Value Analysis Analytics

The “so what” factor

A recent survey of C-level executives by AHRMM emphasized their expectations “that having data and metrics is not enough; supply chain leaders need to identify the ‘so what’ (factor) of the data. They need to present the implications of the measures and why they are meaningful to the (healthcare) organization and its long-term success.”

In practice, these C-level executives are asking their supply chain leaders to refine, interpret and then present data in an insightful way. We have found the most successful and discerning way to do so is to measure, through benchmarking, where a hospital, system or IDN resides on the cost/utilization continuum for any particular commodity group. In the case study shown in Figure 1, we compared a hospital’s exam gloves utilization per CMI adjusted patient day to their peers and even to a teaching hospital to reveal how misaligned (by as much as 49 percent) they were on the cost/utilization continuum.

These data sets always create an “aha” reaction from our client’s customers when they review this information. But data isn’t enough. We now need to interpret this data for our clients starting with asking the question “why are they different” from their peers? We found that the easiest way to do so is to have a mini-seminar with our clients to describe the differences we see in their practices vs. their peers.

For instance, the lowest cost hospitals in the case study have moved away from hypo allergic exam gloves to vinyl gloves, and they strictly enforce their policy on who is to wear hypo allergic exam gloves and purchase the lowest glove quantity per box to prevent waste. We point out to our clients that these are the characteristics that contribute to these best practice hospitals having low cost/utilization on their exam gloves. We then recommend that our clients emulate these healthcare organizations to dramatically reduce their own exam glove cost/utilization.

Do you see how this scenario (e.g., refine, interpret and present) changes the “so what” reaction most supply chain professionals receive when showing data or metrics to their customers? It’s much better to create an educational environment where you are interpreting the data for your customers on why they are at the high end of the cost/utilization continuum.
Working in the supply chain for a few decades, this value analysis analytics methodology that I have just discussed has been the easiest to sell to even the most vehemently opposed department head or manager that we have encountered over the years. By the way, supply chain management is all about selling your ideas, proposals and concepts, not forcing your will on others.

That’s why this technique is a perfect tool to add to your supply chain toolbox: It’s intuitive, rational, insightful and educational. No longer will you receive the “so what” comment when presenting your data or metrics in the future if you remember to refine your data, interpret it and present it in an educational environment. Isn’t this the way you would like to receive quantitative information yourself?

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