Read this book and in a few weeks save more money than you have in years. Sounds unbelievable? Robert T. Yokl and Robert W. Yokl, healthcare’s leading authorities in Supply Utilization Management, have helped hundreds of hospitals, healthcare systems and integrated delivery networks to saved close to a half billion dollars by employing the same utilization management strategies, tactics and techniques that they will teach you in this book.

Get Your FREE Copy Here

Utilization Misalignments

Just because you have the best price for your purchase service contracts doesn’t mean they are cost effective. You also need to eliminate all waste and inefficiencies in their value streams. Just like one of our clients found when they looked at their telecommunication invoices only to find they were being slammed with thousands of dollars of phone charges annually they hadn’t authorized. So don’t stop searching for additional purchase service savings because you think you have best price, when there literally is hundreds of thousands of dollars of new and better in-use savings that are just waiting for you to harvest.

Specification Overkill

When I read a purchase service contract that hasn’t had its specifications revised, improved or amended in a number of years, I can always find small or big savings opportunities because our customers don’t need everything that is included in the contract to perform the service that is described. 

For example, how many times does your hospital’s windows need to be cleaned in any given year? Have many times a year does your high and low-tech equipment really need to have preventive maintenance? How many rent-a-guards do you need on each shift?  Do you get the idea?

In-Sourcing Opportunities

For many years it becomes such an ingrained habit to outsource a particular service for many years that we overlook the possibility of in-sourcing these services again when the timing and conditions are right to do so. Food service or environmental service outsourcing are good examples of this happening. It’s been my experience that these departments generally aren’t outsourced for lower cost alone. It’s usually quality issues too, that drive the decision to outsource these departments in the first place. Therefore, it’s my suggestion that when any purchase service contract comes up for renewal it should always be considered a MAKE or BUY decision, not just a contract renewal decision.  This way you never-ever leave any purchase savings dollars on the table – untouched!

As more and more supply chain managers take on the responsibility of sourcing, bidding and negotiating their healthcare organizations’ purchase service contracts, just remember that your purchase service contract price is just-the-tip of the iceberg! Your greatest purchase service savings are actually to be found below the waterline. This can represent as much as 26% in aggregate purchase service savings annually for your healthcare organization in the first round of value justifying your purchase service contracts.  Don’t you think this is a much better way to shave your purchase services cost, than just attacking your price alone?

Well, I found early on in my career that it was easy to get the best pricing on everything that I bought if I contracted through my GPO or bid a commodity that wasn’t under a GPO contract.  I didn’t need to lose sleep over this important, but very manageable activity any longer.

That’s when I realized that value analysis was where the action, opportunities, and recognition were in any healthcare organization. From that point forward, at every hospital, system and IDN I worked I immediately formed value analysis teams to root out the waste and inefficiency in my healthcare organization’s supply chain.

By doing so, I immediately saved my hospital, system or IDN millions of dollars (beyond price) annually, and gained a reputation as a superb material manager.   This reputation wouldn’t have come to pass if I decided to use my skills to shave two or three cents off the pencils I was buying.

More importantly, because of the high visibility my value analysis teams attained in these healthcare organizations everyone in the organization knew us by our achievements (better quality, service and reduced cost).  When it came time for my annual pay raise or bonus negotiations my senior management never quibbled about giving me a raise or promotion because they had seen my work first hand in a very observable way.  

So if you are looking for more money, more recognition and more promotions in your healthcare organization, I would recommend that you “focus on what matters” – value analysis. And let your price savings become an automatic and systematic task that shouldn’t take much of your valuable time at all.

]]> http://savingsbeyondprice.com/savingsblog/how-to-create-manage-and-maintain-high-performance-value-analysis-teams/feed/ 0 http://savingsbeyondprice.com/savingsblog/are-you-skimming-the-surface/ http://savingsbeyondprice.com/savingsblog/are-you-skimming-the-surface/#comments Wed, 27 May 2009 16:18:22 +0000 Robert Yokl http://savingsbeyondprice.com/savingsblog/?p=131

Savings Beyond Price -Weekly eNewsletter – May 12, 2009

Robert T. Yokl

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

Bobpres@strategicva.com

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.

 

 

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.

Savings Beyond Price -Weekly eNewsletter – April 8, 2009

Robert T. Yokl

President & Chief Value Strategist

 

Have You Planted Your Seeds?

 

Greetings,

What do perennial flowers and recurring supply expense savings have in common? The simple answer is that both can grow and bloom for many years if you use the right tools, provide adequate nourishment, and the proper care and placement.

Why? We have found that healthcare organization must plant seeds today in order to generate new savings tomorrow, next quarter or even next year. Otherwise, your supply expense savings will be short-lived or worst yet, die on the vine before being harvested. 

