Innovation and Optimization Balancing

I recently spoke about innovation versus optimization and how we tend to overlook optimization in healthcare. 

One comment suggested we risk missing out on new ideas if all we do is focus on squeezing just 1-2 percent in cost reduction. 

Now, I believe in innovation, it’s important for hospitals to think differently and expand. 

At VIE Healthcare®, we have a track record of innovation in areas, including our patented spend technology Invoice ROI™.

My point about optimization is the discipline required to take a deep dive to ensure all cost savings opportunities are maximized. 

I’m not suggesting hospitals commit time and resources for just 1%. 

In my experience, cost savings of 10-20 percent are often achievable. 

Nearly two-thirds of hospitals have been slow to scale innovation and less than half have a mechanism for moving forward in this area.

Hospitals need consistent and guaranteed cost savings. 

In innovation it isn’t only about numbers, it’s also about how it will impact your hospital and enhance patient care.

Innovation can play a key role in reducing costs, but there has to be accountability.

If we focus exclusively on innovation, the end result is a lot of ‘’generalists’’.

I believe optimization enables people to become specialists. 

I also believe there’s a balance between knowing when to move on from optimization and beginning to think about doing things differently. 

That’s a balance individuals learn through experience. 

Sometimes you’ll get to the 1% and realize you’ve maximized your cost savings on a project. 

As we know from this past year, times and situations change. 

I believe in revisiting projects and asking questions such as:

‘’Have we gone back to a manual process?’’

‘’Are we still following the processes we implemented to optimize cost savings in this area?’’

In healthcare, we need to strike a balance between the benefits of optimization and innovation. 

Reach out at lmiller@spendmend.com to discuss your cost savings goals and how we can support and accelerate cost savings opportunities in your organization.