Value Analysis: How to Succeed in the New Healthcare Environment

Value Analysis, or the study of the real and perceived worth of an item and how this can be changed or applied to help a business, is an increasingly important technique for the healthcare industry.  Recent changes in the healthcare environment, from major new regulations and taxes to significant coding and billing modifications, have created a situation where understanding the value of goods and services to determine how well they fit in with the new environment can have an even more significant impact on physicians and suppliers than usual.

Determining What to Analyze

The first step for succeeding through the use of Value Analysis is to determine which elements of the business can be modified and which cannot.  For example, leasing office or production space is not optional for many companies, but it may be that renting a smaller (or larger) space is more worthwhile.  Value Analysis is focused on the worth of all elements of a process, a product or a service of the business.  A large, well-decorated lobby may look nice, but it may not actually be necessary for a particular hospital, clinic or physician practice.  On the other hand, if it attracts more patients it may have value.

In most situations, there are few elements of a business that cannot benefit from a close examination of their value.  Even if a company does not intend to make changes, understanding the value of each element of its business can help to make more informed decisions in the future.

The Analysis Itself

The overall analysis of value can be performed in many different ways, some of which are more appropriate for a particular facility than others.  A physician may find significant value in taking time with a patient to learn about their overall condition, while a manufacturer may wish to determine if a different material would be more suitable as an element of a particular product.  After deciding what to analyze, the next step is to determine how to analyze it.  Working with C-suite administrators, purchasing, physicians, service line management, and end user staff in a collaborative process can help ensure that quality care is maintained or improved while associated costs are decreased.  Manufacturers should likewise work collaboratively with their administration, purchasing, production, and marketing divisions when performing Value Analysis.  By modifying the technique used based on the situation, companies can ensure that they are asking the correct questions and getting the results that will be the most useful to their decision-making processes.  This is essential for succeeding in the new normal healthcare environment.

Interpreting the Results

In a time of uncertainty and change within the industry, the temptation to continue with what has always worked in the past can limit a company or even cause it to falter.  However, Value Analysis exists for the purpose of making companies stronger and more successful than they were in the past.  In order to succeed through the use of Value Analysis, it is important to be honest with the results.  Additionally, there is no reason to limit the analysis to current practices.  This can actually be detrimental to the progress and continued success of the company.  Instead, when a change is indicated as being necessary, the best solution may involve several different options that can be analyzed for their value and chosen from once the analysis has been done.

By combining the elements of deciding what to analyze, how to analyze it, and what to do with the results, physicians and manufacturers alike can work together to succeed in a healthcare environment that requires change.  Value Analysis helps to ensure that the changes are the correct ones. 

Image: freedigitalphotos.net