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SPANNING THREE DECADES OF VALUE MANAGEMENT LEADERSHIP

June 6, 2002

UTILIZATION MISALIGNMENTS ARE COSTING HEALTHCARE ORGANZATIONS MILLONS OF DOLLARS ANNUALLY

Utilization Savings of 3% to 5% Are Being

Hidden from Your View in Your Supply/Value Chain

Robert T. Yokl, President, The HCP Group, Ltd.

HCP’s studies show that healthcare organizations have savings ranging from 3% to 5% hidden from their view in utilization misalignments (over-utilization or under-utilization of products, services and technologies) that need to be ferreted out if you want to truly control your in-use cost.  It is our estimate that utilization misalignments are costing the average 250-bed hospital $200,000 to $300,000 annually that aren’t even on anybody’s radar screen.  These savings could be hidden in your purchases of glucose test strips, oxygen sensors, forms, labels, gloves, IV sets, electrodes, etc., without you even knowing it.  To assist you with your search for utilization misalignments, our studies have uncovered two primary reasons for utilization misalignments at any healthcare organization: Old Technologies and New Technologies.

Old technologies such as printers, imprinters, IV pumps, diagnostic equipment, etc, that your healthcare organization has had for more than five years are prone to spit out too much paper, rip and mutilate forms, give false alarms, require more supplies than needed and require a huge amount of maintenance to keep operational. A targeted effort therefore should be made to evaluate all old technologies that have gone beyond their useful life to insure that they are still meeting their performance specifications. New technologies such as point of service glucose tests, re-useable and disposable products and automated supply cabinets are purported to be faster, better, cheaper and glitzier, but all too often they are in reality less reliable, wasteful, supply intense and costlier than the technology that they are replacing. These new technologies should also be evaluated to uncover waste and inefficiency in your supply/value chain.

It’s our conclusion after working with literally hundreds of healthcare organizations over the last 16 years, that hospitals universally are wasteful and inefficient. All hospitals (regardless of size) need their methods and practices placed under a microscope continuously to weed out utilization misalignments in the thousands of their products, services and technologies they are purchasing annually. This is a best practice that is an ongoing process, because “things change and people change “ even if our manufacturers and distributors remain the same!

 Copyright © 2002 The HCP Group, Ltd.

Robert T. Yokl, President, The HCP Group, Ltd., has over 35 years of experience as a consultant and manager in the field of Supply/Value Chain Management and is one of the country's leading healthcare experts in value analysis, value engineering and materials management. He is the developer and program leader of the award winning Certified Value Analysis Practitioner Training Program™. Mr. Yokl is also the developer of the healthcare industry's leading ValueNetCentral™ Value Analysis Software. Over the past two decades he has trained thousands of healthcare managers in his patented Strategic Value Analysis™ and Team-Based Project Management™ processes and has assisted scores of organizations in developing their own value management programs. He has published six books, videos and audios on supply/value chain management. His latest book being, “ Strategic Value Analysis™: The #1 Smart Strategy for Taking Cost Out of a Healthcare Organizations’ Supply/Value Chain”.