Think about it this way.  Your price savings are getting harder and harder to achieve since you and your GPOs have squeezed your suppliers’ margins to the bone.  But that doesn’t mean that there isn’t BIG robust savings to be obtained by more effectively managing and controlling your healthcare organization’s products, services and technologies’ in-use cost or as we like to call them utilization misalignments.

In fact, our studies show that there is as much as 7% to 15% in NEW supply expense savings available to you right now. You can do this by attacking your wasteful and inefficient consumption, misuse and misapplication within the millions of dollars of products, services and technologies that you buy annually.

Case Study:  One of our 223-bed community hospital clients was getting an excellent price and rebates on their contrast media, but then they found using our UTILIZER™ Dashboard that their contrast media in-use cost was $42,666 higher than their peers. When this utilization misalignment was investigated by one of their hospital’s value analysis project managers, they found that their radiology department had standardized on 155cc prefilled syringes to administer their contrast media.  Their community standard was 100cc doses! After several negotiation sessions with their radiology director, he finally agreed to only use 155cc doses on his liver function patients; thereby immediately reducing his hospital’s contrast media cost by $41,298 annually.  This was a win-win for all involved parties!

Question! “How would you know where your utilization misalignments are hidden at your healthcare organization without having a power tool to plant the seeds to grow and bloom your savings every month, every quarter, and every year?”

The typical healthcare organization has 7,000, 14,000 or even 30,000 SKUs (stockeeping units) they must track, manage and control continuously to ensure that their pricing and utilization is truly within acceptable limits.  This is an almost impossible feat for super busy supply chain professionals to accomplish without leveraging technology to do this hard work for you.

A new era of supply chain expense management has arrived: Utilization Management. In fact, a new survey by Novation reported that 44% of healthcare organizations have decided to focus on utilization as their new path to savings for their hospital, systems and IDNs. This is the reality of the supply chain of the future, since price savings are slowly, but surely disappearing!

Isn’t it time that you jump on this fast moving utilization train so that you can reap the full benefits of new and better supply expense savings that are not only sustainable, but inflation proof?

 at a time.

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. If you want to know more about what utilization management is all about may I suggest that you download our Utilization Management Special Report. This is the future of supply chain expense management.

 

John Quincy Adams, our sixth President of the United States, once said that “Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish”. This quote should be the mantra of all supply chain professionals since it is the essence of what we do: prepare, present, win/lose, and then if necessary, reorganize to try again on another day.

What disturbs me is that too many supply chain professionals GIVE UP too easily. They accept a NO decision as being final, without being patient and persevering in finding the right opportunity to make their case again.  Maybe in a different way!

This reminds me of a supply chain manager, who is now a client of ours, who impressed me by his patience and perseverance in getting approval on our Utilizer™ Dashboard subscription service. He saw the value of our Utilizer™, but his senior management didn’t. He could have stopped there and no one would have thought less of him, but he didn’t stop at the first sign of resistance.  Instead, he patiently persevered by asked his CEO and CFO what would need to happen to get this service approved.  They then give him a number of tests (IT approval, high marks on reference checks, favorable case studies, legal review, etc.) that our Utilizer™ would need to pass in order to obtain their approval. He then methodically set out to meet all these tests that where outlined for him by his CEO and CFO.  Well, it took a few weeks to make all these requirements happen, but guess what? This MM met all the tests and gained his management approval.  That’s what the power of patience and perseverance can do for you!

No one’s batting average is 1,000% on getting your ideas approved, nor should it be in a democratic healthcare organization. However, if you don’t have a batting average of 500% or better you need to do something different to get different results. I agree with John Quincy Adams that the best way to do so is with patience and perseverance. This will have the magical effect of making your difficulties disappear and obstacles vanish.  Isn’t this what you are looking for?

Savings Beyond Price -Weekly eNewsletter – March 11, 2009

Robert T. Yokl

President & Chief Value Strategist

 

When Every Penny Counts

Greetings,

I reviewed a list of savings opportunities with a small rural hospital client’s CFO recently and I told him I was disappointed that we only found $226,926 (3% Annual Supply & Purch. Svcs.) in new savings for him. He told me that he wasn’t let down by the results for the reason that “every penny counts” at his healthcare organization. In most years, this figure would equal his bottom line.

This CFO’s response shocked me, since I didn’t realize how thin most hospitals’ bottom lines were each and every year. However, it reinforced my philosophy of how important it is for supply chain professionals to save each and every penny that they can to improve their hospital’s bottom line.

Remember: It requires about $33 dollars in new revenue to produce just one dollar in new profits for your hospital.  It only takes one dollar in supply chain savings to have the same bottom line effect. That’s why this CFO was pleased about the savings opportunities we uncovered for him, since it is nearly impossible for him to generate new revenues in our current economy.

