How do you Compare to your Peers?
We just had two of our Utilizer® Dashboard clients ask us to provide them with a scorecard on their supply utilization management, over the last two years, so that they could discover where they had gaps in their performance. I thought this was a great idea and I was anxious to see the results.
Yet, until I actually reviewed the results of the exercise I didn’t realize how important a scorecard could be in identifying and then targeting where a healthcare supply chain organization needs to focus their supply utilization management efforts to get better than just good.
Here are the eight areas of our scorecard rated that we believe are the most important supply utilization indicators to be tracked for success:
| Data Integrity | Supply Utilization |
| Standardization | Purchase Service Utilization |
| National Best Price | Best in Class: Supplies |
| Inventory Utilization | Best in Class: Purchase Services |
Moreover, our methodology for this rating system was to compare these measurements against all of our clients in the same categories based on a statistical scale of 100 being the best in class. It was a pleasant surprise to find that the two clients who requested our supply utilization management scorecard didn’t fall below the 75th percentile in any category that we measure. In most categories, these clients were at the 90th or 95th percentile which was the motivation for them signing on to our Utilizer® Dashboard subscription service in the first place: To Improve their utilization management in all areas of their supply chain expense operations.
We also provided these same two clients with specific utilization supplies and purchase service categories (Custom OR Packs, Urologicals, IV sets, freight, postage, pacemakers, etc.) where they were “best in class” vs. their cohort group, which gave them even more particulars on how they stacked up against their peers.
Overall, I thought this exercise met its intended goal of shedding light on what was working or not working in our client’s supply utilization management program, thereby, providing these clients with specific targeted savings opportunities for this current fiscal year.
Now that you understand this rating system, how do you compare to your peers? If you know the answer to this question then you don’t need to read further. However, if you aren’t currently comparing yourself in all areas of your supply chain operations to your own cohort group then you are flying blind. To put it bluntly, you will never reach the level of “best in class” in any supply chain category you choose to excel in without first investing the time, money and resources to do so. You can’t win the game without first knowing the score!
Have You Planted Your Seeds?
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
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.
New Software Opens up a Whole New World of Supply Chain Savings Previously Thought Impossible
For Immediate Release – Contact: Robert T. Yokl @ 800-220-4274
New Software Opens up a Whole New World of Supply Chain Savings Previously Thought Impossible
Utilizer™ Dashboard version 3.2 just released! Finally, there is a user friendly software that will enable healthcare organizations to quickly identify their supply utilization misalignments from the 30,000 foot level, right down to the ground level. This simple, effective and affordable Utilizer™ Dashboard will open up a whole new world of supply chain savings most think is impossible.
Skippack, Pa (SVAH) November 14, 2008 – Healthcare managers won’t be at all surprised to hear that the healthcare industry is rife with utilization misspends and misalignments. The root of the problem, according to expert research, is that despite their best efforts, healthcare managers have yet to uncover where their true utilization savings are buried.
Robert T. Yokl, President of Strategic Value Analysis® in Healthcare (SVAH) and a recognized supply chain management expert, recalls talking recently to a healthcare supply chain manager, who told Yokl that he, employing a spend manager, an analytics manager and clinical manager tools, was unable to locate their organization’s utilization misalignments. The job was not impossible, though, as SVAH’s was able to find nearly $4.2 million dollars in utilization misalignments for this organization.
“This very skilled and highly qualified supply chain manager was unable to pinpoint his savings opportunities, but this failure was in no way related to the managers’ skills or qualifications,” Yokl says. “He simply did not have the right tool to accurately find the savings that consistently remain buried in his supply chain data.”
Yokl’s solution is simple: Use the right tools for the job. Over the last eight years, SVAH has conducted hundreds of utilization benchmarking studies for hospitals, systems and IDNs by employing a proprietary utilization dashboard, which has identified close to a half a billion dollars in utilization misalignments for SVAH clients. Yokl says his company’s Utilizer™ Dashboard is the precision tool that hospitals and healthcare institutions really need. “The bottom line is that healthcare organizations can’t do it alone; it’s an impossible task to ask supply chain managers to find thousands, and even millions in supply chain savings using old-school strategies, tools and techniques.”
With this said, SVAH has just recently upgraded its Utilizer™ Dashboard to version 3.2 which now includes an easy to use contract management module that takes the hassle out of managing and controlling the hundreds (maybe even thousands) of contracts healthcare organizations must manage, archive and bid/negotiate almost on a daily basis.
The Utilizer™ Dashboard is available as a subscription service on a fixed monthly fee basis. It identifies all potential utilization savings, and subscribers also receive unlimited phone and e-mail coaching to assist them in translating, strategizing and implementing the savings uncovered with their Utilizer™ Dashboard. Yokl says one of the best features of the dashboard is that “SVAH does all of the heavy lifting and our clients get all of the savings.”
About The Company: Strategic Value Analysis ® in Healthcare, (SVAH) Skippack, Pennsylvania, is a software, training and consulting firm specializing in supply utilization management. SVAH’s mission is to give clients greater control over their supply chain by providing them with better information, better focus, and better systems so that they can make better decisions on their second biggest expenditure.
It’s All About Utilization!
Savings Beyond Price -Weekly eNewsletter – October 15, 2008
President & Chief Value Strategist
Greetings!
Is All About Utilization!
My son and I met for an introductory meeting last week with a new material manager at one of our client hospitals who we have been servicing with software and services for the last five years.
The agenda for the meeting was for us to demonstrate our Utilizer™ Dashboard, Supply Chain Pilot software and to talk about the value analysis coaching and training we had been providing his hospital over the years, but this discussion soon spun off in another direction when this MM stated to us without any prompting that supply chain management today is “all about utilization”, not about price. Naturally, this was music to our ears, so we asked him why he believes this to be true.
He then said that he had found after decades as a material manager that it was a waste of time for him haggle with his vendors to save a few pennies off his expense budget, when his GPO contracts achieve 98% of the savings available to his hospital. On the other hand, if he invested the same amount of time to uncover, investigate and implement his utilization savings, he could save hundreds of thousands of dollars a year.
Here’s the rest of the story! This MM didn’t know us, our products or our services before this meeting, but we found ourselves on the same page with him before our meeting was over. It’s no surprise to us that more and more MMs are thinking and acting the same way as this supply chain professional when it comes to reducing their supply chain expenses. They are letting their GPOs do what they do best – reduce their acquisition costs – thereby freeing up their time so they can focus their energies on their utilization misalignments, where their greatest savings can be achieved.
To survive in these turbulent economic times we ALL need to employ, as this MM affirms, all of the weapons in our supply chain arsenal, not just the ones that are the easiest, ego boosting or handy to use.
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
800-220-4274
P..S. If you are ready to deep-dive into your supply chain why not take a “test drive” of our Utilizer™ Dashboard and we will show you how we do it.
P.P.S. Don’t forget to check out my new blog article “What’s Ahead for Supply Chain Management? This blog will show your the emerging best practices that will be coming in the near future.
