Value

Analysis
Guide
FIFTH EDITION | 2022
Members and Partners:
Welcome to the fifth edition of Premier’s Value Analysis Guide. Value analysis plays a critical role in how Premier’s
member healthcare organizations transform healthcare. It invites us all to think beyond price to the true value of
each product, service or capital equipment being evaluated.

We choose based on safety. We select based on care. We measure based on all relevant outcomes, inclusive of
patient and employee satisfaction. Ultimately, we strive to purchase products and services based on total value
of care delivery.

Since its inception in 2014, Premier’s Value Analysis Guide has served as an industry standard, bringing together
expertise from dedicated value analysis experts across our membership who understand the important role it
plays. With each edition, we include new learnings and trends that will help drive success at every waypoint in
your value analysis journey.

In this new edition, we explore the impact that supply chain disruptions can have on purchasing decisions.
Since our last edition was published in 2020, shortages and backorders have become much more pervasive,
which can undermine standardization efforts as providers scramble to identify acceptable alternatives. We also
explore the impact that the aggressive push to value-based payments can have as healthcare organizations
work to maximize cost and quality improvements. In addition, the guide includes a deep dive into environmentally
preferred purchasing, and how the need to protect the quality of our communities’ natural resources influences
purchasing decisions.

Throughout the text, Premier has provided learnings from leading practice clinical operations that can be applied
to value analysis, including several new case studies from Premier members whose value analysis processes have
driven significant transformation in their organizations.

Value analysis is a transforming methodology in healthcare that helps providers select products and services,
based not on personal preference, but on the best value it brings to the organization and its patients. If you haven’t
taken the opportunity to create, review or reinvigorate your value analysis program, or are unaware where to begin,
I recommend you look within these pages. Whether a value analysis professional yourself, a clinician, serving on a
value analysis team, or a supplier looking for a way to assist the organizations you serve, Premier’s Value Analysis
Guide is a valuable asset to move us all forward.

To greater success,
Michael J. Alkire
Premier President and CEO
 TABLE OF CONTENTS

01 INTRODUCTION TO VALUE ANALYSIS...............................01

What is Value Analysis
The Purpose of Value Analysis
Value Analysis Guiding Principles
Value Analysis Leading Practices for Today’s Healthcare
Partnering with Suppliers

02 INDUSTRY TRENDS..............................................................06
Supply Disruptions
Inventory Substitution Process Procedure
Sustainability and Environmentally Preferred Purchasing (EPP)
Reimbursement and Payment Reform Considerations
Merger and Acquisitions Considerations

03 VALUE ANALYSIS AT YOUR ORGANIZ ATION....................14

Assess your Organization’s Value Analysis Maturity
Create Value Analysis Teams
Boston Children’s Case Study: The Georgie

04 VALUE ANALYSIS ME THODOLOGY.. ...................................23

Identify
Gather Information
Analyze
Implement
Monitor

05 VALUE ANALYSIS ME THODOLOGY APPLIED....................35

A Review of Peripherally Inserted Central Catheters (PICC)

06 RESOURCES...........................................................................40
Value Analysis Process Flow
Sample Value Analysis Project Plan
Implementation Process
New Product Request Form
Product Value Assessment
Conversation Analysis Evaluation Tool
Value Analysis Peer Connection and Certification

07 CONTRIBUTORS....................................................................49

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | iii
01

Introduction to
Value Analysis
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 1
 What is Value Analysis?
Value analysis is nothing new, though you may not be familiar with the term. We use value
analysis concepts every time we are faced with our own purchasing decisions. Our personal
purchasing drivers may be different than those in a healthcare environment, but value analysis
is still performed.
Value Analysis (n.) – an evidence-
based process for healthcare Let’s look at a real-life example in Figure 1 to help illustrate. You’ve decided to make a salad
organizations to obtain supplies,
services and equipment. Value analysis for dinner, and you’re at the grocery store comparing three different options for lettuce.
drives quality care delivery, safety and
outcomes, and factors in total cost.

FIGURE 1: Illustrated Real-Life Example of Value Analysis

Farm Fresh Organic Salad Kit

Individual Organic Salad Kit,

Head of Lettuce Head of Lettuce Including Dressing
It may be healthier than
It’s the least expensive, It’s the most expensive
option A. You’ll still need
Differences but you’ll need to buy other but includes everything you
to buy other items if you
items if you want a full salad. need to make a full salad.
want a full salad.
Your main driver is expense, Your main driver is to have
or you already have Your main driver is a quick and easy salad
Decision Driver
the rest of the salad only buying organic. option, and the expense
ingredients at home. is not a factor.

As you review the available options, your brain automatically starts to work through
their differences and your own drivers that will inform your purchasing decision.
The purchasing decision is made relatively easily, on your own and in a matter of seconds
or minutes. Later, when you eat the lettuce, you’ll determine how satisfied you were with
your decision and whether you will purchase it again. You’ve conducted a value analysis!
Starting from scratch and don’t know
all the terminology? The Association If we evaluate a more complex purchase decision – such as a car or house – the
of Healthcare Value Analysis weight of the decision becomes more serious. More stakeholders are involved,
Professionals (AHVAP) offers resources
to help. the option differences and decision drivers become heavier, and the process
may last longer to both come to a decision and evaluate its effects.
Note: Access to content on AHVAP’s website
is for members only. Find out how to join. In healthcare, this value analysis process is even more complex. Patient care,
rather than personal desire, is the focus. And the process requires subject
matter expertise from across the organization to determine decision drivers,
weigh options and assess outcomes for patients and the organization.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 2
 The Purpose of Value Analysis
As a process for how healthcare organizations obtain supplies, services and
equipment, value analysis contributes to the development and preservation
of a clinically integrated supply chain, first considering care delivery, safety
and outcomes, and then factoring in total cost. This ensures that high-quality
supply and service decisions are made in a fiscally responsible manner.
Value analysis programs, processes and decisions must be structured within a
framework of quality and safety, focusing on the appropriate utilization of supplies
and services. Stakeholders must also follow applicable organizational processes
and support the health system’s mission, vision and strategic goals.
The process strives to balance issues related to quality, patient and
staff safety, revenue enhancement, and reimbursement optimization
across the continuum of care. This is accomplished through:
• Appropriate standardization
• Pricing optimization
A 2016 study by an academic hospital
in California revealed nearly $1,000 per
• Implementation of cost-savings initiatives
procedure is in wasted medical supplies. • Identification and elimination of waste, redundancy and inefficiency
Practices that help reduce waste –
the way we do in our own homes – can
be used in the value analysis process
as well. Do not buy it if it will not be used.
Work with physicians to focus preference
cards, remove unnecessary items and
discuss practice variations. If supplies
are unopened, they can be reused,
Value Analysis Guiding Principles
but you will need a policy so items do Value analysis programs:
not just get thrown away with other
used materials. • Depend on a leadership structure to provide guidance, governance
and support of the process.
• Utilize multidisciplinary teams to evaluate products and services.
• Establish and maintain relationships with key stakeholders to identify opportunities.
• Develop a method to track cost savings, process improvements and/or
revenue enhancements.

Potential Stakeholders Value analysis teams (VATs):

for Value Analysis: • Involve subject matter experts and key stakeholders in the process.
• Clinicians • Identify opportunities to support optimal quality of care and the best value.
• Product end users from various • Evaluate requests for products and services based on:
disciplines: OR, Cath lab, Clinical • Evidence-based outcomes
lab, Pharmacy, Nursing, Facilities,
Environmental Services, IT. • Patient and staff safety
• Subject matter experts from various • Current organization and industry-leading practices
disciplines: Infection Control, Sterile • Regulatory requirements
Reprocessing, Risk Management, • Total cost of care and other financial influences
Finance, Legal, Regulatory/
Compliance, Purchased Services. • Establish criteria for and monitor all evaluations.
• Service line leaders
• Review the use of products and services that have a high impact
either on patient care or on strategic and financial goals.
• Supply chain leaders
• Suppliers

See page 14 for more on value analysis teams.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 3
 Value Analysis Leading Practices for Today’s Healthcare
1.  Establish a team.
Create a multidisciplinary team of key stakeholders. Set a consistent meeting
schedule and share the agenda and supportive data in advance of each
meeting. For streamlined workflow and more efficient decision making,
invite other attendees to provide targeted expertise as needed.
2. Create a foundation of holistic and robust data on which to rely.
Inventory current data sources – including internal, external and GPO-based
solutions – that can provide decision support around cost, quality, safety, outcomes
and reimbursement. If this capability does not exist, work with your leadership
to make a business case for acquiring or building access to these information
sources. Without data, evidence-based decision making cannot take place.
3. Take control of new product approval.
Develop and implement a standard process for new product requests. Limit supplier
requests that do not have an internal sponsor. Standard processes are often supported by a
request form (paper or electronic) and a clear submission path (see example on page 45).
4. Transition from reactive to proactive processes.
Dedicate a steadily increasing portion of the value analysis agenda for proactive assessment
of critical procedures or Diagnosis-related group (DRGs), with a call to examine what is
used within a procedure when issues with cost, quality, safety or outcomes are identified.
5. Leverage findings within the organization.
Communicate organizational improvement opportunities (e.g., unjustified
variation, improper coding, etc.) that are revealed during the value analysis
process so improvements can be made within the applicable areas.
6. Monitor, monitor, monitor.
Ensure your work continues beyond decision and implementation. All implemented changes
are done so with an outcome or goal in mind. Track to the goals until you are sure you have
optimized the opportunity and ensure that any changes to process are holding strong.

