How to Sort Out Your Best Savings Ideas

All healthcare organizations have big, small and breakthrough savings ideas that they need to implement as fast as possible. However, from my experience, all of these savings opportunities are given the same weight or importance without any thought to prioritizing them for a speedy resolution and optimum gain. 

For instance, I have seen value analysis teams give a group purchasing contract for nursing floor gloves, with a three percent savings opportunity, the same ranking in prominence as a 15% standardization of surgical implants. Consequently, the value analysis team will take weeks or even months to implement their new nursing floor glove contract while leaving their surgical implant conversion waiting in the wings.  This common practice is neither practical, cost effective or time centric.

A much better way for a healthcare organization to sort out their big, small and breakthrough savings ideas is to envision a pyramid with three levels of savings opportunities.  At the base are small savings ideas with three to five percent savings potential that can be achieved almost overnight. The middle of the pyramid will be reserved for savings opportunities of 7% to 15% that will require some time and effort to be properly implemented. At the pyramid’s peak are those vital few breakthrough savings opportunities estimated to be above 15% that will need to be artfully executed for maximum results. 

To utilize this pyramid concept to its full benefit, it is also important to align your value analysis teams’ activities around the prioritization of your savings ideas that I have just described vs. by product line (clinical, surgical, technology and support value analysis teams) which is most common today. This can be best accomplished by having only three value analysis teams: One dedicated to base-level pyramid savings, one assigned to middle-level pyramid savings and a third committed to top-tier pyramid savings.  This scheme will not only enable your hospital, system or IDN to quickly sort-out and prioritize your savings ideas, but to harness the appropriate resources to bring about your savings at a lightning speed.

What I’m suggesting here is a revolutionary idea, since it goes against the conventional wisdom of what every healthcare organization is doing now in the country.  But if your hospital, system or IDN is looking for a new way to ramp up your savings at an even faster pace I can think of no better way to do so.  All it takes to give it a try is for you to realize that the way we in healthcare are triaging our big, small and breakthrough savings isn’t working at the speed or optimum gain that is necessary for your healthcare organization to keep ahead of revenue reductions.  Then it will make sense to you!

Robert T. Yokl

Chief Value Strategist

Strategic Value Analysis® in Healthcare

Be the first to comment on "How to Sort Out Your Best Savings Ideas"

Leave a comment

Your email address will not be published.