Now that you know that “every penny counts” at your healthcare organization, supply chain professionals can become heroes by squeezing the towel dry in supply chain savings one penny at a time.

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

 

P.S. If you are looking for ideas to save even more pennies, I invite you to download my “Building a Savings Factory” White Paper to get your savings engine into high gear.   

.

P.P.S. I want to remind you to take a look at our latest version of our Utilizer Dashboard Software today.  You have to see how this software tool will give you fast, efficient and easy to use low cost tool to help you drive out all of your savings beyond price then you need to take a look at the Utilizer today!  You have to see the Utilizer to Believe it!

 

1.                Get Organized to Save – Who do you think will save more with less, a supply chain manager who has an organized strategic written plan or a supply chain manager who is just going along with the flow or as we say “winging it?”  Of course the answer is going to be the supply chain manager with the written plan who can look at the macro and micro picture of their supply chain performance.  Don’t leave anything to chance, plan for success!  Need a Savings Plan Template?  Check out our Targeted Blueprint for Supply Chain Savings!

2.                Stop Thinking Price – Let’s face it, the effort it takes to scrape up price savings is not worth the effort any longer.  We have our GPO contracts in place and we are lucky to hold the line on increases as opposed to the big savings that we are accustomed to seeing.  One answer is to start looking for “Savings Beyond Price™ which we have calculated could be as much as 79% of all new savings opportunities available to you!  Look for waste, inefficient use, over-standardization, and value mismatches that could be easier to attack than price savings if you really look for them.  Download our Free Supply Chain Utilization Report here!

3.                Ask Your Colleagues Where They Are Saving Big – Start asking your colleagues where they are finding savings and see if their efforts translate into opportunities for you too.  This could be achieved by using the AHRMM listserv. Another idea would be to create your own “Savings Tip Groups” with your colleagues that you can share your best practices and savings ideas.  Why reinvent the wheel when you can learn from your colleagues and they can learn from you as well?

4.                Get Your Vendors Working For You – You have valuable expert resources that could be put to work for you in order to save big money for your organization.  As we see it, you are only utilizing a fraction of your vendor’s product lines. There are many cost-saving products to choose from that you may have overlooked.  Tell your vendors that you would like to have them make recommendations that would reduce your costs inside their existing product lines.  This will ensure  their importance to your organization as not only a vendor that provides product, but as a valued partner that actually does more than just sell you products.

We know it’s tough out there and I hope that these ideas can assist you in taking your organization to the next level of savings.  In addition to these savings ideas, I want to make you aware that we have a huge archive of articles and savings ideas available for FREE on our www.strategicva.com web site and blog. Go ahead and check them out at our expense. I can guarantee you, that you won’t be disappointed!

Are your value analysis studies taking too long?  You probably have heard the old  song “Endless Summer”. This song reminds me of the song played at many value analysis team meetings across the country. You may have heard this tune at your own value analysis meetings as well: Endless VA Studies! 

In my 27+ years as a coach and facilitator of value analysis teams I have observed that the one challenge value analysis professionals experience is getting their VA studies accomplished quickly and efficiently. This quickness and efficiency will have a positive impact on your hospital’s bottom line.

To assist you with this challenge, here are five of my best practices I teach teams that have helped speed up any and all VA studies:

Plan Your Studies – There is an old adage in the business world “A Business with No Plan is a Plan for No Business.”  I think this sentiment applies to value analysis in the sense that a value analysis study with no plan is a plan for no savings or quality improvements.  Therefore to improve your outcomes you must set goals for your VA study along with a detailed action plan. Remember: A VA study plan is always written and then discussed with your team leaders to improve it. Most importantly, you need to update your team members as to your progress against your plan frequently for feedback.  Your plan does not need to be elaborate but it should be easy to understand, thorough and constantly updated as well.  In doing so, you won’t need to tax your brain trying to remember the little details or forget important action steps.

Get it Done in 60-90 Days (2 to 3 Months!) – This is one of the most important aspects of any value analysis study. Setting a due date for studies so you don’t suffer the endless study syndrome.   Let’s face it, your project managers will not like making a time commitment at first, but it is a commitment that will be worth its weight in gold once you make it a best practice.  We have found that 60-90 days is a reasonable timeline for just about every type of study in your healthcare organization, especially if you follow the advice of step-1 above.

Stop “Winging It” – In this day and age would anyone be the project leader on a LEAN Management or Six Sigma Team without having been trained as a Green Belt (or a Black Belt) in the disciplines that are deemed best practices?   Well of course we wouldn’t. Yet we take for granted the fact that value analysis is a process and system that is very similar to LEAN and Six Sigma and does require extensive training and a thorough understanding of the best practices of value analysis in order to be highly effective at meeting your savings and quality goals.  Training is the key to your success; don’t ignore the incredible advantage it will give you.  I guarantee you it will make your value analysis studies faster, better and more timely with advanced VA training.