Adapted from “What is the Future of Value Analysis? Hint: Not New Product Approvals.” October 10, 2017, Robin Czajka, CARN BC CMRP.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 4
 Partnering with Suppliers
The ever-changing healthcare environment extends further than just the walls
of healthcare facilities. If hospitals can effectively establish strong partnerships
with their suppliers, both will benefit. Hospitals are looking for strong supplier
partners that understand and support purchasing decisions, from acquisition
through distribution, to contain costs while improving quality.
While supply chain professionals once called for a primary focus on negotiating the lowest-
acquisition cost, today it is imperative that value analysis professionals collaborate with
suppliers to incorporate total cost of ownership and outcomes. This includes elements
such as reimbursements, patient experience, trusting physician partnerships, organizational
improvements, outcomes-driven data, key performance indicators, safety, infrastructure
to manage risk, patient outcomes, and disposable and capital equipment costs.
Suppliers who actively seek to partner with integrated delivery networks (IDNs)
can bring tremendous value. Manufacturers can demonstrate partnership by:
• Signifying how a product will measurably improve high-quality patient outcomes.
• Providing transparent functional analyses of proposed
items against items currently available.
• Performing consistent strategy planning to assist healthcare
customers in reducing or managing supply costs.
• Offering value-added components that support organizational goals.
• Leveraging and evaluating a manufacturer’s full line of products.
• Providing educational support to healthcare customers.
• Establishing a thoughtful, strategic conversion plan to assist customers with
successful conversion or adoption of new products or technology.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 5
02

Industry Trends
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 6
 Supply Disruptions
It’s like a pebble in a pond. Once the pebble breaks the stillness of the water, the effect will
ripple far beyond that initial wave. Similarly, when a supply is disrupted, the ripples are usually felt
throughout the entire market segment. In healthcare supply chain, those ripples can feel more like
a tidal wave — a tidal wave that seems to occur with increasing frequency.
Despite not being a manufacturing environment, healthcare organizations and the businesses
supporting the healthcare industry have increasingly embraced lean methodologies. Hospitals
generally have a relatively predictable rate of commodity consumption, which may give some a
sense of security in moving towards zero inventory balance. However, operational efficiencies
achieved by service-based inventory replenishment programs create exposure for organizations
to immediately be in crisis mode any time there is an interruption in product deliveries. When
manufacturing has little or no reserve, distribution is focused on multiple inventory turns each
month for high demand items. Hospitals have moved towards eliminating the traditional
storeroom method of supply procurement, and circumstances are ripe for stock outs of many
of the items without which hospitals cannot do business. The U.S. healthcare system had a
chance to learn preparedness related to threats of a pandemic with Ebola; and COVID-19 has
brought that lesson home.
With many IDN’s still reeling from these supply lessons learned, organizations are reevaluating
how they appraise their supplier and distributor partners. Supplier due diligence for healthcare is
taking on an ever-expanding scope with supply chains working to develop their understanding of
manufacturing, raw materials and global political considerations, in addition to the more traditional
aspects of sourcing, operations and local logistics. Understanding the safety stock philosophy of
supplier partners is a necessity, especially if an organization’s distribution model does not afford
a cache of safety stock. Many crises can be minimized or altogether avoided if there is some level
of inventory cushion available at some point in the supply continuum. Determining which partner
needs to hold that inventory is an increasingly important strategy in organizational supply chain
resiliency. Assessment is a continuous process that considers constantly changing variables and
supplier partnership assessment should be continuous as well.
Going forward, the healthcare supply chain has an opportunity to build for the future. Onshoring
of manufacturing, supplier diversification within an organization and aversion to sole source
agreements are trending. The time to create change is now — complacency is not a backup plan!

Triggers for Alternate Supply Options

Any disruption to the global supply chain can trigger the need for alternate supply options — the
recent COVID pandemic has brought that lesson home for all of us. Additionally, normal supply
chain variables such as back orders and recalls frequently strain the healthcare supply chain,
creating an unanticipated, yet urgent need to identify an alternate product option. “Lean” and
“Just in Time” methodologies often exacerbate the urgency to identify substitute product options;
supply interruptions become pressing quickly due to small amounts of inventory on hand at
manufacturing, distribution and ultimately in hospital storerooms.
There are strategies that healthcare institutions can implement to decrease risk of supply
disruption. Certainly, there is significant awareness around force majeure conditions such
as weather, raw material shortages, and large-scale transportation or labor issues that can
drastically impact product availability, and many health entities have plans in place for those
types of disruptions. Keeping abreast of local conditions is another important tactic when
identifying risks for a break in the supply chain. Changes related to construction projects,
demand surge, civil disturbance, terrorism, even a hazmat event can precipitate a supply
interruption. Understanding the risks specific to the geography of the location is an important
part of identifying triggers and ultimately creating a comprehensive supply disruption
mitigation plan.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 7
 Inventory Substitution Process Procedure

Title: Inventory Substitution Process

Purpose: Substitute product in stock
Applicability: Purchasing Agent/Buyer
Specifics: When an item is not available for purchase and a substitute is
needed the following procedure should be followed.
• Place inventory order via Meditech
• Check GHX Exchange for order status
• Medline – meeting with Medline Rep weekly
• Check Insight Open/Rejection report to see what is on b/o and what has been rejected
• Item on backorder
• See the amount on order
• Go to Medline.com to see if core item
• (if product is due into Distribution Warehouse within 48hr – will not T from another
warehouse)
• (If request overnight shipping from another warehouse we are responsible for
shipping as well non-core items)
• Ask Medline to T from another warehouse or dropship from manufacturer
• If Medline is not able to get item – check with other vendors
• See what is on the shelf in store room and on nursing floors
• Stock out report will show location and qty
• Check with Purchasing
• Depending on the amount – look at getting sub
• Looking into sub
• Call manufacturer/rep to see if there is a sub
• If sub then identify the sub and packaging string and if they carry it at Medline/
Cardinal
• Approval by
• Value Analysis Coordinator
• Go to Value Analysis Meeting
• Departmental
• Clinical Education
• PO adjustment needs to reflect what the sub number is/ packaging string/ qty
• Do you keep the current item on b/o?
Keep current item on b/o and add second line for new

Inventory Substitution Process Procedure

Medical providers are becoming increasingly aware of the environmental impacts of their
operations. This is especially true of large IDNs with acute care hospitals. Medical facilities are
often always open, high-energy and resource-intensive operations. They may be the largest
single user of energy and water within a community, as well as its largest generator of waste.
Including sustainability considerations as part of your value analysis process can support your
organization’s long term sustainability goals.

Central to the successful application of value analysis in this area is a firm understanding of
each system’s sustainability priorities. These can vary widely but may include one or more of
the following:

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 8
 • Reduction in energy use
Reductions in energy consumption can result in both meaningful savings and superior
environmental performance. Purchasing products with Energy Star® or EPEAT certification
provides a guarantee of energy efficiency. Large-scale initiatives like LED lighting
conversions and HVAC/boiler upgrades can create significant savings opportunities.
Best practice is to assess total cost of ownership rather than focusing solely on initial
purchase price.

• Elimination of chemicals of concern

Concerns have been raised about certain widespread chemicals that are
present in both everyday and specialist medical materials. The elimination
of PVC and phthalates, for example, from certain contract categories has
been a long-term goal of a number of hospital systems. Asking suppliers for
chemical information allows for a full comparison of competing options.

• Reduced waste disposal

Disposal of product packaging, in combination with the proliferation of single-
use devices, results in the generation of significant waste. Consideration
The health effects of of reprocessable devices can reduce such waste whilst saving money.
air pollution are difficult Suppliers can be encouraged to optimize packaging by removing unnecessary
to quantify but very material or better correlating pack size to typical usage scenarios.
significant. The World
Health Organization • Greenhouse gas (GHG) elimination
estimates that 4.2 million Many health systems have or are developing GHG targets and even net-zero
deaths a year are caused goals. These may include scope 3 emissions, which encompass purchased
by outdoor air pollution. goods and services. Asking suppliers about their own GHG accounting
and elimination goals can further your own system’s efforts.

Once you have a full understanding of your goals, it is critical to communicate those
goals to your suppliers and provide information relative to those goals. Communication
Research found that
with suppliers creates a focus on providing more sustainable products. It also
healthcare is responsible
helps the supplier understand the consequences of not aligning with your system’s
for approximately 10%
environmental aspirations. Key elements of these conversations include:
of the nation’s carbon
emissions and 9% of
• Clarity around the requirements
harmful non-greenhouse
Provide details of sustainability requirements in RFPs and other purchasing documents.
air pollutants. The
Include such questions as are necessary to further these environmental aims.
vast majority of this is
attributed to air emissions.
• Request for supporting data
Consider whether further data is required to support a supplier’s responses.
This may be particularly relevant if considering moving business due to the
presence/absence of chemicals of concern. External certification, documents
signed by a senior executive, or even analytic data may be appropriate.

• Discussion of timelines and consequences

If a buyer has a long-term commitment to an environmental aim, it may be productive to
share that with suppliers to give them time to react and make the appropriate changes.
Many GHG elimination targets are operative over 5-to-10-year timescales. Making it clear
that something will be a future requirement to win business allows suppliers to adapt.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 9
 Reimbursement and Payment Reform Considerations
The decision to reimburse is based on three related tenets: coverage, coding and payment.

• Coverage: Is the service or product considered part of an insured patient’s benefits?

Coverage refers to the process and criteria used to determine if a product, procedure or
service is reimbursable. Medicare is the most influential entity in the coverage process.
Private payers often follow Medicare’s lead in developing their own coverage policies.
So, if it isn’t covered by Medicare, chances are, it’s not likely covered by other payers.

• Coding: Is the diagnosis, service or product identifiable?

Standardized coding systems are developed through the joint efforts of the American
Medical Association (AMA), the American Hospital Association (AHA), the Centers for
Medicare & Medicaid Services (CMS) and the Centers for Disease Control and Prevention
(CDC). The most widely accepted medical nomenclature are CPT, HCPCS and ICD-10.
Payers use these codes to either determine coverage or payment for furnished services
and items.

• Payment: Is the service or product covered?

Payers differ on what they will cover. Recently, there have been shifts in the market
on not only what services and products payers will cover, but where that service or
product was administered (i.e., what care setting). It’s essential for value analysis
leaders to understand the organization’s payer mix, what they currently cover and
how that aligns with the payment programs the organization participates in.
• Education on reimbursement should be tailored according to the needs of the Value
Analysis (VA) Team. This can be addressed in multiple ways depending on available
resources. Potential avenues include a webinar or other presentation by the health system
or Reimbursement Specialist to their VA colleagues, a reimbursement and coding 101
self-paced module on the health network’s Learning Management System (LMS), or
development of a Quick Reference Guide (QRG) that can be focused on the health systems
regional reimbursement demographics. Including a Reimbursement Specialist in the value
analysis workflow process is the most efficient way to provide ongoing reimbursement
dialog and education on product requests.

