becomes what the title implies, i.e., analyz- ing the ‘value’ of doing something – and ‘value’ includes more measurements than simple price. The Association of Healthcare Value Analysis Professionals (AHVAP) has etremely clear-cut defi nitions and guide- lines as to what constitutes a legitimate Value Analysis operation. The key is to have a title mean something. You can’t just take down the Standardization Commit- tee sign and replace it with one that says, ‘Value Analysis Committee’ and have a legitimate VA function any more than you can take down the ‘Materials Management’ sign, replace it with one that says ‘Supply Chain’ and have a functional supply chain operation.”


Supply Chain executives, leaders and professionals should look at the five- year-old Value Analysis Maturity Curve, which was published in 2015 through a collaboration between the AHVAP and the Strategic Market Initiative (SMI), insists value management expert Barbara Strain, CVAHP, Managing Principal, Barbara Strain Consulting LLC. (See Figure, below.) “For so long the notion of basic patient care products evaluation was synony- mous with value analysis with a focus on price, along with the vestiges of prod-


Barbara Strain


uct standardization to eliminate variation,” Strain added.


During several live and virtual workshops and panel discussions the past 18 months, Strain recalls sharing the maturity curve and asking participants to place themselves along the curve. She found that roughly 75 percent of provider value analysis partici- pants ranked themselves between Levels 3 and , while fi ve percent selected evel  and seven percent Level 5. Suppliers, who based their positioning on their perceived readiness to address customers, posted simi- lar results within a few percentage points, according to Strain. Enter COVID-19.


Prior to 2020, healthcare value analysis was evolving to the point that providers recognized and understood it was not a person, a team or a program, Strain cites. “Value Analysis is a profession based on proven processes that move organizations from one level of maturity to the other all the while improving quality of care at reason- able costs,” she added.


“In 2020, however, healthcare leaders,


physicians and clinicians quickly became aware of the value [that] value analysis professionals play,” Strain continued. AHVAP hosted a podcast series from mid- April through mid-July 2020. The content


T he V al u e A n al y s is Matu rity Cu rv e V A L UE


V A L UE


P ROCE SS Strate g y


N O No formalprocess


Purchases drivenby demand Minimal criteria


Many brands/ duplicationfor same use


A N A L Y SI S N OV I CE


P rice Strate g y Often singlesite


Process begins with review of new products


V.A. Committee created


Cost reduction is primary driver of decisions


Reliance on supplier- provideddata


I N T E RME D I A T E P rice &


A N A L Y SI S V A L UE Stan d ard iz ation


Data driven decisions based on usageacross all sites


Strives for system-wide involvement


Clinician engagement with supply chain limited.


V.A. Committeemakes finaldecisions


Limited development of objective non-financial criteria


A N A L Y SI S Stan d ard iz ation


Q u al ity , Was te Re d u ction ,


Focus moves beyond cost reduction


Clinical andsupply chain integration


Reduce or eliminate waste andvariety


Objectivenon-financial criteria strives to use evidence


System device formularyestablished


Incorporates forumfor new technology assessment


PRODUCTS & SERVICES V A L UE


A N A L Y SI S F UT URE


Util iz ation , Re d u ce d


V ariation , P op u l ation


Man ag e m e n t


Clinically driventeams target utilization/ variation


Data-drivendecisions utilize information from: -EMR -MMIS -Nationalmetrics -Outcomeprotocols


Policy requires that all decisions are evidence- based


Created by AHVAP & SMI task force published in 2015


ranged from vetting supplies and suppliers to lab tests, communication, collaboration and community outreach. The subject matter experts in the last few podcasts were value analysis professionals from various sized provider organizations that were asked, “What is value analysis like today?” Strain recalls the participants expressing a contex- tual understanding of the process against the backdrop of the pandemic.


Strain also envisions a “new value analy- sis” emerging from 2020 that will spend time differently on the medical/surgical supply process and more time on “need-to-have” initiatives that will move organizations to population health and quadruple aim maturity levels.


Alternate states


The Resource Group, which provides a variety of supply chain and support ser- vices to the members of Ascension Health, developed their own alternative to what they term the “traditional” Value Analy- sis process, stripping out the “emotional” attach- ments, according to Scott Caldwell, TRG President and CEO. “The organizations that we serve asked us to inno- vate a means by which products and services could be evaluated objectively, without the emotional attach- ment, to brands and brand representatives oftentimes present throughout the process,” Caldwell stated. “Our User-Directed Strate- gic Sourcing process begins with Decision Teams and Affinity Groups comprising clinicians and end users who evaluate products and services based on attributes. By defining the attributes required, we identify a wider range of clinically accept-


Scott Caldwell


able products that are well established in the market but may not be top of mind for cli- nicians who may be considering a singular brand with which they may be comfortable and familiar. While this may seem similar to Value Analysis, evaluation of attributes of a product rather than the evaluation of a product as a whole has proven highly effective. The process has resulted in the establishment of a comprehensive and highly accepted contract portfolio that has delivered $1.2 billion in annual savings to our participants.” Robert T. Yokl, Veteran supply chain exec- utive-turned- value-analysis-consultant, and Founder, CEO and Chief Value Strategist, SVAH Solutions, embraces more of a purist philosophy of value analysis, hearken- ing back to the late 1940s and what emerged at Gen- eral Electric Co.


“When asked about this topic, I always like to say


Robert T. Yokl


that value analysis is one of the most misunderstood terms in supply chain management, ol noted. By defi nition, value analysis is the study of function and the search for lower cost alternatives as described by Larry Miles, ‘the Father of alue nalysis. nfortunately, this defi ni- tion has been lost in translation in health- care. Instead, in healthcare value analysis is just another name for ‘product evaluation,’ thereby misinterpreting the true purpose of value analysis, which is to reinvent the way we specify, analyze, and classify our products, services and technologies. I sug- gest that VA practitioners read Larry Miles’ book, ‘Techniques of Value Analysis and Engineering’ if they want to gain the full benefi ts of this powerful cost and uality management technique.” HPN


Page 58 hpnonline.com • HEALTHCARE PURCHASING NEWS • February 2021 57


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