Suppliers Must Crystalize and Understand the Value Proposition of Their Products

Back when I was a young supply chain (then a “purchasing”) executive, I often bought into the value story that sales representatives told me as a part of the pitch. Back then, and until 1982, a hospital could simply pass the cost of something “new” to the patient or the payor. Those were the days of the great transition from reusable products to disposable ones. I remember a nursing director telling me back then that “everything was going be disposable but the patient.”  

Disposable products, new ideas and better technology often do bring great value to the provider. Unfortunately, many suppliers have not moved forward from the good old days to quantify exactly how. Couple that with the distrust that exists between provider supply chains and medical device companies, and you have today’s result of being confronted with the need to prove the value of goods and services. It shouldn’t be as difficult as folks seem to find it sometimes. Here are a few questions to assist you through the thought process from a supplier perspective:

  • Is my value proposition (for the product) clear and easily understood?
  • Can a reader figure out and evaluate my value proposition in a clear and transparent way?
  • Have I done a good job of differentiating the value of my goods and services from my competition?
  • How does the value of my goods differ from what is in use by the customer today?
  • Is my product really “something new”?  If it is, how do I define and communicate the new value proposition?
  • What is the best means for preparing my sales story for easy translation at the Value Analysis Committee?  Sure, I have a “VaC Pack” now, but is it easily and quickly understood?
  • What lingering questions could remain about my products as they are discussed by a Value Analysis Committee?

Understanding meaningful Value Analysis is important for all aspects of the healthcare supply chain, from the production of goods and services through their consumption. Only through improved collaboration will the “clock speed” of value analysis accelerate to the point of making substantial differences in the cost of healthcare goods and services.