Since 2010, hospitals have been financially incented or penalized to cost-

effectively take care of patients and deliver good outcomes. Keep in mind, though,
reimbursement is defined individually for each hospital. Even within the same
health system, different facilities may have different payment algorithms.
There are currently three main programs measuring hospital performance
in the inpatient setting. The goal of these programs is to transition from a
volume-based, fee-for-service payment model to one where hospitals are
incented to improve the health and outcomes of their patients.
1. The Hospital Value-Based Purchasing Program is the only program with a bonus
component. This program takes or rewards a percentage of a hospital’s inpatient Medicare
base operating payments based on their performance. Four domains are measured: clinical
care (measuring mortality), person and community engagement, efficiency and cost
reduction, and safety. The program is budget neutral, so the “losers” pay the “winners.”1
1. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/HVBP/Hospital-Value-Based-Purchasing

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 10
 2. The Hospital Readmissions Reduction Program tracks the “all cause” 30-day readmissions
for several defined conditions, such as heart failure, heart attack, pneumonia, chronic
obstructive pulmonary disease (COPD), total hip or total knee, and coronary artery bypass
graft (CABG). Hospitals are penalized up to 3 percent of their inpatient payments for high
readmission rates. The goal is to keep patients healthy and out of the hospital.2
2. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program

3. The Hospital Acquired Conditions Reduction Program (HACRP) penalizes the worst
performing hospitals (those in the bottom 25 percent) a portion of their total Medicare
payments. The measures are calculated from the Agency for Healthcare Research and
Quality (AHRQ) Patient Safety Indicators (PSI) and the CDC National Healthcare Safety
Network (NHSN). Without a “present on admission” (POA) flag, hospitals are no longer paid
additional costs associated with certain conditions considered to be preventable, such as
catheter-associated urinary tract infection (CAUTI), patient falls or surgical site infections
following certain procedures.3
3. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/HAC-Reduction-Program

In addition, the advent of bundled payments, accountable care organizations (ACOs)

and other alternative payment models are incenting providers to take financial risk for
a defined population of patients over an extended period of time. These are forcing
healthcare supply chain leaders to look beyond the four walls of the hospital.

What can supply chain leaders do to ensure that your hospital

will be a leader, both clinically and financially?
• Develop robust value analysis programs that truly focus on the intersection
of cost, quality, safety, outcomes and patient experience.
• Look at all criteria in product selection, not just cost.
• Understand the long-term implications of the decisions that are made.
• Recognize how a cost-savings decision incurred today by changing or
eliminating products could result in a much larger penalty later.
• Look to improve accuracy in clinical documentation and coding, which is crucial to
other functions including maximizing reimbursement across the continuum.
• Become familiar with your hospital’s current results in the payment
reform programs and put processes in place to ensure your team is
focused on contributing to your hospital’s improvement.
• Expand or improve your department’s reach into the non-acute side by involving
key individuals in your decision making and assisting in product selection.
• Consider having financial team members vet out new
products prior to value analysis presentation.

What can value analysis professionals do to ensure that the prospect

of reimbursement is incorporated into their process?
Reimbursement Specialists and Revenue Compliance Auditors contribute their expertise in the
value analysis process by proactively reviewing and engaging in the discussion of economic
information relative to the total cost of various payers and geographic payment methods.
That information includes reviewing existing treatments and reimbursement opportunities
to ultimately improve hospital reimbursement, increasing efficiencies in processing for
accuracy of patient charging and improving quality of care across the continuum.
Developing a reimbursement questionnaire template into the value analysis

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 11
 assessment process not only addresses the reimbursement information, but it
also educates and integrates the clinical and financial aspects of the request
for total cost transparency within hospital payments for optimal value analysis
decision-making. These various questions can include, but are not limited to:
• Who are the commercial payers?
• What is the anticipated range of payments?
• What is the regional payer mix?
• Will hospital costs be covered?
• What are the average Medicare and Medical Assistance payments for the procedure?
• How does this new product, service or equipment compare in
reimbursement terms to the current procedure?
• Are there benefits or implications associated with the payment options?

Merger and Acquisition Considerations

Healthcare will continue to change, and mergers will continue in both the
provider and supplier markets. A robust, active value analysis committee
can help organizations deal with these changes and make it a positive
process both in cost reduction and increased patient satisfaction.

Value analysis recommendations during provider merger and acquisition (M&A):

• Recognize the current organizational cultures and be open to leading
practices for integration into the new organizational culture.
• Revise the value analysis process to the newly redefined
organizational culture and strategic vision.
• Develop a communication plan for suppliers that provides
direction on value analysis policies and procedures.
• Identify roles and responsibilities for supply and contracting
decisions between the parent company and the acquisition.
• Facilitate meeting dates, times and methods inclusive of the
needs of all locations, including the newest acquisition.
• Determine how decisions are to be communicated across the health system.
• Define the new strategic supply chain goals and socialize the vision for the health system.
• Select statistical sources of truth internally for supply chain data.
• Determine how the new corporate structure and governing bodies
will influence centralized value analysis decisions.
• Educate leadership, clinicians and end users on value analysis policies and
procedures; engage them in the value analysis process early on.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 12
 Pitfalls to avoid during provider M&A:
• Recognize if there is a lack of C-suite or executive support for
standardization of value analysis across organizations.
• Understand that a multi-system IDN across multiple states
will have different needs, acuity and payer groups.
• Help merging teams become acquainted for more streamlined communications. Create
and distribute a team roster with photos and contact information and have a standing
rule that team members should identify themselves when speaking on conference calls.
• Recognize that merging or acquired organizations may not have a defined
fiscal goal for value analysis, especially for nursing and surgical.
• Avoid project scope creep and enable quick decision-making:
• Make sure your key stakeholders or subject matter experts are available to
discuss product and/or evaluation findings during scheduled meetings.
• Be prepared to have difficult conversations to reach consensus.
• Assign a single voice or tiebreaker who is empowered to make a final decision.
• Be aware that constant staff turnover between merged or acquired
sites can lead to lack of continuity and rework.

Value analysis impact during supplier M&A:

• Identify changes in products, including reorder information changes for system updates;
assess whether VAT approval will be needed and how changes are to be communicated.
• Determine whether orders will be interrupted and delayed.
• Renegotiate contracts to establish product availability, distributor
alignment, ordering processes and product discontinuations.
• Identify changes in supplier representation and establish
clinical in-service training and education.
• Investigate whether the changes will affect previous or future capital acquisitions.
• Communicate changes throughout the health system regardless of how
minor to reduce confusion other competing suppliers might create.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 13
03

Value Analysis at
Your Organization
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 14
 Assess Your Organization’s Value Analysis Maturity

#1
With a variety of considerations to balance when making purchasing decisions, including
clinical, quality, safety, reimbursement, patient experience, employee impact, engagement and
total cost, how do you apply a rigorous value analysis process at your organization?

After surveying our members – including academic medical centers, IDNs, community
Value Analysis hospitals and stand-alone hospitals – we learned that value analysis programs vary in depth
Maturation Scale and maturity across the membership.

Designed to assist
To help assess your organization’s maturity level, we’ve created a couple of tools:
you in assessing your
organization’s level
of maturity with value
Future
analysis, this scale will
help you understand Total
effectiveness
your current state across
and provide guidance continuum
Best Practice
on what you need to
accomplish to move to Total
effectiveness
your ultimate future state. in accute
High care

Quality,
waste
reduction
Medium and
standardization

Cost
reduction
Low with
some
standardization
Reactive
and price
focused

Responsibility limited Shared responsibility, Formal structure of Dedicated service Incorporate patient
to supply chain but varies by teams with moderate line multi- perception into
department multidisciplinary disciplinary teams value equation
Reliance on supplier representation in place (physician
provider data Process is led by co-chair) Acute and post
acute providers
supply chain Deliberations on cost,
and patients
Infrequent use of quality and outcomes VATs align with participate in
evidence Moderate use of occur moderately organizational high performance
evidence culture and goals VATs
Little process Frequent use of
and/or process Process typically evidence VATs always taking Greater assumption
variation begins with new into consideration of risk by providers
product request Reduce or eliminate cost, quality and
waste and variety outcome data to Clinical decision
Tracking limited to drive decisions support tools
include appropriate-
cost savings Appropriate use for (EMR, MMS,
use data accross
clinical preference protocols, the continuum
Infrequent VA items national metrics)
training Clinical registries
New technology Appropriate use for connect outcomes
assessment physician preference with products
products and devices
Project management
software for planning, Data aggregation
Value management
tracking and reporting capture outcomes
software (includes of patients and
analytics, projected populations over
VA training encouraged savings, value time at different
and provided measurement) levels of the
system - micro,
Training is expected macro, community
and certification is and region
encouraged

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 15
#2
Value Analysis
Maturity and Contract
Complexity Rating Tool
This tool (for Premier
members only) allows
you to perform a self-
assessment to help
your organization
understand its current Create Value Analysis Teams
state, identify current For any value analysis program to be successful, you need engagement and discipline from
tools and processes, your value analysis teams (VATs) and from executive leadership. The organization needs to
and give you a path for set the expectation and hold team members accountable for the success of value analysis.
growth. We recommend Below are strategies and leading practices to consider when setting up and managing VATs.
completing this self-
assessment annually to Identify participants and roles:
track progress along the • An organization’s value analysis process should have C-suite support, ideally from the CFO.
Maturation Scale. The • Strong clinical leadership is needed for each clinical VAT. Ensure
Value Analysis Maturity your clinical VATs are physician led and nurse driven.
and Contract Complexity • The VAT leader needs to develop a good working relationship with product end users.
Rating tool is available • VATs should be multidisciplinary with stakeholders from
in the PINC AI™ Value a variety of departments and service lines.
Analysis Community. • Create discipline-specific VATs: Surgical Services, Perioperative Services,
Download it here. Cardiac Catheterization Lab, Clinical Lab, Interventional Radiology, Pharmacy,
Nursing, Purchased Services, Facilities/Environmental Services, etc.
• Include participants from other patient care disciplines such as
Infection Prevention, Sterile Processing, Nursing Education, Risk
Management, Regulatory and Compliance, Legal, etc.
• Include chairperson and co-chairperson positions that
roll off after established tenure periods.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 16
 Develop and maintain a rigorous process:
• Identify key champions by department and include them in the decision-
making process. Empowering them to own the education of their
peers is extremely helpful in the adoption of new items.
• Hold routine meetings.
• Prepare an agenda ahead of time to improve flow of topics/discussion.
• Track attendance.
• Document the discussion clearly and completely.
• Clearly communicate to anyone impacted by the decisions made during meetings.
• Set up decision-making meetings with defined roles and responsibilities that help track
progress in product evaluation. Key groups include the Executive Steering Council, Enterprise
Value Analysis Committees and Value Analysis Sub-Committees. Without a structure and
defined roles, providers risk that key product decisions that will not be made in the short-
or long-term, resulting in a product or process change that is ultimately not sustained.
• Have a defined project management process to enable success with
clinical integration. Organize projects with timelines and responsibilities.
Keep task owners accountable for on-time delivery.
• Allow the team to make commodity product changes with little to no evaluations.
• Remain cost conscious but do not risk quality or safety.
• Document all goals and subsequent cost savings achieved. Report regularly to stakeholders.
• Align products and services that will improve your organization’s key
performance indicators such as mortality, length of stay and EBITA.
• Create a fluid pipeline of project opportunities to identify opportunities to standardize,
starting with low-hanging fruit and building toward items that require clinical evaluation,
such as physician preference items. Leverage your GPO data to create this pipeline
and prioritize opportunities by initiative status using categories such as contracts and
new technology, building toward standardization to improve continuity of care.

