Talking About Value Analysis ALONE Misses the Point

Talking About Value Analysis ALONE Misses the Point; is that new technology a game changer?

It is always interesting to look at new buzz-words and fads in healthcare. Over my 40+ year healthcare career, I’ve watched a whole variety of concepts come—and go, along with an alphabet soup of acronyms. Finally, healthcare is embracing Value Analysis.  

Value Analysis isn’t a health care concept, nor was it invented by healthcare professionals. It was created by Lawrence Miles during World War II. Larry was employed as an engineer by General Electric, and he designed VA to stretch scarce raw materials and parts, as well as to reduce waste and simplify operations. His desired outcome? “To increase customer satisfaction and create added value.”

Over the years many healthcare providers have attempted to more fully utilize Value Analysis. Unfortunately, the results have been a bit mixed, though some health systems have enjoyed success using collaborative processes that include key individuals, with none more important than the physicians and clinicians who use the products undergoing scrutiny.  

Sadly, many healthcare providers apply the tag Value Analysis to processes that are little more than new products committees that serve as a barrier for new technology and are mostly focused on the price of a product. This misses the point of using value analysis to gain advantage by:

  • Examining and reducing process costs;
  • Eliminating waste of product while examining how it is utilized;
  • Improving clinical and procedural outcomes; and by
  • Revising processes that accompany the materials being used.

Some providers miss the point of combining the analysis of products with systems and services that products are utilized in. At the same time, we are finding that many medical companies are trying to understand the concept of VA, while not understanding how their own goods and services stand-up in a VA with their competitors.  

As a result, Access Strategy Partners takes a holistic view of Value Analysis, both from the provider and supplier side, combining it with health economics and technology assessment to truly understand our clients’ needs and responses to the market from new technology. This is necessary because when you have seen one VA process in a health provider, you have seen one process. Unfortunately, many overlook the strategic, cross-functional processes that VA should be.

From a supply chain perspective, it is always desirable to show a reduction in price. Perhaps one of VA’s most important tenets though is to examine how well the product holds up and performs against competitive products and older procedures. A lower price could be disguising higher costs down the road that many folks fail to examine and understand during their process.

ASPI can help you access and evaluate many important reimbursement, value, and tech assessment questions that create a meaningful value proposition for your company—along with providing an explanation of a product’s value story to your customers.