January 3


Top 7 Reasons Why Savings Doesn’t Happen in Hospital Value Analysis

By Danielle Miller

January 3, 2022

Healthcare Value Analysis, hospital value analysis, supply utilization, value analysis, value analysis savings, value analysis training

1. Conflicting Priorities Because Something Else is More Important Than Saving Money. Example: Implementing a new contract that saves $3500 versus addressing huge utilization and/or value analysis increases which could result in hundreds of thousands and maybe millions of dollars.

2. Don’t Realize the Impact Big Savings Has on the Hospital’s Bottom Line. For every $1 million in savings you achieve, your hospital has to generate $10-$20 million in new revenue.

3. Talk Away Savings. Instead of researching and validating the savings evidence, we instead postulate and then talk away why the cost or utilization occurs. E.g., our volume was up in the nursing unit, surgery, lab, radiology.

4. Don’t Know the Savings is There. If you don’t know it’s there, then you can’t take any action on it. You need systems in place to alert you to everything from price, spend, and utilization

5. Don’t Have Time to Address the Savings. Too pressed for time to address savings because you are caught up in the day-to-day operations of your hospital’s supply chain department. What’s wrong with this picture?

6. Don’t Believe the Savings are There. This is the biggest loss leader in healthcare. Forever we have been achieving savings so to not believe that more savings are there is truly unbelievable.

7. Think that Price Can Fix Everything. Price is important but a better price cannot cure the fact that you are using too many products, wasting, mismanaging the use of a product, or choosing a feature-rich product. The game has changed; it is about utilization and consumption.

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Danielle Miller

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