Enable consistent and abundant communications:

• Establish consistent communication pathways for all stakeholders, including
routine reporting to department and service line meetings, and to the
C-suite or executive steering committee. The communication plan should
outline expectations, methods for how changes will be communicated, how
often communication will occur and action items to be addressed.
• Since including VAT participants who are geographically disparate can be
difficult, investigate tools, such as web conferences and virtual meetings,
that will allow and enable participation no matter their location.
• It can sometimes be difficult to receive evaluation forms for feedback
on a project. Look at tools and resources that will make this process
more efficient, such as electronic evaluation forms, so you get the
feedback and information you need to make informed decisions.
• Research analytical tools available for value analysis so you
and the VAT can assess progress and document achievements,
which helps speed to value and improve efficiencies.
• VAT decisions do not always reach staff who are directly caring for patients.
In addition, VAT members don’t always communicate with their facilities.
Secure technological resources and put standards in place to ensure
down-the-line communications of your decisions and their impact.
• If available, use electronic dashboards and automated notifications.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 17
 Provide continuous education:
• With any new product or change in product, ensure appropriate
education is delivered to appropriate staff and stakeholders.
• Coordinate education efforts across departments and service lines to ensure
integration. Complex conversions may require follow up to ensure adherence.
• Provide generous notice for educational events and subsequent product
conversions so staff and stakeholders have time to prepare.
• If in-services are required, document attendance and follow up with absentee
staff. Determine who is responsible for follow up with absentee staff.
• Confirm supplier support in education efforts, but do not
rely on the supplier to document the education.
• Outline all plans for trials, conversions and education, with specific dates
for each. Make sure all parties are on board with start and end dates.
• Follow an established communication plan to regularly update clinical areas
with details and information of upcoming trials, conversations, implementations
and issues with sourcing (e.g., backorders, FDA issues, etc.).

Prepare for roadblocks:

• Suppliers may go around the process to get a product into the system. Have a
plan to address supplier submissions. Develop an effective vendor management
policy, and proper enforcement to handle suppliers that do not follow the policy.
• Staff and physicians may also try to work outside the value analysis
process. You will need rigorous process standards and C-suite support
to develop a culture of accountability for the VA process.
• There can be a lack of consistent understanding of how a cost-benefit analysis is
performed. Understand how to apply total cost of ownership analytics and educate
members of the VATs and other stakeholders so this can work to your advantage.
• Plan for potential delays in decision making.
• Lack of critical clinical stakeholder involvement is common due to
competing priorities. To maintain the culture of accountability, have
a back-up plan for clinical participation when needed.
• Lack of standardization, whether around products, processes or suppliers,
can be difficult. Be prepared with data to help drive the decision.
• Prepare for hold-out facilities within the system. You’ll need sufficient evidence
and C-suite support to get them on board with the VAT decision.

Consider adding a time-out to your VA process:

Organizations have implemented and utilize a surgical time-out process in
their hospitals, ambulatory care centers and office-based surgery facilities.
The surgical time-out process was introduced in 2003 when The Joint
Commission’s Board of Commissioners approved the original Universal Protocol
for Preventing Wrong Site, Wrong Procedure, and Wrong Person Surgery. *

The surgical time-out process, which includes an immediate pause by the

entire team at several critical times, can be effective in improving patient
outcomes, promoting a patient-centered safety culture and increasing

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 18
 communication, situational awareness and trust among team members.
In 2017, Premier implemented the Modeled after the success of surgical time-outs, the value analysis time-out is
value analysis time-out procedure intended to serve as a checklist that is performed at specific points of the value
in the national sourcing committees
for specific phases of the sourcing analysis process. The “checklist” items should help ensure critical questions have been
process. The process was evaluated asked and answered, necessary data has been gathered and important information
for effectiveness during the 2018
calendar year, and was determined disseminated as appropriate for the particular product category being assessed.
to be beneficial, generating pertinent
discussions that lead to further
A surgical time-out is typically performed at specific intervals such as:
investigation and/or outreach to
subject matter experts over 70 • Before the procedure begins – to help ensure right patient, right procedure, right sight.
percent of the time. Premier national • Before the end of the procedure – to help ensure no foreign bodies are left behind
sourcing committees continue to
utilize the process and consider it a and that all aspects of the procedure have been successfully concluded.
leading practice. • A final debriefing at the conclusion of the procedure.

Similarly, value analysis time-outs should be performed at specific intervals such as:
• The beginning of a review process (Identify and Gather Information phases) to help:
Remember to apply your organization's
conflict of interest policy. • Ensure all eligible/relevant suppliers have been included.
• Identify regulatory concerns.
• Inquire about unbiased evidence available.
• Confirm all key stakeholders are included.
• Consider impact to other contracts.

• Before a decision is made (Analyze phase) to:

• Validate considerations for all quality and outcomes and ease of use.
• Help ensure safety and regulatory requirements are met.
• Identify ownership issues (e.g., backorders, inventory
and total costs and reimbursement).
• Understand the need for, or results of, product validations/evaluations.

• After a decision is made (Implement phase) to:

• Help ensure effective planning, communication, education and resource allocation.

*The Joint Commission on Accreditation of Healthcare Organizations. Comprehensive Accreditation Manual for
Hospitals. Glossary. Oakbrook Terrace, IL. 2020 update. (Manual and corresponding updates are subscription-based.)

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 19
 Establish Your Value Analysis Methodology
Value analysis methodology is a standard process on which your value analysis projects rely. It
is used to set the tone, values and expectations of value analysis, and requires both leadership
and stakeholder buy-in.
Value analysis methodology is a standard process on which your value analysis projects rely. It
is used to set the tone, values and expectations of value analysis, and requires both leadership
and stakeholder buy-in.

1. I dentify.
Pinpoint the opportunities to address.
2. Gather Information.
Determine and gather the requisite data, content
and information to evaluate the opportunity.
Value
Analysis 3. Analyze.
Processes Weigh all the evidence gathered to make
the right decision for your organization
and the impacted stakeholders.
4. I mplement.
Efficiently implement the decision.
5. Monitor.
Measure and report on decision
sustainability and value over time.

These processes are often fluid, requiring a revisit of one process while
you are in the middle of another. For example, you may be analyzing data
and find that you need to go back and gather more information.
Remember to engage the appropriate stakeholders throughout all five processes – vet
questions and concerns early to allay last-minute surprises. Do not be afraid to have
difficult conversations; healthy debate will help stakeholders feel engaged, will make the
process more collaborative and will ultimately result in the most holistic decision.
MMethodology sourced from AHVAP and adapted based on subject matter expertise from Premier members and staff.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 20
 Potential Project Roadblocks or Detours

• Conflicts of Interest
Check to see if your organization has a policy regarding conflicts of interest. If so:
• Understand individual stakeholder conflicts when
inviting them to participate in a project.
• Determine project participation level as organization policies prescribe.
• Ensure value analysis project stakeholders are aware of any
impact the policy may have on the stakeholder role.
• On a project level, ask suppliers for a disclosure of anyone their company is actively
working with in your system.

• Supplier Marketing
• It can be difficult to unravel all the information that may be available regarding a product
or service. Whenever possible, ensure the information you are reviewing as to product
or service efficacy or claims of differentiation are based on third-party reviews, white
Open Payments (aka the Sunshine papers or studies.
Act) is a Congressionally mandated
transparency program that increases
awareness of financial relationships • Clinician or Physician Preference
between the healthcare industry and
physicians by collecting and reporting The first question you may want to ask is “Why?” Understanding
any payments or transfers of value the clinical preference of a product may allow for:
medical manufacturers make to
• The introduction of products with similar characteristics that
physicians or teaching hospitals.
Learn more at HealthData.gov. maintain or improve care while reducing costs.
• “Aha” moments that surface related to where the preference derived. Perceptions
Search payments made by drug and preferences may have come from any number of experiences.
and medical device companies to • Preference backed by efficiency, patient satisfaction or outcome
physicians and teaching hospitals at
OpenPaymentsData.CMS.gov. evidence should be considered in the final purchasing decision.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 21
 Boston Children’s The Georgie

In early 2020, Boston Children's Hospital was introduced to “The Georgie,” an updated
hospital gown designed specifically for children. It was created by the mom of a cardiac
patient who recognized the challenges met by her daughter “Georgie’s” clinical team with
the current hospital gowns.

Through trials and clinical feedback, The Georgie was further modified and enhanced by a
dedicated team of nurses, physicians, parents, patients and supply chain management.
Some of the unique features include MRI and X-ray compatible plastic snaps, signature
Peach Fuzz fabric made of bamboo and Lycra, and a patented design that facilitates the
ease of dressing and undressing the patient. It comes in sizes ranging from 0-3 months to 6
years old and has color-coded tabs that correlate to each age range for ease of identification
and laundry.

Today, the gown is able to provide comfort, help to stabilize critical IV sites/chest tubes/
drains, contain monitoring wires and lines from the child, facilitate neuroprotective
developmental care, improve outcomes and increase satisfaction for patients and families
during hospitalization.
We are continually told by parents how much they love The Georgie. Here are some quotes
from our nurses:

• “Parents like them and will ask for them.”

• “Parents of little ones that have a lot of emesis or stool like The Georige as they
otherwise would be washing out their outfits all of the time.”
• “The Georgie makes it easy to put their baby/child into something soft and
comfortable.”
• “Great for lines and tubes, makes hiding them from little hands easier and the lines/
tubes are out of the way.”
• “I no longer stress about finding something for the little ones to wear, especially ones
that the families cannot or do not provide clothes.”
• ”The Georgie is great; we love them.”

Following the success of The Georgie, Boston Children’s Hospital worked with the same vendor
and our Falls Management Committee to develop patient slippers. Current slippers are either too
big or too small and will often spin around the feet and fall off the children. We were able to help
develop slippers that are properly sized, have strong tread, have enough tread that run from toe to
heal to prevent falls and are tight enough, but not too tight, around the ankles so they will not fall
off the child’s feet.
These two projects have shown through teamwork, collaboration, transparency and trust, Boston
Children's Hospital has made significant contributions to products that not only benefit our
patients but also the pediatric patient community.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 22
04

Value Analysis
Methodology
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 23
 Value analysis project suggestions or imperatives come from a variety of sources.
Depending on your organizational culture and engagement, there will be several internal
and external stakeholders suggesting value analysis projects via a formal or informal
request process. As your value analysis process matures, you will notice that it becomes
entrenched in the culture of the organization and how decisions are made. Because of
this, you should prepare for growth in your process and resources needed to respond.

