What is Value Analysis
Value Analysis is a practice hospitals use to evaluate medical products prior to purchase. It is a fairly new concept but many hospitals choose to adopt this practice for its clinical, safety, operational, and financial benefits. A Value Analysis process can be one of the most powerful and influential tools that a healthcare system can employ. By understanding the benefits, hospitals can significantly improve their supply chain operations and bottom line.
Value Analysis benefits- just to name a few:
- Evaluate all aspects of a product/device/supply
- Hospital purchasing power
- Involve all key stakeholders
- Engage subject matter experts, clinicians, and physicians
- Enable team alignment and transparency
- Manage spend
With the rising costs of medical supplies paired with the high volume of medical products on the market, assembling a Value Analysis Committee (VAC) is essential for hospitals to reach its financial and operational goals.
Why Value Analysis Committee’s Exist & Who Is Involved
Previously, some hospitals focused on physician preference items (PPI), which often led to higher spend and excess inventory. In recent years, hospitals have shifted decision-making power to include VACs as a way to focus on value instead of volume.
Commonly involved VAC members:
- Supply Chain
- Service Line Leadership
- Financial Analysts
- Item Master Team
With VACs, subject matter experts are empowered to evaluate specific product details in a more holistic approach while collaborating with physicians and clinicians so that the hospitals make data-backed, defensible decisions.
“GreenLight has been instrumental in the rebranding and relaunching of our Clinical Quality Value Analysis program. The cloud-based software has allowed the opportunity to have one platform to share information across our entire organization, administrators, physicians, clinical staff and supply chain.” –Melanie Stone: System Executive Director Clinical Quality Value Analysis at WellStar Health
Value Analysis Committees’ Primary Concerns
Cost – Value Analysis permits hospitals to make fiscally responsible purchases. Committee members who have financial and supply chain expertise allow the organization to purchase appropriate product volumes to maintain adequate inventory while managing spend.
Clinical Evidence – VACs research the clinical evidence to determine if one product shows notable value and benefits over another. In previous processes, physicians may not have had the time, information, or flexibility to compare the clinical advantages of medical devices.
Safety and Quality of Care – In the same manner as clinical evidence, VAC members typically conduct safety research on products, using the FDA’s MAUDE database, and consider outcomes tracking before purchasing.
Value Analysis can be a powerful tool when properly executed. Recognizing the intricacies and the way Value Analysis Committees operate may be the difference between experiencing success or not. For hospitals, understanding the importance and necessity of Value Analysis will help lead to future operational wins.