Why Healthcare System Value Analysis Programs Underperform

Value analysis is finally getting some traction in healthcare.  According to the Association of Healthcare Value Analysis Professionals (AHVAP), value analysis is “A systematic process to review clinical products, equipment and technologies and to evaluate their clinical efficacy, safety and impact on organizational resources”.  Historically this process occurred within supply chain services.  More and more, value analysis is performed with the input of the clinical staff who work directly with the products managed through supply chain.  It sounds like a great idea.  So why are so many of these programs underperforming, and not meeting the expectations of healthcare leadership?

Reason #1:

Most value analysis programs lack sufficient organizational development.  There are seven core elements all programs require to function successfully.  This is described in greater detail in my recent book, The Value Analysis Program: A How-to-Guide for Physician Leaders on Starting Up a Successful Program.  The seven elements are: Purpose, Engagement, Communication, Infrastructure, Accountability, Leadership and Performance Improvement.  Unsuccessful programs lack one or more of these core elements.  While this list appears obvious to most leaders, what is astounding is how infrequently all of these elements are integrated into a program during its development.  Intentionally building a program with these elements improves its chances of success.

Reason #2:

There are two types of performance improvement.  Most value analysis programs do well with one type, but not both types.  The first type is the obvious one.  A value analysis project is initiated for a product evaluation.  The value analysis team meets, reviews the data and literature, and makes a recommendation for the product.  Following this, the contracting strategy is implemented.  The health care system counts up its cost savings, and the value analysis team takes a victory lap.  There is another type of performance improvement that is essential.  This type asks the question, “How is the value analysis program performing over time?”  Great, you did two projects last year that saved twenty thousand dollars.  You also did the same thing during the prior year.  See the difference.  Each year there are two successful projects, but the program is not demonstrating improvement over time.  This is a must.

You spend a great deal of time, energy and resources implementing a Value Analysis Program.  Ensure the program is structured to be both successful and perform to expectations.

Value Analysis Program

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