Below are some ways you can ensure you are creating a value-driven project queue that
meets your program goals:
• Engage in strategic initiatives at your organization.
• Examine quality and safety issues that impact patient care, outcomes or readmissions.
• Review payer and reimbursement changes to proactively react to market changes.
• Review contract compliance to ensure you are meeting contractual
obligations for value received (e.g., price, rebate, etc.).
• Look for potentially unjustified variation to assess standardization opportunities.
• Assess new regulations and new evidence-based practice
that may call for organizational change.
• Address defective devices, products and equipment, supply
shortages, and recalls for uninterrupted quality care.
• Review capital budget requests to align resources where applicable.
• Identify savings opportunities.
• Actively strategize with suppliers to reduce supply cost where feasible and appropriate.

With any identified opportunity, always assess two items:

1. Validate the need.
For a value analysis project to occur, you should identify the current
state, desired future state, any gaps between the two that the project is
designed to address as well as determine future requirements.
2. Rate the project complexity.
To eliminate rework during the project and expedite decision making, identify and define:
The level and type of evidence required.
• End-user / stakeholder input required.
• End-user input required.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 24
 Premier Member Resource: Contract Complexity Rating Tool
Premier’s Contract Complexity Rating tool consists of 27 attributes within nine
domains. The level of complexity is directly related to the time and resources
necessary to evaluate and implement product contracts. Within the tool, you will
also find leading practice considerations, estimated time frame and resources
required. The Value Analysis Maturity and Contract Complexity Rating Tool is
available in the PINC AI™ Value Analysis Community. Download it here.

Level I Level II Level III

Regulatory, Patient Safety,
Value-Based Value-Based /
Utilization, Reimbursement,
(Minimal Conversion) Evidence-Based
Clinical Leap, IT

• Contract renewal • C
 omplex contract • I nput from multiple
renewal departments or
• M
 inimal contract
committees needed
modification • T
 ier modification
• C
 omplex analytics
• N
 o product • S
 ome conversions -
evaluation required vendor consolidation • S
 tructured in-depth
product evaluation
• S
 ame supplier • L
 imited product
is required
evaluation or clinical
• G
 eneral financial analysis
validation • K
 nown political or
• L
 ow impact on patient other sensitivities
• D
 epartment head
outcome and can be
or clinical service • A
 lmost always need
used interchangeably
line approval support of physician or
• I tem is regulated and/ service line director
• I nput from multiple
or legally required
stakeholders • C
 linical requirements
may outweigh desired
• C
 an affect patient
financial outcomes
outcome with
minor clinical or • R
 equires evidence or
operational practice equivalence study
• N
 ew/alternative items • U
 sually affects
that currently have an physician or nursing
equivalent that cannot practice change
be interchanged without • I tems specific to a limited
staff or physician group of physicians
education or discussion
• M
 ay be the “only” or
• N
 ew/alternative items one of a few solutions
that do not have an to perform service
equivalent but are not or deliver care
physician preference
• R
 evolutionary
• S
 tandardization - moving technology requests
from many to one or two
suppliers and/or products • R
 equires network
interface and
connectivity

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 25
 Gather Information
Each opportunity and project will dictate the type of information and the depth of evidence
required. As you start to gather information, consider the end goal and analysis needed to get
there. There are some common information sources that you’ll want to pull from to validate
project complexity, information and evidence requirements, relevant stakeholders and
workplan design. Access to data can be difficult, especially if your VA process is early in its
maturity. Work with what you have, prioritize a wish list and work with executive sponsors to
get access to the data you need.

Below are common information sources from which to gather all information required:
• Key clinical and non-clinical stakeholders.
• Clinical requirements, areas of use and current outcomes.
• Product specifications, such as product and current utilization amounts and practices.
• Associated policies, procedures and guidelines, including internal, professional
associations and regulatory.
• Evidence-based literature.
• Annual spend and supplier proposed pricing, value adds and key terms and conditions.
• Benchmarking data – price, cost, quality, safety, labor and outcomes as applicable.
• Reimbursement information.
• Supplier capacity – historic, projected and disaster recovery plans.

Premier Member Resource: Value Analysis Toolkits

With nearly every launch of a new product or service category,
Premier releases value analysis toolkits in Supply Chain Advisor®
to expedite member value analysis processes, helping them select
the most appropriate product for the patients they serve.

Gathering Data That Speaks to Physicians

When physicians want to understand which products provide value and impact
outcomes, they typically look to their peers and peer-reviewed journals. It’s
important that supply chain and value analysis leaders serve as a resource
for comparative information, bringing evidence and outcomes to the table.

How Suppliers Can Help

Ask suppliers to provide:
• Manufacturer position on how new products support improved patient
outcomes over their own current technology or competitive items in the
marketplace. This should routinely be part of their product literature!
• Up-to-date coding and reimbursement information. It is
critical that you have the best, most accurate reimbursement
information to determine a product’s true cost.
• Total cost projections.

Leading practices sourced from AHVAP and adapted based on subject matter expertise from Premier members and staff.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 26
 Analyze
The analysis phase in the methodology is critical. During this step, each opportunity is vetted for
cost and quality outcomes. Depending on your value analysis maturity, different analysis
processes will be used. Best-in-class organizations combine both cost and quality analysis, as
well as industry-driven impacts, physician preference, and reimbursement and payment reform
considerations. Though this guide outlines leading practices, the analyze phase can and should
be modified based on the organization’s needs and structure.

Analyze Data,
Content and
Experience
Validate
Establish or Evaluate
Committee Based on
Decision Analysis

Evaluate Total Negotiate

Cost of with Suppliers
Ownership During the
Process

Analyze Data, Content and Experience

The purpose of the analyze phase is to bring disparate information that has been gathered to
tell a story. In the end, you should have a total cost, quality, safety and outcomes story along
three areas that looks at both the historic and current picture versus the potential landscape of
change. These areas include:
• Clinical and product information – viability and availability
• Quality, safety and operational information – experience, process and outcomes
• Financial and contract information – total cost and reimbursement
• IT, network connectivity, medical device cybersecurity ramifications – HIPAA compliance
and security

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 27
 Recognizing a Need for Process Improvement Rather Than a New Product
As value analysis teams and processes mature, most health systems will develop structured, consistent
pathways for end users to submit new product requests. The mechanism of submission may be a
downloadable or an electronic form with pertinent required information about the nature of the request
(see example on page 45). On these request forms, end users often present rationale to purchase a
certain product as an immediate solution to a problem. However, it is incumbent upon value analysis
leaders to dive deeper.

It is not uncommon to gravitate toward a solution before thoroughly examining the problem that needs to
be solved. Solutions can seem easy, obvious and speedy. Problems, on the other hand, are more difficult
to discuss, can appear nebulous and can raise questions that challenge our assumptions. Although that
solution-first mindset feels comfortable, it may not provide the best odds for success. It may set teams
on a direction that might not deliver the value we expect, and we may miss other paths leading to a
result that more accurately solves the problem. When evaluating new requests, value analysis teams can
implement process steps to assist them in identifying or confirming the problem the requester is trying
to solve.

Consider this scenario. At a multi-hospital health system, a product request was received from a
medical/surgical nursing unit requesting silver-coated urinary catheters with a rationale that there has
been a recent rise in catheter-associated urinary infections (CAUTI). The value analysis team noted
that while there is literature that suggests that silver-coated urinary catheters may reduce the risk of
infections, clinical trials have yielded mixed results. The value analysis team also noted a variance in
CAUTI rates among hospitals and nursing units within the system. Further review revealed variances
in the nursing protocol/policy for aseptic insertion of indwelling catheters. With the help of the value
analysis team and clinical education staff, the health system elected to standardize the nursing protocol/
practice and provide enhanced education to staff in lieu of purchasing a more expensive product. They
were able to decrease the CAUTI rate and sustain it.
In this example, a change in process solved the problem. Because the value analysis team and clinical
education staff revealed a better solution, purchasing a new product was no longer the only or best
option.
When evaluating new purchasing requests, value analysis teams can use the following guiding questions
to assess the problem and potentially offer alternate solutions:

• What problem are we trying to solve? Is there a problem to solve?

• What possible root causes exist? Is there a process/practice element that contributes to the
problem?
• Is the problem’s existence or severity variable across our facilities/departments?
• Is clinical practice standardized across our facilities/departments?
• What outcome is measured, or can be measured, to monitor improvement?

The goal of this exercise is to explore the problem and shape the best response (process and/or
product). This exploration will lead the team to more questions, followed by more research to refine the
opportunity and its value. Expanded exploration allows the team to collect different perspectives from
various stakeholders, test assumptions and answer outstanding questions. The end output will be a
solution that focuses on a validated problem.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 28
 Validate or Evaluate Based on Analysis
To ensure product viability, process differences and overall experience, organizations typically
validate or evaluate products. The choice of which path, validate or evaluate, and the scope of
the initiative will vary by project.
When to validate:
• A clear winner emerges from a clinical or financial perspective.
• A product conversion may be easy to achieve.
• A new supplier is not being considered.
• The product is already in use at the same location.
• Conversion will not have a far-reaching impact.

Validations can be done in one day if the right focus group is convened.

When to evaluate:
• No clear winner is apparent from a clinical and financial perspective.
• Product conversion may be difficult to achieve.
• Conversion will have a far-reaching impact.

Prior to either process:

• Facilitate the process with the supplier.
• Select areas who will participate (service lines/departments/
facilities) based on volume of use or special needs.
• Select individual(s) to champion evaluation/validation.
• Obtain product samples. Avoid using a free product for evaluations.
If you do, then no-charge purchase orders must be issued.
• Provide any necessary training for clinicians participating in validation/evaluation.
• Ask for input from potential product users on clinical acceptability.
• Identify key criteria to measure quality, safety, outcomes and effectiveness.
• Develop an evaluation tool based on key criteria, avoiding
subjective words such as “like” or “dislike.”
• Define timeframe parameters.
• Keep evaluations short – less than two weeks for most products.
Negotiate with Suppliers During the Process
Suppliers can help by facilitating pricing Your potential total costs will depend on supplier negotiations and your due diligence.
concessions with initial uses/adoption
of new technology in exchange for • Complete cost analysis to ensure soft costs and
institutional evaluation of the product. reimbursement are considered, as applicable.
• Conduct negotiation.
• Identify purchase versus lease benefits, if applicable.
• Evaluate consignment or supplier-managed opportunities.
• Consider applicability of risk-based contracting.
• Determine final financial impact.

