The Hospital Value Analysis Multiplier Effect
One of the surprising observations that I have witnessed, for a number of years now, is that countless material managers and value analysis managers aren’t utilizing a “team approach” to value analysis, but instead these overworked supply chain professionals try to do all this hard work themselves.
Consequently, by not delegating their VA responsibilities to value analysis teams, who have the time, knowledge and rapport with their clinicians to make savings happen, they are holding back millions of dollars of new savings that are ready to be harvested. I call this progressive tactic THE VALUE ANALYSIS MULTIPLIER EFFECT: More people, more time, and more savings.
When I’m teaching our Certified Value Analysis Train-The-Trainer course one of the topics that I cover is the “Value Analysis Manager Productivity Index”, which says that a material manager or value analysis manager’s time, effectiveness and efficiency can increase by a whopping 79% if he or she is utilizing the team approach to value analysis.
If you think about it, this “multiplier” concept is really common sense, since there are only 2080 work hours in a year and as an individual you can only get so much VA work done in a day, week or month. My guess is only about 34 VA projects can be completed annually by an individual. Conversely, when you have one, two or even four value analysis team(s) with 10 VA project managers, I have seen value analysis managers’ close-out as many as 160 VA projects yearly.
One of the objections to this “multiplier” concept is that, “No one has time to be involved in value analysis teams, since there is just too much other important work to get done”. Well, my answer to this complaint is that if a healthcare organization does make time to save money, then it won’t matter what other important work they have to do, since bankruptcy will solve this problem – forever!
I could cite numerous other benefits to the “team approach” to value analysis, but I believe the main justification for utilizing this technique is that it will enable you to save more money, in less time and with much better results. It’s your choice, but I’m betting that some of my readers will decide to take this advice seriously and find a way to do so!
Filed Under: savingsblog • Value Analysis
