An Optimized Value Analysis Program

Healthcare reform will require you to boost your VA performance significantly

The conventional wisdom says that 11 to 20 percent of your healthcare organization’s operating budget needs to be cut to survive the Medicare revenue reductions that are imposed in the Affordable Care Act (ACA). According to a recent study by Healthcare Leaders Media of hospital CEOs, the top three areas that these cuts will be coming from are: process improvement, labor efficiencies and supply chain expense reductions. As I see it, value analysis touches on all three of these cost-control targets if your value analysis program is organized, systematized and operationalized to do so.

We all know that value analysis can be a powerful cost, quality and safety improvement tool, but has your healthcare organization really optimized your value analysis program to meet the new ACA challenges? Do you have the right structure, with the right people, with the right process, looking at the right things? Too often the answer to one or more of these questions is there is room for great improvement in what we have been doing in some or all of our value analysis program’s elements.
The following is a guide to help you to understand the key elements that need to be optimized in any and all value analysis programs:

  • Do you have a value analysis steering committee composed of senior management representatives (that meets monthly) to monitor, guide and arbitrate disputes to facilitate your value analysis teams? If not, you will find that without this mission critical committee that your value analysis team’s problems and disputes linger for months, even years without being resolved.
  • Is your value analysis team’s activities structured around a project management model? This means assigning each of your team members to value analysis studies and holding them accountable for their results. We have found that this one change in your value analysis team structure will up your team’s overall performance by leaps and bounds.
  • Do you have the right people (organized, enthusiastic, reliable, punctual, analytical, takes initiative, welcomes change, and looking for growth and recognition) on your teams?Do you have a step by step, defined value analysis process that is followed and repeated by your team’s project managers on each and every value analysis study? If not, you will discover you are reinventing the wheel on each of your VA studies and then going off course too often.
  • Are your value analysis team members looking at your supply chain processes, possible labor reductions and utilization management? This is where the biggest savings, quality and safety opportunities reside, not in price.
  • Over the next few years your healthcare organization’s management will be looking to supply chain management for a large chunk of the savings that they require to reduce their operating budget. If you are honest with yourself, this is not going to happen with price alone. Only by optimizing your value analysis program to look beyond price can you bring about the huge supply chain savings that your hospital, system or IDN is looking for to survive in this ever-changing healthcare environment.

About the Author

Robert T. Yokl
Robert T. Yokl is president and chief value strategist of Strategic Value Analysis® In Healthcare, which is the acknowledged healthcare authority in value analysis and utilization management. Yokl has nearly 38 years of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the new Utilizer® Dashboard that moves beyond price for even deeper and broader utilization savings. For more information, visit For questions or comments, e-mail Yokl at