Evaluate Total Cost of Ownership

Total cost of ownership is the sum of all costs associated with a product or service
or its life. It considers the product or service itself, rebates, training, education,
warranties, maintenance, service, consumables, shipping, etc. Only by calculating total
cost of ownership can you truly understand the financial impact of your decision.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 29
 Is free placement really free?
In healthcare, many suppliers use what they call “free placement” of equipment
as a way of driving usage of their related consumable products. New accounting
rules require greater transparency of such placement arrangements and
categorize any such agreement longer than 12 months as a capital lease. This
means a health system must place the value of the equipment on their financial
statements and depreciate the equipment just as if the system owned it.

This right of use declaration by the Financial Accounting Standards Board (FASB) is
intended to demonstrate that nothing is truly free in these arrangements. The costs
are absorbed across the supply chain and ultimately find their way to patients.

Some health systems have chosen to end free placement of equipment.

However, if your organization chooses to continue these types of arrangements,
we recommend that supply chain leaders and the value analysis team
seek clarity and guidance from the chief financial officer and finance
department on the potential impact to value analysis decisions.

For more detail about accounting rules, visit fasb.org.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 30
 Premier Member Resource: Conversion Analysis Tool
If a decision is made by the value analysis team to convert to a new or different
product, you need to evaluate the cost of conversion as part of the total
cost of ownership. Cost comparisons for product conversions include much
more than just the direct product cost, including, but not excluded to:
• Staffing costs
• Inventory logistics
• Unit of measure differences
• Managing current product inventory (e.g., use, sell, dispose, donate, supplier exchange)
• Distribution costs such as space and storage, cost to move,
shelving specifications and MMIS management
• Rapid and regular conversion rebates provided by supplier
• Impacts to other contracts with the current supplier
• Interdependencies between products
• Communication, training and education
• Dependencies on IT resources, biomed, facilities, construction, infection
prevention, employee health and other support services
• Rewriting and/or revising policies and procedures
• Regulatory requirements and instructions for use (IFU)
• Change in reimbursement from one product to the other
• Changes in cost of care
• Marketing
• Reprocessing and sterilization implications
• Contract and compliance management
• Competency assessment and documentation, as appropriate

Premier’s Conversion Analysis Evaluation Tool will help estimate the cost of conversion
and is available in the PINC AI™ Value Analysis Community. Download it here.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 31
 Pro Forma and Data Collection
Pro forma statements are reports typically used to calculate presumptive financial
results. While you do not need to use a pro forma for every single financial decision,
many healthcare organizations do use a pro forma for large investments, such
as new technology projects or for procedures that may be done at a loss.

While pro forma templates differ for every organization, below is an example
of a pro forma summary that can be provided to executive leadership.

Name of Procedure # of Cases

Supply costs per case $7,200
Staff costs (salary + benefits) per case $917
Total costs per case $8,117
APC reimbursement $15,938
Contribution margin per case $7,281
Projected # of annual cases 36
Annual contribution margin $281,556
Existing cases removed $27,055
Annual contribution margin $254,501

If you do choose to use a pro forma for selected projects,

consider the following reimbursement implications:
• Be aware of any change in reimbursements that would impact
the calculations on your pro forma and update as needed.
• Go back and review billing, coding and reimbursement to validate
the actual reimbursement matches what you expected.

Establish Committee Decision

The analyze stage will conclude with a committee decision – ensuring a balanced decision
does not always mean giving equal weight to each piece of information. Depending on
what is being reviewed, the balance between clinical outcome and financial impact may be
uneven. In the case of an agreed commodity, financial impact may weigh very heavily. In the
case of an emerging technology, the clinical outcome information may prevail. During your
decision point, restate the rationale for the decision and expected outcomes or goals.
Leading practices sourced from AHVAP and adapted based on subject matter expertise from Premier members and staff.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 32
 Implement

Implementation is really a four-step process. It requires:

1. Planning 2. Communication of the Plan 3. Education 4. Implementation

Planning
Engage your key stakeholders in creating the plan. We
suggest you consider the following questions:
• How do your key stakeholders define a safe and effective implementation for this project?
• What do your key stakeholders need to fulfill their role with this new implementation?
• What ongoing support is needed beyond implementation?
Distribution Implications:
• What implications exist regarding product planning and distribution?
• Inventory current dedicated
stock to cancel
• What are price differentials between lowest unit of measure (UOM) vs. bulk?
• Implement new stock levels
based on historical utilization Communication of the Plan
• Coordinate communication of When you begin communicating the plan, remember:
stock availability with conversion • •Communications must be accessible, consistent, timely
plan and staff education
and directed to the appropriate parties.
• •Communication starts at the onset of a project and considers
what needs to be messaged to whom and at what time.
• •Use existing communication templates/processes where possible.
• •If your organization does not have a template communication plan or messaging templates,
look to past initiatives to see what worked and repurpose success wherever possible.

Education
Provide education that is specific to the need and is accessible to participants. By
applying a score to the following questions, healthcare organizations have been
able to determine whether education is as simple as basic information in a memo,
requires a mandatory in-service program, or lies somewhere in between.
• How complex is the product/equipment?
• How high is the potential for harm – patient and clinician?
• How high is the margin for error?
• What is the amount of new knowledge that is necessary?
• Will staff need to change their standard procedures to use the product or service?
(See example on page 43)
Suppliers can assist in
implementation by providing:
Implementation
• Implementation plan with calendar
During the implementation:
• S
 ystematic education plan
and roll out plan for IDNs that
• Ensure adequate support is provided by the supplier.
can be tailored to need • Conduct rounding and provide active oversight during
• C
 ommunication plan and/or the implementation to address any issues.
communication materials
(See example on page 44)
• T
 imely contract activation
acceptance and proactive
conveyance of information to Leading practices sourced from AHVAP and adapted based on subject matter expertise from Premier members and staff.
partners including distribution

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 33
 Monitor
The outcomes that you measure and the control team that will track progress will
vary based on initiative. Reflect on your original project goal and the requirements of
success to ascertain how often and by whom outcome measurement is required.
• Cost savings efforts may be reviewed on a quarterly basis by the responsible
financial party (e.g., supply chain executive, CFO). If part of this effort requires
Look to suppliers and your group a new process of supplier management, ensure there is someone on the
purchasing organization (GPO) to control team who can report on process successes and challenges.
help develop and/or measure key
performance indicators to monitor • Quality efforts such as infection reduction (e.g., CLABSI, CAUTI) may require
clinical and financial results.
ongoing surveillance by your infection prevention and quality teams. If part
of this effort requires new clinical processes, ensure there is a clinician
responsible for reporting process change adherence for impacted areas.
• Review compliance metrics to evaluate the success of a project
(clinical, financial, safety, quality, outcomes and impact).

It seems simple enough. Know what you need to measure, who are the
best to measure and report back. But if not done well and thoughtfully,
entire projects can be abandoned, and considerable work lost.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 34
05

Value Analysis
Methodology
Applied
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 35
 Value Analysis Methodology Applied

Member Organization: 6- hospital academic medical center

Product Reviewed: Peripherally inserted central catheter (PICC)
Product Classification: New product
Comments: The Premier member took a novel approach to value analysis by
inserting clinical integration within the healthcare supply chain and collaborating
with a supplier to reduce the risk of complications and infections.

Step #1 Identify

Value Analysis Interventions Member Interventions

• Validate the need. • The leader of the member’s Vascular

• Define current problem. Access team recognized the need
• Identify future requirements. for change after an examination of
• Review GPO contract compliance outcomes revealed a significantly
and identify opportunities. high CLABSI infection rate.
• Assess for standardization • Although the Percutaneous Central
opportunity. Catheter (PICC) line team was
• Assess new regulations and new re-educated on procedures and
evidence-based practice. processes, they alone did not have
• Address defective products/recalls. ability to get infection rates down.
• Review capital budget requests.
• Identify savings opportunities. • The Vascular Access team leader
• Respond to strategic initiatives. evaluated cost of each CLABSI
• Examine quality safety issues. infection to the organization.
• Complexity Rating.
• Labor.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 36
 Step #2 Gather Information

Value Analysis Interventions Member Intervention

• Collect annual spend and usage data. • After several attempts to re-educate
• Identify supplier capacity. the PICC line team with no change
• Obtain all pertinent cost in outcomes, leaders decided
and support data. to take an alternate route.
• Identify key clinical and non-clinical • The supplier proposed participation
stakeholders and utilization practices. in its new value-add process and
• Assess current practice risk program. The supplier worked
related to supply, equipment directly with the Vascular Access
and purchase services. team, interviewing nursing, physician
• Identify like/current product being and pharmacy staff. Together they
used and determine percentage of reviewed documented practices, policies
conversion (full vs. partial conversion). and procedures. Findings indicated
• Conduct literature review. 32 different policies for vascular
• Obtain benchmarking data. access, and that both processes and
• Investigate community product needed further evaluation.
standards and listservs.
• Identify product specifications • The team included stakeholders
and compare to defined clinical throughout the organization – clinical,
requirements/outcomes. operational and supply chain.
• Analyze reimbursement • The supplier presented findings of its
information when applicable. study to the C-suite, enabling a broader
• Utilize information from understanding of the changes needed
regulatory agencies. to positively impact patient care.
• Review policy/procedures/guidelines.
• Though the Vascular Access
Team was already using a midline
catheter model from the supplier,
the supplier proposed switching to
a PICC midline catheter designed
to help decrease risk of infection.
• Leadership understood that the
new PICC would cost more than
the current PICC and were not sold
immediately on the switch.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 37
 Step #3 Analyze

Value Analysis Interventions Member Interventions

• Complete cost analysis. • The Vascular Access team worked with

• Conduct negotiation. Premier and the supplier to establish a
• Identify purchase versus lease cost/benefit solution that lowered the
benefits, if applicable. risk of making the product switch.
• Evaluate consignment or supplier • The team chose to participate in
managed opportunities. the value-add program, deciding
• Determine if evaluation is necessary. to implement a one-year pilot of
• Establish evaluation parameters. the PICC midline catheter.
• Determine final financial, • Since the Vascular Access team leader
clinical, safety, quality and new it would be difficult to change
potential outcomes impact. minds and behaviors of the team, they
• Explore educational needs also decided that the new PICC would
and opportunities. be the only one used for that year.
• Establish committee decision. • They established evaluation
parameters including:
• Reduction in PICC infections
• Reduction in CLABSI
• The team also initiated further
education and process improvement.

