Inside ASHE - Fall 2017 - 59

Identify the
service areas
to be
evaluated

Gather the
data needed
to measure the
outcomes

Identify your
team members

Select your
committee
chairs

Establish
a meeting
cadence
with regular
report-outs

Determine
opportunities
challenge the
status quo

Validate and
analyze the
data

Re-bid,
negotiate,
collaborate,
and
communicate

Report your
findings to
senior leadership

Implement
each business
strategy

paradigm shift from cost to value added
within their organization? The answer
may be through implementation of the
concept of value analysis.
Value analysis is a process that looks at
current operating expenses to uncover
potential cost savings or reductions that
won't negatively affect the organization.
At Texas Children's Hospital in Houston,
the goal of value analysis is to optimize
both quality and cost for all products
the hospital provides and procures
through new product requests, product
standardization, and benchmarking of
price to other hospitals. The concept
of value analysis is frequently applied
by the supply chain management
department to items typically found
in the clinical service domains, but can
also be used to identify cost savings
opportunities in non-clinical areas.
During fiscal year 2016, a review of
hospital financial performance revealed
a significant change in payor mix, which
resulted in a decrease of net operating
margin. To offset the decrease in
operating margin, a number of strategies
were discussed including deferring
filling vacant positions, not opening new
positions, and reducing costs through a
program of value analysis.
The organization chose to implement
a robust value analysis program that
focused on five major service domains:
* Hospital-based services
* Clinical products and equipment
* OR products and equipment

* Pharmacy cost management
* Purchased services
To begin the process of value
analysis, a set of coordinating teams
were established for each domain with
a particular focus on cost reduction.
These teams were led by seasoned
hospital directors with oversight
from a hospital executive to ensure
team engagement, collaboration, and
forward momentum. Each team was
required to use standard tools for data
collection, business case development,
and to write an executive summary.
Teams were required to report out
at scheduled intervals to ensure that
progress toward established savings
goals was being achieved and if not,
what barriers needed to be removed to
make the required progress.
Another strategy that was employed
by the value analysis team was the
creation of high impact teams (HITs).
These teams are designed to be high
impact and short duration to bring
savings to the implementation stage at a
faster pace. Teams are smaller in size than
the standard committee structure and
are composed of three to five subject
matter experts, one of whom is an
executive within the organization. These
teams have a four-week time horizon,
and data collection and analysis are at an
accelerated pace, as well. Standard tools
are used for collecting data, preparing
the business case, and developing a
high-level executive summary.

High Impact Team
Composition
Executive
Director of supply chain
Project manager
Subject matter experts
The domain of purchased services is
the area where facility managers can
make the most contribution to value
analysis. In this domain items such as
furniture costs, contractor bill rates,
utility costs, hardware and software costs
and supplies can be found. These items
lend themselves to the formation of HITs
to drive savings into the organization in
the shortest possible time.
By championing savings for the
organization and through regular
reporting to senior leadership, facility
managers can begin to redefine their
roles within the organization. So how
does the facility manager get involved
in value analysis? Begin by reaching out
to the executive or director of supply
chain management and express your
interest in cost reduction activities that
benefit the entire organization. Share
your ideas for savings opportunities and
get involved with one of the committees,
perhaps purchased services. Request to
be assigned to a high impact team and
help drive savings for your organization.
Make value analysis a part of your
daily operations.
www.ashe.org 59


