Implementing changes to improve your cost structure to realize savings must be a priority for healthcare leaders. As the US stands on the cusp of a new era of price transparency, healthcare costs rose to $3.6 trillion in 2018[1], while rural hospitals saw a record number of closures in 2019. [2] These three foundations to
To ensure that costs are managed effectively, your hospital must adopt robust strategies and learn how to manage your IT healthcare spend. Technology has the potential to drive healthcare forward, make it more accessible, improve operational efficiencies and enable your hospital to provide better patient care. However, barriers to effective benchmarking exist. Technological advancements are
Physician preference items (PPIs) are often comprised of the most expensive products ordered by hospitals and can have a negative impact on your hospital’s operating margins. In this blog, I outline 5 key steps to physician preference item optimization. The True Cost of Physician Preference Items The most successful healthcare organizations know how to optimize
Understanding the clinical, financial and operational terms is the second of the four mission critical components essential to manage your outsourced agreements and identify vital cost savings for your hospital. Most of the time, we find that hospitals instinctively want to begin with benchmarking, but this is the third step in the process. The first
It takes a lot of work to get a high performing contract in place. They don’t just happen from an RFP or a benchmarking exercise or from obtaining terms through your GPO. A high performing contract is built on four key areas: Analysis Strategy Negotiation Performance Management Let’s discuss a contract renewal. We recommend that you internally run a report or obtain 12 months of invoices
In this blog, I outline three reasons for your hospital to negotiate with your vendors. How does your health system approach pricing and contract negotiations with your vendors? Financial pressures on hospitals remain strong. The current healthcare environment is extremely challenging for all healthcare organizations. The American Hospital Association (AHA) predicts that up to half
All hospitals rely on outsourced agreements and services to deliver quality patient care, but they are complex, with financial and operational implications. In this new blog series, we will cover the four mission critical requirements to effectively manage your outsourced agreements (also referred to as purchased services). In this introductory article, we highlight those four
For hospital leaders required to deliver margin improvements, generate more revenue and provide value based care, hospital outsourcing can be an attractive solution. Before making that decision, I advise reviewing my 7 steps to optimize outsourcing in your hospital in order to ensure high performance from your providers. Outsourcing is a growing market in US
This article addresses the CMS rules on price transparency and how your organization should respond. As of January 2021, hospitals in the US are required to provide price transparency in a way that has never been seen before. Every hospital must deliver a plan for price transparency. Healthcare is one of the most regulated, if
The storage, processing, and analysis of big data plays a significant role in the decision-making process in many of today’s industries. The healthcare sector, notably hospitals, must effectively capture and process big data with analytics to achieve higher quality patient care through new technologies. As a result, data analysis plays an integral role in improving
Uncovering overlooked costs and spend sources is vital to ensuring your hospital maximizes its profit margins. US healthcare costs are projected to continue to rise by an average annual rate of national health spending growth of 5.5% through 2027 according to the Centers for Medicare & Medicaid Services (CMS). [1] While all hospitals monitor their
Ensuring quality and financial high performance from outsourced providers is kind of like making a spanakopita from scratch—when you don’t have the recipe or guidance from a master (or even know what it is. Google it.) One word—disaster. Following these steps will make it easier to execute. It’s important that the senior leadership of the
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