For any of you who aren’t phonetic spellers, or a fifteen year old girl texting her “bf”, the alpha--numeric combo above is pronounced “evaluate”. I’m sure you’re asking yourself, “ Where do these darn kids come up with these silly abbreviations?” Apparently they get them from the National Business Coalition on Health.

That’s right. “eValue8” is actually the technical name the NBCH uses for the process by which they evaluate health care purchasing and quality improvement across the nation. It is used to compare transparency, cost, quality, and efficiency of a sample of health plans that represents that represents over 100 million Americans. You can view a full copy of the report by clicking here or catch the highlights in this press release. All kidding about the name aside, the report actually comes up with some pretty interesting data about the current state and future of the Healthcare arena.

While this particular study “identified opportunities to reduce waste, address gaps in care, structure payment reforms and improve consumer engagement” I found that the study, or at least being exposed to it, illustrated a valuable procurement lesson. How does one judge procurement effectiveness without a benchmark? If there is no standard to which the procurement of a given product or service can be compared, how do we measure our effectiveness as purchasers?

The fact of the matter is that some product categories are complicated, some are esoteric , and some are just plain boring. It is impossible for any individual and even most companies as a whole to be a subject matter expert in every category of spend. So, do we wander blindly? Do we low-ball everyone and really “stick it” to the supplier? Do we pour over gigs of data before purchasing a nut or a bolt? The answer, of course, to all of these questions is no. To overcome some of the more elusive product categories we must make use of our resources.

Of the myriad resources every purchasing professional should have at his or her disposal, three of the most important are internal personnel, industry publications, and the supply base itself. Internally, purchasers should diversify their team’s (no matter how small that team is) subject matter knowledge base so that at least one person on the team has at least a tenuous grasp on product specs and the mechanics of the supply base for most of the key purchasing categories.

Industry publications are also a great way to increase subject matter knowledge without breaking the bank. These subscriptions are generally relatively inexpensive, and there are many online and print versions available for even some of the most obscure spend categories. Investing in access to these resources will pay dividends at the negotiation table. There are literally millions of directories for finding these publications online. You can click here to check out a free directory I found.

Believe it or not, your own supply base can supply a wealth of information on any product category if you have the initiative to take an interest in the mechanics of the industry. One thing that is universally true about all salespeople is that they love to talk. A few well placed questions with different suppliers can illuminate some of the more important product or service attributes and help you to establish reasonable goals for pricing.

Healthcare is often considered one of the most complicated, convoluted spend categories organizations face. If resources like eValue8 exist out there for something as arcane as healthcare, there is no excuse to wallow in the darkness of procurement confusion. Make use of the resources you have at hand to increase your organizations overall purchasing competency level. As a first step, it might be a good idea to take a critical look at your purchasing habits for a few items on each end of the “mundane to complicated” spectrum. You may very well find that some categories are not as simple as they seem, and others, not as mysterious.

Source One offers specialty Strategic Sourcing Services for Healthcare
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