives that are also of a HIGH PRIORITY.
With so many competing priorities, how do you and we make our project deadlines, achieve our savings and quality goals and at the same time effectively balance our limited resources across multiple projects?
In brief, the answer is to sharpen your PROJECT MANAGEMENT skills. Project management isn’t just a buzz word; it is a body of knowledge honed over many years that will give you the techniques, tools and tactics that will enable you to build a solid foundation to manage any and all project lifecycles that you are faced in healthcare today.
Just the other day a client told me that one of the most effective project management tactics that he had found was to automate his project management process. Before he had done this, he said he had hundreds of projects that he didn’t know the status of, but now with two clicks of his mouse he can see the progress on all of his projects at one time. He now tells me that he can finally sleep at night without worrying that his projects aren’t on time and on budget.
I can promise you that your hospital, system or IDN won’t be slowing down any time soon on their multi-projects with competing priorities. Therefore, you will need to find ways to increase your efficiency and effectiveness on the multi-projects that your management assigns to you and your supply chain team. Project management is the answer!
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 are looking to get better than good at project management, you might want to sign up for a “test drive” of our Utilizer™ Dashboard so that you can see for yourself how our project management module will enable you to easily manage multi-projects with two clicks of your mouse.
Don’t Wait: The Train is Leaving the Station
As I mentioned in my column in early April, a recent survey by Novation reported that 44% of the healthcare organizations they surveyed have decided to focus on utilization management as their new path to savings for their hospital, system or IDN. Are you one of the 44%?
To me this Novation survey means don’t wait the train is leaving the station on utilization management. It’s the fastest growing new discipline in supply chain management. That’s why you too need to be on this fast moving train.
Every decade or so a new idea, innovation or invention is discovered, revealed or uncovered in healthcare supply chain management that literary changes the game as we know it. By definition, a game changing event changes the rules or is a variation on old rules which makes it into an entirely a NEW GAME. Take my word for it Utilization management is one of these game changing events.
We have been engaged for nine years now in intensive utilization research and comprehensive utilization studies. We have been retained by hundreds of clients in real world utilization management projects that have generated 7% to 15% in new supply chain savings – beyond price. That’s why I can make these seemingly bold statements about this new discipline.
If you are looking for even more information about this emerging best practice, I would suggest that you download my special report, “Utilization Management: The Future of Supply Chain Management”, before the train leaves the station.
Rethinking Your Supply Chain
Savings Beyond Price -Weekly eNewsletter – April 29, 2009
President & Chief Value Strategist
Rethinking Your Supply Chain
Greetings,
“Companies (and healthcare organizations) are searching for the right combination of smart cost cuts, strategic investments to get them through the current recession and position them to succeed when the economy rebounds. The question everyone is asking: What will be the new normal?” This is the reaction of Jean V. Murphy, a writer for Supply Chain Brain, to the realities of our new economy.
If there was ever a time to rethink your supply chain strategies this is it. No longer can it just be about price which only represents 1%, 2% or 3% savings for your healthcare organization annually. If your hospital, system or IDN wants to remain viable in this new economy, they and you will need to ATTACK all of your supply chain cost – all at the same time.
Because the NEW NORMAL, as Murphy calls it, will still mean reduced demand for your healthcare organizations’ services for many, many years, even if President Obama passes his national healthcare in this congressional session. Nothing happens quickly in Washington!
The only way for your healthcare organization to survive in these turbulent times is for them to doggedly manage and control their fixed and viable costs. Since your supply chain expenses are the second largest viable expenditure for your hospital, system or IDN this is YOUR responsibility.
Case in Point! We are working with a large healthcare system that is speeding up their plans to ratchet down ALL of their supply chain cost (price, utilization, inventory, physician preference items, contracts and logistics) at a breathtaking pace now that they realize what the impact of the NEW NORMAL means to their system. No longer is their corporate office accepting weak excuses from their hospital divisions on why the timing isn’t right for these initiatives, because they recognize that cost is our enemy and we must always be on the attack.
Is this the mind-set you too have with your supply chain cost? If not, why not, since your healthcare organization’s survival depends on it!
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 are interested in moving beyond price savings alone you might want to revisit my White Paper, “Building a Savings Factory” to get your saving machine humming again.