http://www.ashe.org

Table of Contents for the Digital Edition of Inside ASHE - Fall 2017

Letter from the president
What’s new
Pop quiz
The measurement of a health care facility manager: How do you define success?
Creating a program to identify and monitor pressure dependent spaces
Critical considerations for specifying a building automation system for health care
Bright ideas: LED renovation at Boulder Community Health
Selecting the right fire extinguisher for operating rooms
Still battling reheat energy in hospitals: Short- and long-term ideas for hospitals’ biggest energy use
The financial impact of variable speed ventilation controls in hospital kitchens
Data driven culture fuels University of Florida Health’s success in energy and operational optimization
Energy management in a critical access hospital: How Barnesville Hospital reduced energy consumption by 39 percent
Value analysis: Improving operating margin through cost savings
Member spotlight
Advertisers’ index
Inside ASHE - Fall 2017 - Intro
Inside ASHE - Fall 2017 - bellyband1
Inside ASHE - Fall 2017 - bellyband2
Inside ASHE - Fall 2017 - cover1
Inside ASHE - Fall 2017 - cover2
Inside ASHE - Fall 2017 - 3
Inside ASHE - Fall 2017 - 4
Inside ASHE - Fall 2017 - 5
Inside ASHE - Fall 2017 - 6
Inside ASHE - Fall 2017 - 7
Inside ASHE - Fall 2017 - 8
Inside ASHE - Fall 2017 - Letter from the president
Inside ASHE - Fall 2017 - What’s new
Inside ASHE - Fall 2017 - 11
Inside ASHE - Fall 2017 - Pop quiz
Inside ASHE - Fall 2017 - 13
Inside ASHE - Fall 2017 - 14
Inside ASHE - Fall 2017 - 15
Inside ASHE - Fall 2017 - 16
Inside ASHE - Fall 2017 - 17
Inside ASHE - Fall 2017 - The measurement of a health care facility manager: How do you define success?
Inside ASHE - Fall 2017 - 19
Inside ASHE - Fall 2017 - Creating a program to identify and monitor pressure dependent spaces
Inside ASHE - Fall 2017 - 21
Inside ASHE - Fall 2017 - 22
Inside ASHE - Fall 2017 - 23
Inside ASHE - Fall 2017 - Critical considerations for specifying a building automation system for health care
Inside ASHE - Fall 2017 - 25
Inside ASHE - Fall 2017 - 26
Inside ASHE - Fall 2017 - 27
Inside ASHE - Fall 2017 - Bright ideas: LED renovation at Boulder Community Health
Inside ASHE - Fall 2017 - 29
Inside ASHE - Fall 2017 - 30
Inside ASHE - Fall 2017 - 31
Inside ASHE - Fall 2017 - 32
Inside ASHE - Fall 2017 - 33
Inside ASHE - Fall 2017 - Selecting the right fire extinguisher for operating rooms
Inside ASHE - Fall 2017 - 35
Inside ASHE - Fall 2017 - 36
Inside ASHE - Fall 2017 - 37
Inside ASHE - Fall 2017 - 38
Inside ASHE - Fall 2017 - 39
Inside ASHE - Fall 2017 - 40
Inside ASHE - Fall 2017 - 41
Inside ASHE - Fall 2017 - Still battling reheat energy in hospitals: Short- and long-term ideas for hospitals’ biggest energy use
Inside ASHE - Fall 2017 - 43
Inside ASHE - Fall 2017 - 44
Inside ASHE - Fall 2017 - 45
Inside ASHE - Fall 2017 - The financial impact of variable speed ventilation controls in hospital kitchens
Inside ASHE - Fall 2017 - 47
Inside ASHE - Fall 2017 - 48
Inside ASHE - Fall 2017 - 49
Inside ASHE - Fall 2017 - 50
Inside ASHE - Fall 2017 - 51
Inside ASHE - Fall 2017 - Data driven culture fuels University of Florida Health’s success in energy and operational optimization
Inside ASHE - Fall 2017 - 53
Inside ASHE - Fall 2017 - 54
Inside ASHE - Fall 2017 - 55
Inside ASHE - Fall 2017 - Energy management in a critical access hospital: How Barnesville Hospital reduced energy consumption by 39 percent
Inside ASHE - Fall 2017 - 57
Inside ASHE - Fall 2017 - Value analysis: Improving operating margin through cost savings
Inside ASHE - Fall 2017 - 59
Inside ASHE - Fall 2017 - Member spotlight
Inside ASHE - Fall 2017 - Advertisers’ index
Inside ASHE - Fall 2017 - 62
Inside ASHE - Fall 2017 - cover3
Inside ASHE - Fall 2017 - cover4
Inside ASHE - Fall 2017 - outsert1
Inside ASHE - Fall 2017 - outsert2
Inside ASHE - Fall 2017 - 70
Inside ASHE - Fall 2017 - 71
Inside ASHE - Fall 2017 - 72
Inside ASHE - Fall 2017 - 73
Inside ASHE - Fall 2017 - 74
Inside ASHE - Fall 2017 - 75
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