Is Everything You’ve Heard about Value Analysis True?

I’ve heard a lot of frustration in my conversations with suppliers over the benefits of value analysis and how they fit into this powerful evaluation/selection process that is slowing down or even blocking their efforts to sell their products, services or technologies.  Suppliers are confused and irritated by the different protocols that each healthcare organization has established to manage their new product, service or technology approvals. And they are unsettled by the demands made on them to prove that their offerings are as advertised, even if they have a GPO contract that has been vetted by a GPO peer group.  So where does the truth lie with this posturing?

The simple answer is that healthcare organizations can no longer give a blank check to their department heads and managers to buy whatever they think is best for their departments in this age of shrinking financial resources.  Hospitals, systems and IDNs need a mechanism, which they call value analysis, to evaluate/select the “best value” products, services and technologies that meet their exact functional requirements.

These value analysis studies are generally performed by a team or committee of hospital experts who are charged with vetting their department heads and manager’s requests and even their GPO’s offerings for their healthcare organizations. This is especially true when a VA team is evaluating a GPO contract offering since it might not be a good fit for their healthcare organization, even though the same GPO contract makes good sense for many of their peers. This is not a delaying tactic, but a necessary reality of healthcare today!

Another critical point to comprehend is that no value analysis program is a mirror image of another; they are ALL different due to their culture, leadership, training and value analysis team structure and protocols.  Where one value analysis team may be very structured, organized and effective, another may be unhurried, disorganized and counterproductive.  It’s a roll of the dice, on how a value analysis team will operate at a healthcare organization.

I can understand from a supplier’s point of view how value analysis can be seen as a blocking or stalling tactic by healthcare organizations, but let me assure you that this behavior isn’t a conspiracy against suppliers.  It is just growing pains…

The best way I know of for a supplier to interact with these various value analysis team models is to be forthright, accommodating and above all patient.  Additionally  the supplier can becoming a “Value Analysis Advisor” to these value analysis teams by offering to perform value analysis studies for their customers.  If this is done this tactic will provide a window into how customers are employing their products, services or technologies that compete with yours and then give the ammunition to gain approval (if suppliers product, service or technology is the right fit) from any and all value analysis teams for the supplier’s offering.  The lesson here is that supplier shouldn’t fight value analysis teams, they should join them!

Robert T. Yokl

Chief Value Strategist

Strategic Value Analysis® in Healthcare

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