Step #4 Implement

Value Analysis Interventions Member Interventions

• Determine inventory • The team implemented a one-year

management strategy. pilot on the new midline catheter.
• How existing inventory • Holding quarterly meetings with
will be managed. the supplier and Premier to review
• Supplier/distributor notification. CLABSI cases, the team performed
• Identify logistical plan. gap analyses and was able to
• Build item master and charge understand a broader overall picture
master, if applicable. of the care for each patient.
• Develop and execute education plan. • With further training and education,
• Include training schedule the staff became more comfortable
and process. using the new PICC, after learning how
• Design communication plan. best to insert and place the PICC.
• Include rollout process • The team also implemented
outlining specific tasks, due daily audits of the PICC lines.
dates, accountability, etc.
• Collaborate to ensure policy/
procedure/guidelines are updated.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 38
 Step #5 Monitor

Value Analysis Interventions Member Interventions

• Cost savings efforts may be • Achieved 50 percent reduction

reviewed on a quarterly basis by in CLABSI rates.
the responsible financial party. • Achieved 100 percent reduction
• Quality efforts, such as infection year-to-date for PICC infections.*
reduction, may require ongoing • Loma Linda attained a new outlook
surveillance by infection on partnership with the supplier
prevention and quality teams. and Premier, which helped guide
• Review compliance metrics to development of a plan that would
evaluate the success of a project provide better care for the patient.
(clinical, financial, safety, quality, • After assessment of the cost differential
outcomes and impact). from the original PICC, the team showed
positive ROI in purchasing the new PICC.
For more on the Peripherally Inserted • By the end of the one-year pilot, staff
Central Catheter (PICC), including
indications, contraindications, perception had also changed. The
equipment, preparation, techniques positive clinical outcomes changed
and complications, read this
overview from authors Rafael their minds, giving them confidence
Gonzalez and Sebastiano Cassaro. in the product and the new process.
• Though continuing education and
audits were performed, the team
still found issues with compliance
of PICC line maintenance and is
continuing to work on that.

*Data was collected using internal resources

at the facility during the one-year pilot during
2018 and 2019. Data was gathered and reviewed
quarterly. Reduction rates derived from comparing
baseline metrics before the pilot with metrics
gathered at the end of the one-year pilot period.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 39
06

Resources
These resources were designed as samples, using leading practices
and guidance from members of Premier’s Value Analysis Advisory
PRO TIP
Council. Use them in your organizations and modify them as needed to Need help with
work for your team’s structure, culture and operational standards. implementation?
Connect with the
Nexera team of experts

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 40
nalysis Resources

Value Analysis Process Flow

DEPARTMENT HEAD STAFF PHYSICIAN SALES REP OTHER

Value Analysis Materials Mgnt Product Expert

Committee Notified Notified Notified

Initial Review

Product Scheduled NO YES

Urgent?
for Evaluation

Requestor Product Evaluated Product Evaluated

Notified by Product Expert by Materials*

Evaluation NO
Completed by Recommended? Requestor
Product Expert Notified
and Materials

Value Analysis
YES
Committee Notified
Value Analysis NO YES Value Analysis
Recommended?
Committee Rejection Committee Approval

Requestor
Notified
Requestor
Notified

Materials Mgnt
Notified

Materials Mgnt
Orders Product

In-Service
*Materials review should include financial, data sharing, data security
Training Engaged
and other business risks.
Developed by Premier’s 2013 Value Analysis Advisory Council.

2020 | 44
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 41
 Sample Value Analysis Project Plan

Project: Facility Name: Start Date: Completion Date:

Supply Chain Management Coordinator: Stakeholders:
Date
Owner/Resource Yes No N/A Due Date Comments
Completed

Opportunity identified

Usage identified

GPO contract analysis

Customers notified of project

Business partner contacted

Financial analysis completed

Project recommendation to system facilities

All system facilities' customers identified and on-site

supply chain managers notified of pending change
Project announced on service line calls/meetings (e.g., Surgical
Services, Nursing, Facilities, Corp. Educators, etc.)

Distributor notified

Usage forecast provided to distributor

Verify item is built in distributor database

Supply chain manager, on-site supply chain manager, distributor

and/or supplier meet to discuss conversion and establish
go-live date
Supply chain manager, on-site supply chain manager request
distributor inventory
Product education and in-service scheduled, identify type
(e.g., flyers, in-service, etc.)

GPO price activation and/or local contract negotiation initiated

GPO price activation accepted by vendor

Price activation acceptance report emailed to supplier pricing

advocate

Local contract negotiation complete (if applicable)

Complete all documentation needed to load contracts

Item maintenance

New item - send request for item master change

Updated item - changes made to item master

Inventory maintenance

Inventory tracking software updates and maintenance

MMIS requisition maintenance

Project savings reported

Contract cover sheet, savings analysis, all other related

documents saved to repository

Date
FOLLOW UP Owner/Resource Yes No N/A Due Date Comments
Completed

30 days from implementation

Monitor transitioning from old to new items, provide follow up to

subsidiaries as needed

90 days from implementation

Verify old items have been discontinued

180 days from implementation

Business partner review

365 days from implementation

Actual savings validated

Developed by Premier’s 2020 Value Analysis Advisory Council.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 42
 Value Analysis Resources

Product Evaluation Form

Insert Health System

or Facility Logo Here

Name: ________________________________________ Extension: __________________________

Job Title: ____________________________________________________________________________

Product Name: _________________________________ Manufacturer: ______________________

Start Date of Evaluation: _________________________ Length of Evaluation: __________________

Rationale for Evaluation:

□ Dissatisfaction with current product □ New/enhanced technology

□ Expense reduction □ Physician request

□ New supplier’s product □ IT request

□ Not applicable □ Infection control

Please circle the appropriate rating: Acceptable Neutral Unacceptable

1. The product does what it is expected to do. 5 4 3 2 1
2. Accessories are easy to use. 5 4 3 2 1
3. Safety features operate reliably. 5 4 3 2 1
4. Functionality is acceptable. 5 4 3 2 1
5. The product performed consistently. 5 4 3 2 1
6. 5 4 3 2 1
7. 5 4 3 2 1
8. 5 4 3 2 1
9. 5 4 3 2 1
10. 5 4 3 2 1

Comments/Opinions:___________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________

Education or in-service needed? □ Yes □ No

Did this product meet your needs? □ Yes □ No

Would you recommend this product for the health system? □ Yes □ No

Would you recommend and support conversion to this product? □ Yes □ No

Evaluator Signature: _________________________________ Date: ___________________________

Please complete one form per evaluator.

2020 | 46

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 43
sis Resources

Implementation Process

CLINICAL KEY VALUE BUSINESS KEY

STAKEHOLDERS ANALYSIS TEAM SUPPLY CHAIN STAKEHOLDERS DISTRIBUTOR

Product(s) Approved
for Implementation

Consider if product will

be sourced direct from
vendor or via distributor

Key stakeholders are Is there a

identified (end users, current product(s)
education, safety, etc.) being replaced?

Training needs are Determine if we use up Notify distributor

assessed/training existing inventory or for price/agreement
plan established immediately convert loading

Policy change needed?

Establish internal Item established at
Conversion timeline Update EMR
item numbers/ distribution center for
established and finalized
prepare to order ordering (volumes
Establish revenue codes
ordering info, etc.)
Add to change master

Communcation of
conversion plan sent out

Training provided
to key stakeholders

Conversion

Post-Implementation
Follow-Up

This implementation process flowchart represents a general process.

Team structure, ownership, stakeholders and steps may differ for your organization.
Developed by Premier’s 2013 Value Analysis Advisory Council.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved
2020 | 47 | 44
 Value Analysis Resources

New Product Request Form

Insert Health System

or Facility Logo Here

Key questions / information to collect for new clinical product requests:

Product and manufacturer information:

• Product/service name
• Description of the purpose and function of product/service
• Vendor/manufacturer
• Catalog/manufacturer #
• Sales representative name, email and phone number

Requestor or contact information:

• Primary requestor (name, title, email, phone, pager)
• Clinical resource/subject matter expert (name, title, department, email, phone, pager)

Current practice and product/service request rationale

• On what diagnoses/procedures would you expect to use the request product? (description/CPT code)
• Anticipated number used per year
• What are you currently using to treat the types of patients on whom you would use the requested product?
o Current product name(s): __________________________________________________________
o Current product catalog number(s): __________________________________________________
o Current product MMIS number(s):
___________________________________________________
o List any concerns with existing product(s):
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
• How is this product more effective than what you are currently using to treat the same types of patients?
• What other physicians or healthcare providers have agreed to change their practice if the requested product
is approved?
• Where will this product be used?
o Main OR
o ASC
o ER/ED
o Neurology
o Cath Angio
o Endoscopy
o Imaging Services
o Laboratory
o Patient Care Units
o Other _________________________________________________________________________
• Will this product be used in conjunction with a piece of equipment?
o If yes, define: ___________________________________________________________________
o Is the required equipment already available within the health system?
• Does this product require training or in-service?
• Does this product fall into the classification of green initiative?
• Are there budgeted/approved funds for this product/equipment?

Disclosures
Follow your organization's Conflict of Interest policy and procedures.

Leading practice developed by Premier members and Premier's 2020 Value Analysis Advisory Council.

2020 | 48

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 45
 Value Analysis Resources

Product Value Assessment

Insert Health System

or Facility Logo Here

Impact checklists can be converted into a scoring tool or a series of questions.

OUTCOMES: Describe the product’s impact on patient outcomes

Decreases mortality
Decreases infections/complications
Decreases readmissions
Decreases length of stay
Decreases procedural times
No known impact on patient outcomes
N/A
Other ____________________________________________________

Select the BEST possible option listed below that serves as a Level of Evidence (LoE) to support the product’s impact
on patient outcomes
Meta-analysis of multiple controlled trials or randomized controlled trial Non-randomized
controlled trial
Integrative reviews/descriptive or correlational studies
Peer-reviewed professional organizational standards
Vendor/Manufacturers’ data
Theory-based evidence/expert opinion/case study
Other ____________________________________________________

SAFETY and COMPLIANCE: Describe the product’s impact on safety and compliance
Addresses Sentinel Event
Addresses SAFE or near miss
Addresses survey deficiency
Insures compliance with applicable regulatory agency/body
N/A

PRODUCTIVITY/SATISFACTION: Describe the product’s impact on productivity/satisfaction

Addresses or reduces safety risk to staff
Improves comfort/satisfaction (patient, MD, healthcare provider or staff) Decreases
steps/streamlines or automates process
Enhances patient experience
N/A

UTILIZATION: If this request is approved, it would:

completely replace the current product for you and all other users.
partially replace the current product for you and all other users.
have no impact on the current product for you and all other users.

