This article was written by Lisa Miller.
Cost Savings Spring at Year End
Last month—one of our clients needed to make a big impact in their year-end cost savings goals.
They asked me how VIE Healthcare could help them in support of this pressing goal of achieving cost savings within 30 – 60 days.
I shared with them that we have a 30 Day Cost Savings Sprint and that the #1 way to identify and achieve cost savings rapidly is by running and analyzing two reports:
1) A detailed 12-month PO data report.
2) A 12-month med/surg distribution spend report by line item and connecting each item to the specific contract pricing and tiers with the current pricing in place.
VIE would then perform a benchmarking analysis of each item and focus on the top spend, the most utilized items, and the items that were trending higher in volumes over the past three months.
We identified three things:
1) High cost implants weren’t receiving the same discount level that their other implants were receiving from the same vendor and same service line. Since they were “off-contract” implants and newer items, the pricing wasn’t in line with their agreement.
2) Some of their physician preference items were not priced competitively.
3) Med/surg items on the distribution report were not connected to the correct pricing agreement—resulting in both cost savings and credits due to the hospital. VIE provided the detailed analysis and worked with the hospital to negotiate with the vendors so the cost savings and the credits due were achieved rapidly.
The results: Within 27 days, our client had achieved $318,937 in annual cost savings. And, we are continuing to work on more cost savings so we can end the year achieving $500,000 in annualized cost savings that will hit our client’s bottom line immediately and that will be fully realized in 2020.
A big financial impact can be made in a short amount of time at your hospital. Click To Tweet
If you would like to end 2019 with additional cost savings—send me an email so we can have a call and support your hospital to achieve your final year-end cost savings goals.