A Quick Guide to Understanding the Hospital Value Analysis Committee

In the past five years, the medical device sales industry has changed drastically, and one of the biggest changes was the introduction of the hospital Value Analysis Committee (VAC). Per GreenLight Medical findings, Value Analysis Committees came into existence as cost cutting pressures increased, and hospitals realized that many excess expenditures occurred during the supply chain process.

Why the need for Value Analysis Committees?

The VAC’s primary focus is to ensure that every product purchased provides a unique value proposition. The VAC receives product input from many hospital departments and considers a variety of factors. These factors include clinical outcome, product quality and comparison, financial analysis, and education.

By including different perspectives, the VAC creates a more inclusive and comprehensive evaluation process, reducing supply chain silos. According to Carlson, hospital reports claim that Physician Preferred Items (PPIs) make up between 40%- 60% of a hospital’s supply costs (Definitive Healthcare). However, through standardization and cross-collaboration, hospital VACs have the potential to mitigate the excessive costs that stem from PPIs. In addition to the hospital benefits, VACs ensure optimal patient care, as products are more carefully considered and analyzed. (Carlson).

How does a Value Analysis Committee function?

In many hospitals, the medical sales representatives bring the product information to the Value Analysis Committee before the hospital is permitted to use the product. The VAC then deliberates over the data provided to assess the products. During this process, they analyze the clinical and cost benefits, as well as compare products. If the Committee decides that the product provides a unique value to the hospital and patients, they will continue negotiations with the representative regarding pricing, frequency of purchase, and other contractual matters.

Who is included in the Value Analysis Committee?

Because a major role is to determine a hospital’s need for a particular product, the VAC must cross-function with other departments to perform a proper audit. The Committee usually includes physicians, nurses, administrators, supply chain specialists, risk mitigation specialists, and purchasing agents (Carlson). For an approval to be granted, the medical representatives must demonstrate to all involved that implementation makes sense from a financial, clinical, and relative standpoint.

How does a Value Analysis Committee affect the Medical Sales Representative’s Role?

As Value Analysis Committees integrate into hospital ecosystems, the role of the medical sales representatives changes. Rather than forming relationships with the physicians who use the products, the primary goal of the representatives becomes demonstrating the superiority of the products to the VAC.

For a downloadable value analysis checklist to facilitate product submissions, please email support@greenlightmedical.com.

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Carlson, Andreya. Pass or Fail: What Value Analysis Committees Want. (2017, August 29). Retrieved January 29, 2018, from http://kascope.com/pass-or-fail-why-value-analysis-committees-matter-and-what-they-look-for-in-medical-device-design-2/

Healtcare, D. (n.d.). Reining in Hospital Supply Costs and Physician Preference Item Spending. Retrieved January 29, 2018, from https://www.definitivehc.com/news/reigning-in-hospital-supply-costs-and-physician-preference-item-spending