Track Your Project Managers Study Process – This goes hand in hand with having an action plan, but it is very important that you track every aspect of your value analysis studies especially if you are a VA Coordinator or a VA Team Leader.  You MUST know the status of each and every VA study if you are to avoid the endless study syndrome.  At every team meeting you should have your VA Project Managers submit a progress report which would require them to update the team on what was accomplished from your last meeting.  You may get some push back on this idea. But really how hard is it to fill out a Word template to say that this is my progress since last meeting and I did A,B,C and D, as well as, to report that I will be doing E, F and G by next meeting. It’s a simple one page task all team members can do! 

Don’t Let One Person Do All the Leg Work – This is one of the biggest mistakes Value Analysis Coordinators, Managers or Directors make who do all the leg work on all their hospital’s VA studies. If you allow this to happen your VA Team isn’t really a team but instead is a steering committees whose members are asked to makes decisions or give input on a hospital’s value analysis projects without getting their hands dirty. This isn’t a productive way to do business! 

Let’s face it, the number of VA studies that can be accomplished by one VA Coordinator, Manager or Director pales in comparison to the number of studies that can be completed by a value analysis team with 10-12 members who all take on one VA study each.  An outstanding VA Coordinator, Manager or Director could probably work on 4-6 studies at a time but if you can double or even triple your savings yield through real teamwork your VA study productivity will explode.

Savings Beyond Price -Weekly eNewsletter – January 28, 2009

Robert T. Yokl

President & Chief Value Strategist

 

New Science for Bigger Savings

There is a new science for saving and operational excellence called “value analytics” that can squeeze every LAST drop of savings out of your supply chain and make your operations even more efficient and effective than ever before.

At a time when every dollar saved is surely needed to hold back the red ink at your healthcare organization, if you aren’t employing this powerful technique to uncover new savings and leverage operational improvements you are missing out on a powerful transformational tool.

It comes down to this! Most hospitals, systems and IDNs are throwing darts at an elusive and moving target to find their best savings and operational improvements. And with meager results! This is because most healthcare organizations aren’t employing a scientific approach to identify their best opportunities.

That’s where “value analytics” comes into play.  It’s the art and science of measuring trends, patterns, and variations in your supply chain spend and operations in order to quickly identify savings and operational opportunities.

As an example, we recently found that one of our clients was trending unfavorable, by as much a $172,339, in their defibullator expenses. In another study, we found that a client of ours was generating too many purchasing orders for their size organization and therefore needed to reinvent their purchasing operations to reduce their operating cost.

It’s not an accident that we uncovered these anomalies in our clients supply chain operations. It’s because we employed “value analytics” to do the difficult work for us that never would be uncovered by the naked eye or even intuition.

That’s why I call “value analytics”  the science for bigger and better savings and operational excellence. This is where the future of supply chain management is going.  Is this the direction you are going too?

 

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

1-800-220-4274

P.S. If you would like a reprint of an article I wrote for Hospital Materials Management on “Value Analytics” that explains this new science in detail just e-mail your request (with your fax number) and I will promptly fax it to you. 

P.P.S. Don’t forget to check out our new blog “Is Value Analysis a Numbers Game?!” that will help you understand how to turbo-charge your value analysis studies.  

Robert T. Yokl

President & Chief Value Strategist

 

Greetings!

Doing it with Data

One of the top 10 mistakes that value analysis practitioners make when they are assigned a value analysis study is that they don’t data mine to hunt for predictive information that can lead them to those big and little pearls of discovery.

This is because it is much easier to stop at the first savings that is identified (usually a price savings) in a VA study and then call it quits. Remember, price is just the tip of the iceberg and that 79% of all NEW supply chain expense savings is to be found underneath the iceberg.

Case in point!  A few years ago I performed a value study on diabetes tests where I quickly found that my client could save 11% (or $8,234) by jumping on a new GPO contract, but I didn’t stop there with my study.  I then data mined my client’s test utilization and found that they were utilizing 7x more tests or $64,234 then their peers. Further investigation and observations uncovered that my client’s diabetes test strips were defective thereby their nurses had to use two test strips before obtaining an accurate reading. Once this defect was eliminated the total project savings for my client resulted in a $72,468 yield!

If I would have stopped my value study when I uncovered the $8,234 in price saving for my client I would have missed altogether 90% of the savings available on this project. The term “Doing it with data” isn’t just a nice phase to quote, it’s the central part of any value analysis study.

More importantly, data mining is the future of supply chain expense management!  Don’t ever miss this step (doing it with data) in your value analysis process, or you will leave millions of dollars of savings on the table – untouched.