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An emerging best practice worth noting
Historically, healthcare supply chain and value analysis professionals are estimating projected and promised savings on price, standardization and value analysis projects on their monthly, quarterly or annual savings reports. Yet supply chain and value analysis professionals' estimated savings in today's healthcare economy isn't good enough.
To this end, what I'm calling "closed-loop" savings validation systems are becoming a best practice at hospitals, systems and IDNs to ensure that these often-fungible savings guesstimates turn out to be real, tangible, and reliable for budgeting purposes.
Validation is mission critical
In addition to verification of your supply chain and value analysis savings for budgeting purposes, there are eight additional mission-critical reasons that we have identified below on why supply chain and value analysis professionals need to audit their supply expense savings estimates:
1. Data is inaccurate: Our research shows that only 64 percent of the supply chain expense savings reported to hospital, system and IDN senior management by supply chain leaders is correct. This is because the savings reports submitted are frequently overstated or understated.
2. Trust, but verify: How often do you think your vendors meet their promises or guarantees? Not often enough, by our measurement. You could be losing 10 percent, 15 percent, 25 percent or more on any given contract if you aren't validating your savings. More often than not, it's been our observation that healthcare organizations lose savings on the...