Here are some future considerations for value analysis in light of what COVID-19 has taught us.
1. Value Analysis as a necessity
COVID-19 has overwhelmingly demonstrated the need for effective value analysis infrastructures and processes. Throughout the pandemic, the concept of value has been dissected, analyzed, and referenced with a sense of urgency as healthcare systems have put forth extensive efforts to deliver the best care to patients. The newfound reality surrounding value is that it is no longer just a good practice; it is a necessity. More than ever before, systems are required to deliver care that is appropriate despite supply chain constraints.
2. Space for change in value analysis structures
In retrospect, the relative effectiveness of a system’s value analysis processes will be evaluated by how flexible and communicative they were in a time of urgency. For many systems, the pandemic will illuminate how effective and viable their system is. For others, essential gaps in processes will be revealed through lengthy approvals and procurement and can be used as a springboard to improve value analysis efforts. During the pandemic, time was the most precious resource as bottlenecks in the funnel could have dire consequences. For even the most effective systems, communication and flexibility has been tested in an unprecedented manner as results had to be delivered at a record pace. Technology and software were critical assets for VAC efforts as physical limitations threatened to impede progress. Moving forward, systems may consider different processes as they ask, “How can we be most flexible? How can we improve communication? How can we better leverage technology?” For some, this may mean formal VACs give way to task initiatives that collaborate in real time where the individuals with the most relevant expertise are empowered to make decisions quickly. Education and technological investment will likely play important roles moving forward so that the right people will be ready at the right time. Click here to see how GreenLight Medical’s cloud-based software can support your value analysis infrastructure.
3. Value analysis as more than just efficiency
COVID-19 has amplified the reality that value analysis is not simply an efficiency tool but should also be one focused on overall vigor and strength of the larger system. For example, an army solely focused on efficiency would yield lean numbers while one focused on vigor would focus on a system’s strength in the case of increased adversity. Within health systems, this means treating value analysis as more than a cost-saving measure by using it as an opportunity to create a vigorous system that is prepared to handle an “attack” in the supply chain. In many cases, this reality will highlight the need for predictive analytics. As systems reevaluate priorities and what has lacked appropriate representation within their process in the past, initiatives will include a review of what processes are actually being reflected in their policies and what is needed to create a more rigorous infrastructure such as predictive analytics.
4. Balancing financial recovery with innovation
For many systems, the road to financial recovery will be at the forefront of priorities after suffering from great losses in the past year. COVID-19 costs matched with decreased revenue from normal business such as elective surgeries have cost hospitals and health systems an estimated 200 billion between March 1 and June 30. Challenging decisions balancing internal stability and innovative care may lie ahead for systems already operating on lean margins. For some, remaining sustainable may mean stricter evaluations as they prioritize more critical requests.
5. Value analysis as a tool for sustainability
Another way in which the pandemic has altered the evolving role of value analysis is the pressing subject of sustainability. With systems struggling to operate within increased budgetary constraints, the idea of being sustainable is a pressing reality and the need for value analysis leaves no room for excuses. For smaller practices where revenue is down and costs remain high, consolidation through mergers and acquisitions may be accelerated. For the larger healthcare landscape, there may be a balancing act between economies of scale and potential monopolization.
6. Prioritizing standardization
For most systems, the concept of standardization has been present within value analysis efforts. However, the pandemic has elevated the importance of standardization and mitigated unnecessary variation. During COVID-19, this meant standardizing PPE products with suppliers so that volume could be achieved. This led decision makers to break down what was absolutely needed and where customization was not bringing value. This urgent need for standardization offers the opportunity for systems to continue evaluating the place of variety in their value structures.
7. Product need vs. product want
8. Alternative suppliers and products
As the pandemic forced many systems to seek new alternative products and supplier relationships due to shortages, COVID-19 opened the doors to a new kind of supplier and product selection. Moving forward, this shift will provide the opportunity to reevaluate products for specific ways in which it matches the system’s needs; as a result, product unavailability, process disruption, and resulting substitutions will pave the way for alternate suppliers and products as assessment stems from need identification and availability.
9. Reevaluation of supplier relationships
10. Consideration of risk
The responsibility of risk may emerge as a new subject as systems have experienced internal pressure to deliver product amist shortages. Newfound pressures on supply chains have illuminated that hospitals assume risk if suppliers can’t deliver on their contracts. Therefore, it is up to the system to seek resources elsewhere if suppliers can’t fulfill orders. However, as systems have scrambled to provide essential products, they may begin to question who should bear the risk in such situations. Moving forward, systems might call upon suppliers to assume risk.