Tapping into their expertise, know-how and ingenuity to create more value
The common practice in value analysis circles is to have sales representatives make presentations to their value analysis team on a new product, service or technology to inform the team of the features and benefits of a new modality. While this might seem to be a shortcut to learn more about a new product, service or technology, it is really an impediment to value-based purchasing. Why? Because it’s not a value analysis team’s job to preview new products, services or technologies, but instead to set functional parameters on products, services and technologies and then search for lower cost alternatives that meet or exceed the required functions based on the specifications provided by their customers.
This is where you need to plug your sales reps into your value analysis process. For instance, one of our clients determined, based on our utilization benchmarks, that the I.V. catheter that they were buying was three times the cost (not price) of their peers. This fact triggered the creation of a value analysis sub-team that met with this client’s nursing staff to functionally specify what was required in performance on their I.V. catheter. With these specs in hand, the hospital’s materials manager searched the marketplace for a functional (not brand name) equivalent I.V. catheter. After several weeks of discussions and brainstorming with sales representatives, he came up with an exact match at a $91,322 annual savings. This is what value-based purchasing is all about!
Value analysis works best when you tap into the expertise, know-how and ingenuity of your sales representatives to create value for your hospital, system or IDN. They know their products, services and technologies better than you do. Why not use this valuable resource to lower your costs and improve your quality?
We often recommend to our clients, when we have identified a utilization misalignment in their supply streams, to call their sales representative for this product line and request that an expert be called in to review their methods and practices. We frequently do this with I.V. sets with the result that our client’s suppliers routinely uncover thousands of dollars of hidden savings in the way they have been doing business.
When I was a supply chain manager I regularly set forth challenges for my sales representatives to find new ways to lower the cost and improve the quality of the products, services and technologies I was buying from them. With few exceptions, they came back to me in a week or two with lower cost alternatives to what I was buying previously. Value analysis teams need to do the same; set forth challenges for their sales representatives that create more value (i.e., quicker, safer, better, cheaper) for your healthcare organization. Value-based purchasing is raising the stakes in healthcare, therefore we must ask our sales representative to provide more value to keep us in the game.