STRATEGIC GROWTH: Describe the product’s impact on strategic growth

This product is linked to an approved business plan.
Business plan number: ____________________________________________________
VP/Sponsor: ____________________________________________________________

N/A

2020 | 49

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 46
 Conversion Analysis Evaluation Tool

Insert Health System

or Facility Logo Here

Product Category:

Estimated Annual Spend

Estimated Annual Savings Total Cost of Conversion

Estimated Percent Savings

1st Shift
Length of Eval-
Hours per Estimated
Staff # of Staff Hourly Wage uations (# of Estimated Cost
Week Hours by Staff
Weeks)
Doctors
Nurses
Technicians
Educator(s)
VAC
Other
Total Estimated Cost

2nd Shift
Length of Eval-
Hours per Estimated
Staff # of Staff Hourly Wage uations (# of Estimated Cost
Week Hours by Staff
Weeks)
Doctors
Nurses
Technicians
Educator(s)
VAC
Other
Total Estimated Cost

Distributor/Direct Requirements
Will product go through current distributor? Yes No
Will department purchase direct from vendor? Yes No
Will there be any additional direct cost? If yes, please explain below. Yes No

Additional Cost

Total Estimated Cost of Conversion

Reason(s) For or Against Product Conversion

The Conversion Analysis Evaluation Tool is available in the PremierConnect® Value Analysis Community. Download it here.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 47
 Value Analysis Peer Connection and Certification
Want to continue your education journey beyond this guide? Below are
some resources for additional instruction and certification.

Association of Healthcare Value Analysis Professionals (AHVAP)

AHVAP is nationally recognized as the preeminent clinical resource in
providing education, resources and networking to value analysis professionals
and promoting value analysis in the healthcare community.

Value analysis professionals drive value for their organizations by collaborating with clinicians
and multidisciplinary teams to deliver optimal patient outcomes in a cost-effective manner.
AHVAP’s mission is to provide and promote processes and information to assist value analysis
professionals in evaluating healthcare services for clinical quality and cost effectiveness.

AHVAP was a partner in developing the industry’s first and only healthcare value
analysis credential: Certified Value Analysis Healthcare Professional.

Certified Value Analysis Healthcare Professional (CVAHP)

CVAHP was created to meet a growing need in the healthcare industry – skilled value
analysis professionals who can deliver outcome-driven, patient-centered care.

To be eligible for the CVAHP examination, a candidate must meet the following requirements:
• Associate degree or higher equivalent from an accredited college or university, and three
years of associated healthcare resource and materials management experience.
• High school diploma or equivalent, and five years of
associated healthcare value analysis experience.

For more information, visit the AHVAP website.

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 48
07

Contributors
Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 49
 2022, 5th Edition
• Jillian Jalbert, RN, BS, ESQ, Director of Clinical Services, Yankee Alliance
• Dawn-Marie Russo, Senior Sourcing and Value Analysis Manager, Boston Children's Hospital
• Amy Monroe, RN, BSN, Corporate Manager Clinical Sourcing, McLaren Health Care
• Laura Polson, BSN, RN-BC, CVAHP, System Services Director,
Clinical Quality Value Analysis, Baptist Healthcare, Inc.
• Thomas Kennedy, BS, Senior Contract Administrator, Yankee Alliance
• Steve Thomas, MBA, CMRP, Purchasing Manager, Genesis Health System
• Jeanne McHugh, Ph.D., MLS(ASCP)SH, SBB, LSSBB, Assistant Director,
UHS Corporate Laboratory Purchasing, UHS
• Robin Lane, RN, BSN, MBA, CVAHP, Director, Value Management & Analysis, UPMC
• Jack Henalt, Director of Supply Chain & Clinical Engineering, Berkshire Health Systems
• Jon Oelerich, Client Service Administrator, Lead Genesis Health System
• Sue Toomey, BS, CMRP, CVAHP, St. Luke’s University Health Network
• Barbara Nicholas, DNP, MBA, RN, St. Luke’s University Health Network,
(adhoc SME) Advisor, St. Luke’s University Health Network
• Wayne King, RN, Director, Value Analysis, Community Healthcare System
• Omar Beltran, MBA, MSN-L, MSN-AGACNP, Supply Chain Shared Services,
Value Analysis, Honor Health
• Michael Watkins, Chief Operating Officer/ Chief Compliance Officer, North Oaks Health System
• Janet McMehan, BSN, RN, Clinical Value Analysis Facilitator, Community Healthcare System

2020, 4th Edition*

• Roger Esparza, MBA – Senior Product and Contract Utilization Manager,
Harris Health System
• Juan David Garcia, MBA, MLS – Administrative Director Laboratory,
University of Texas Medical Branch
• Jillian Jalbert, RN, BS, Esq. – Director of Clinical Services, Yankee Alliance
• Robin Lane, RN, BSN, MBA, CVAHP – Director, Value Management & Analysis,
University of Pittsburgh Medical Center
• Sofya Mikhelson – System Director, Supply Chain, Fairview Health Services
• Sandra Monacelli, MBA, BSN, RN, CNOR – Vice President, Nexera, Inc.
• Amy Monroe, RN, BSN, CVAHP – Corporate Manager Value Analysis, McLaren Health Care
• Laura Polson, BSN, RN-BC, CVAHP – System Services Director, Clinical Quality Value Analysis,
Baptist Healthcare, Inc.
• William Richmond – Value Analysis Coordinator, Hospital Shared Services Association
• Cindy Siegel, MBA, CRA, CFHA – Corporate Director, Imaging Operations,
Universal Health Services
• Steve Thomas, MBA, CMRP – Manager, Purchasing, Genesis Health System

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 50
 2018, 3rd Edition*
• H
 unter Chandler, MBA – Director of Supply Chain Information Systems,
Wake Forest Baptist Medical Center
• P
 amela Darnell, RN, MSN – Clinical Resource Consultant, Billings Clinic
• R
 oger Esparza, MBA – Supply Chain Management, Value Analysis Project Manager, Harris Health
• C
 hina Krupin, MSN, RN – Clinical Value Analysis Specialist,
Surgical Services, Bon Secours Health System
• D
 on Landek, MS, MT(ASCP), SC(ASCP) – Administrative
Director, Laboratory Services, University Hospitals
• S
 ofya Mikhelson – System Director, Contracting, Fairview Health Services
• A
 my Monroe, RN, BSN – Corporate Manager, Supply Chain Management, McLaren Health Care
• L
 aura Polson, BSN, RN-BC, CVAHP – System Services Director, Clinical Quality Value Analysis,
Baptist Healthcare System, Inc.
• J
 ennifer Raltz, PharmD, R.Ph – Senior Director, Clinical Services, Yankee Alliance
• B
 ill Richmond, CST – Value Analysis Coordinator, Evergreen Healthcare
• C
 indy Siegel, MBA, CRA, CAAMA – Corporate Director
Imaging Operations, Universal Health Services
• S
 teve Thomas, MBA, CMRP – Manager, Purchasing, Genesis Health System
• K
 itty Williams, RN, CMRP – VAT director, Riverside Health System

2016, 2nd Edition*

• P
 amela Darnell, RN, MSN – Clinical Resource Consultant, Billings Clinic
• R
 oger Esparza, MBA – Supply Chain Management, Value Analysis Project Manager, Harris Health
• C
 hina Krupin, MSN, RN – Clinical Value Analysis Specialist, Surgical Services,
Bon Secours Health System
• D
 on Landek, MS, MT(ASCP), SC(ASCP) – Administrative Director, Laboratory Services,
University Hospitals
• D
 onnie McLaughlin – Director, Logistics and Value Analysis, UT Southwestern University Hospitals
• A
 nn Marie Orlando, RN, RCIS – Value Analysis Specialist, Yankee Alliance
• S
 teve Thomas, MBA, CMRP – Manager, Purchasing, Genesis Health System
• J
 ohn Vlahopoulos, PharmD, R.Ph – VP Clinical Services, Yankee Alliance
• K
 itty Williams, RN – VAT Director, Riverside Health System

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 51
 2014, 1st Edition*
•  indy Christofanelli, RN, MSN, CMRP – System Director,
C
Supply Chain Management, SSM Healthcare
• Pamela Darnell, RN, MSN – Clinical Resource Consultant, Billings Clinic
• Mary Gentile, RN, MSN – Clinical Value Analysis Manager, Baystate Health
• Jim Gleich, RN – Interim Director, Supply Chain Management, St. Anthony’s Medical Center
• Kevin Hunt, RN, BSN, MBA, CMRP – System Director, Supply Chain Value Analysis, Peacehealth
• Janee Macklin, RN, MSN – Clinical Utilization Manager, McLaren Health Care
• Linda Moore, RN, MSHA – Clinical Contracts Manager, Rochester General Health System
• Ann Marie Polichena, BA, MBA – Client Services Manager, Champs Group Purchasing
• Lisa Rogalski, RTR, CMRP – Director of Materials Services, Genesis Health System
• Steve Thomas, MBA, CMRP – Manager, Purchasing, Genesis Health System
• Jeannie Vaughn, RN, MSHA – Value Analysis Director, Cape Fear Valley Health Systems
• Dee Whittington, RN, BSN, CNOR – Clinical Supply Program
Director, Supply Chain, Banner Health
• Kitty Williams, RN, CMRP – Senior Manager, Value Analysis, Riverside Health System

Thanks to Premier’s team of subject matter experts and contributors:

• Mike Alkire, President and CEO, Premier
• Karen Niven, RN, BSN, MS, CVAHP – Senior Director, Performance Groups, Premier
• Brooke Barrier, MHA – Growth Marketing Manager, Premier
• Shannon Hunt, RN, BSN, BSBA, CVAHP, CMRP, Lean Six Sigma Black Belt – Vice President,
Academic Initiatives, Premier
• Jim Chambers, Director Value Analysis, Nexera Labor, Nexera Inc
• Carole Boutilier, Director Value Analysis, Nexera Labor, Nexera Inc
• Sandra Monacelli, Vice President, Value Analysis, Nexera Labor, Nexera Inc
• Sharon Roberts, Service Line Director, Performance Groups and PPI, Premier
• Jordon Orr, Graphic Designer, Premier
• Kay Mahon, Senior Graphic Designer, Premier

*Titles, credentials and organizations reflected as they were at time of each publication.

The content contained herein is for educational and informational purposes only and
shall not be construed as legal, tax, accounting or other advice. Please consult your
legal professional or other applicable professional to determine the impact on your
organization. Content and embedded links are accurate at the time of publication.

Contact us for more information on value analysis for your organization.

[email protected] | 877.777.1552

Value Analysis Guide 5th Edition. © 2022 Premier Inc. All Rights Reserved | 52
2 210 0 4 01V 7