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July 8, 2004         

How To Find New Innovative Ways To Save “Big Bucks” In This New Age Of Healthcare Austerity

by Robert T. Yokl, President

“You Don’t Need Bigger Budgets, More Staff  Or A Lot More Time To Save “Big Bucks; You Just Need Some Big Ideas To Innovate On The Cheap”.

 In this new age of healthcare austerity, we all have heard the mantra “doing more with less” -- with the emphasis on more.  Find more savings, uncover more ways to increase performance, hit upon more positive outcomes with less staff, smaller budgets, and no time.  This fact of life in healthcare today has left most healthcare executives feeling frustrated and discouraged as they see their ability to grow revenues lessening, while at the same time their ability to unearth new savings opportunities is decreasing. 

Yet, the conventional wisdom that you need bigger budgets, more staff or a lot more time to save “big bucks” is really a myth; you just need some big ideas to innovate on the cheap. To get you started on this journey, here are five proven ways to innovate (to investigate new ways of doing something) on the cheap:

1.        Raise the number of innovators that are working on innovation projects.

Most healthcare organizations have a small number of department heads and managers involved in their innovation projects, i.e. value analysis committees or teams, total quality committees or teams, revenue enhancement teams, etc. Just image what your innovation to success ratio would be if you had twenty or thirty department heads and managers working on innovation projects at all times -- not just sometime.

2.        Raise the number of incremental innovations vs. breakthrough innovations.

We would all like to hit home runs every day, but the reality of our any workplace is that breakthrough innovations only happen about every five years, if at all.  Don’t wait for breakthroughs to happen.  Have as your innovation goal to hit singles, doubles and triples every day, every week and every year and the breakthrough innovation will surface along the way.

3.        Raise the number of external resources you employ for innovation.

No matter how creative your administrative staff and department heads and managers are, there’s still more innovation available to you outside your organization. For example, you can work with universities on your research and development, or license concepts, solutions and technologies from innovators, join consortiums to seek out new ideas, or acquire Linux® software on the internet for free. There is no limit to the external resources available to you – if you search them out!

This is why companies like Procter and Gamble actually set a goal that 50% of their innovation will come from outside their organization every year (P&G is the company who discovered the new innovative products: White-strips teeth whitener, SpinBrush battery power toothbrush and the Swiffer cleaning cloths from innovators outside of their company).

4.        Raise the number of experiments that lead to innovation.

Experimentation (or learning from your experience and failures) is the root of all innovation. Remember, it took Thomas Edison 10,000 experiments before he discovered a working light bulb.

If you aren’t continuously experimenting (searching, testing, discovering, studying, trying, piloting, exploring, observing, and measuring) with new ways of doing things your experimentation to innovation ratio will be very low or non-existent.  However, if you are aggressively experimenting as Thomas Edison did with new ideas; your experimentation to innovation ratio will be off the wall in no time.

5.        Raise the level of commitment and stick-to-it-ness with your innovation projects.

Innovation gets a good start, then stops, then starts again, then sputters and dies at most healthcare organizations today.  This is cause by a low level of management commitment or the absents of the necessary stick-to-it-ness to see the innovative project through to its conclusion.

On the flip side of this tendency to quit before you even get started, are organizations that never give up until they have exhausted (and have shed blood, sweat and tears over the project) all possibilities and potentialities that they can think of. This zeal and fanaticism can only be obtained by raising your level of management commitment and stick-to-it-ness to stay the course until innovation happens.

Real innovators in the marketplace have always been about “doing more with less” and they still stay highly competitive. That’s the secret formula behind the huge success of WalMart, Costco, and Target.

It’s important to take note of the fact that the age of austerity in healthcare isn’t going to go away.  It’s just going to take on a new form as we adapt to the influx of the baby boomers onto the Medicare rolls in a few years. This reality only leaves one choice for all of us in the healthcare, which is that the survivors in this ever-changing market must learn to grow and innovate on the cheap.

About the Author

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

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