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

Bobpres@strategicva.com

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!

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.   

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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!

 

Robert T. Yokl

President & Chief Value Strategist

 

Greetings!

Are your Value Analysis Arteries Clogged?

I have identified a new disease called Grouppurchasingsclerosis that most healthcare organizations that have supply value analysis programs are at risk of developing or are already experiencing serious symptoms. This new disease is clogging or narrowing hospitals, systems and IDNs vital saving arteries with big fat GPO contracts and could be fatal to your healthcare organization’s financial health. 

You heard me right, if your healthcare organization has Grouppurchasingsclerosis then very little savings is moving through your Value Analysis funnel® because it’s clogged up with new or renewal GPO contract evaluations. This disease can be silent and deadly for those hospitals, systems and IDNs that don’t pay attention to the warning signs.

Just recently a MM told me that his hospital had several symptoms of this fatal disease. He has personally observed that his two value analysis teams (clinical and surgical) spend 70% of their time evaluating new and renewal GPO contracts and spend very little time investigating the waste and inefficiency in his hospital’s products, services and technology’s value streams where the greatest savings opportunities reside.

I then gave this MM a prescription to stop the pain and suffering he was experiencing. This called for his hospital to establish a new GPO contract team that would be dedicated to evaluating and selecting new and renewal GPO contracts, so that his present two value analysis teams could get down to their real work of performing value analysis studies without being bogged down with their artery clogging GPO contracts.

This is not to say that your GPO contracts aren’t a vital and essential element of your supply chain expense management program. What I am saying is that your GPO contract due diligence process shouldn’t supplant your value analysis efforts if you don’t want to develop this dreaded and hideous disease that I call Grouppurchasingsclerosis.

If you don’t heed this warning you will be putting your hospital, system or IDN at risk of never wringing the towel dry of ALL of your best supply chain savings opportunities since you will be clogging your VA arteries with your GPO contracts that should be analyzed with a separate and distinct contract team. With this said, isn’t it time that you check if you have any symptoms of Grouppurchasingsclerosis at your healthcare organization?

 

Your Partner In Savings Beyond Price™,

Robert T Yokl

Chief Value Strategist

Strategic Value Analysis® In Healthcare

Bobpres@strategicva.com

800-220-4274

P..S. Legally, we cannot say our Utilizer™ Dashboard is the worlds best savings finding tool in healthcare today, but our clients thinks so which is all that matters to us.  

P.P.S. Don’t forget to check out my new blog article, “Supporting Multiple Projects Doesn’t Need to Give You a Big Fat Headache”.  This blog will show you how to get more done in less time with less hassle.