4 mistakes value analysis leaders keep making

How to overcome deep-seated obstacles to peak performance.






Publication: Healthcare Purchasing News
Author: Yokl, Robert T
Date published: December 1, 2010

Over the last three decades I have observed value analysis team dynamics up close in more than 526 small, medium and large healthcare organizations. During that time, a flood of articles, seminars and workshops have offered countless philosophies, principles and practices geared to institutionalizing the value analysis methodology in hospitals, systems and integrated delivery networks. Strangely, just about all those efforts have overlooked four basic mistakes that value analysis leaders keep making that is holding back the peak performance of their value analysis teams.

Prominent pitfalls

To help you to avoid these pitfalls, I will describe these four mistakes and share examples that show how value analysis leaders can overcome these deep-seated obstacles to attain peak performance from their value teams:

1. Failing to set specific and measurable expectations.

It's rare for me to see value analysis team leaders setting specific and measurable monthly, quarterly and annual savings goals for their value analysis team. Most value analysis team agendas that I read are chock tun of new products, services and technology requests that usually add thousands of dollars to a healthcare organization's supply budget, rather than reduce it.

Value analysis' primary purpose (or reason for being) is to reduce your cost of acquisition to disposition for healthcare organizations. That's why every high performing value analysis team that we have worked with or observed sets specific and measurable (down to the last decimal point) savings goals for their current fiscal year. These savings goals are set each year either as a byproduct of negotiations with their CFO or are defined through benchmarking of peer healthcare organization's. It's not as important how you do it! What's vitally important is that you do it each and every year.

2. Excusing team members who don't do their homework.

Too often, I see value analysis team leaders letting their team members off the hook, or making excuses for them, when they haven't done their homework (sometimes for months on end) on the value analysis projects they were assigned. This passive-aggressive behavior can be deadly and debilitating to your value analysis team's spirit, performance and reputation.

To solve this problem, progressive value analysis team leaders either retire or fire these individuals (after a few coaching sessions) from their value analysis teams to prevent them irom contaminating other team members with their obvious poor team work habits. It's somewhat unpleasant to confront these people, but absolutely counterproductive not to do so.

3. Leaning too much on suppliers for their expertise.

We see too many value analysis studies being delegated to suppliers who have built in bias, don't see the big picture and sometimes lack the social intelligence to provide undistorted conclusions and results for their customers. 1 remember one such value analysis study conducted by one of our client's form suppliers that targeted their General Procedure/Test Requisition ($185,536 spend annually) for investigation, and who reported that he couldn't find any savings after analyzing this form for his customer.

Fast forward a few months. The hospital's material manager conducted an identical value analysis study on this form and quickly identified and then implemented a savings valued at $91,542. Be forewarned, suppliers should be members of your value analysis project teams in their role as experts, but shouldn't ever be delegated the responsibility to conduct your value analysis studies or you risk distorting, adulterating or compromising your value analysis studies.

4. Caving in at the first sign of customer resistance.

Few value analysis studies go off textbook-smooth. Most value analysis project managers find that change is difficult even at mature, enlightened and progressive healthcare organizations. However, that doesn't mean that you cave in at the first sign of customer resistance. As a team leader you must always find a way, with the intervention of your executive management champions, if necessary, to thoroughly investigate any and all of your value analysis team's savings ideas.

As a material manager and now as a consultant, I have had scores of idea killer ploys thrown at me at every turn when I indentified a savings opportunity. Nevertheless, I didn't stop my investigations until I had proven to myself that the savings weren't real, obtainable or feasible for some legitimate reason and not because one of my customers thought the timing wasn't right or they tried the idea before - and it didn't work.

Work in progress

Value analysis methodology is an evolving best practice in the healthcare marketplace, yet can still be considered a work in progress. No one has all the answers to improving a value analysis team's performance, although there are a few basic tenets, as I have suggested, that have been time-tested and demonstrated to work.

When these tenets are applied consistently, I can assure you they will greatly assist you in overcoming many of the deep-seated obstacles that are now holding back your value analysis team's peak performance. This is why we must always be searching, probing and experimenting with new and better ways to manage, motivate and engage our value analysis teams. There is still more to be learned and then applied in this area of our supply chain responsibility.

Author affiliation:

Robert T. Yokl is president and Chief Value Strategist of Strategic Value Analysis In Healthcare, which is a leading healthcare firm in supply and process value analysis. Yokl has nearly 38 years of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the Utilizer Dashboard that extends beyond spend management for deeper and broader utilization savings. For more information, visit www.strategicva. com. For questions or comments e-mail Yokl at bobpres@strategicva.com.

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