This article was written by Lisa Miller.
Getting in front of your cost savings is the fourth mission critical component to manage your outsourced agreements effectively.
You’ve accessed your line item details, carefully scrutinized the terms of your outsourced agreements and renewed those contract terms to include substantial cost savings. You’ve benchmarked and agreed on new pricing and you’re feeling confident about your new contract.
How do you not only maintain those cost savings but get in front of them and eliminate the need for retrospective action?
That’s a big part of our messaging here at VIE Healthcare®.
How can you automate that process so it becomes a seamless part of your financial management? This is also about enabling your staff and your teams to be able to:
- Better manage spend and the opportunities to automate.
- Access line item details in your invoices.
- Accurately project and control future costs.
The sooner your hospital can get into that position, the better.
Get in front of your cost savings: Automating your line item details
At VIE Healthcare®, we are fully committed to ensuring our clients gain full access to the line item details of their invoices. Our extensive frontline expertise has enabled us to develop and utilize a proven process to identify, analyze and deliver significant cost savings in hospital outsourced agreements.
To achieve this, we have an automated, patented process, Invoice ROI™ to both access that information in your invoices and reconcile it in real-time.
Invoice ROI™ is an invoice reconciliation, contract optimization, business intelligence and analytics platform with real-time contract reconciliation and benchmarking performance. This is provided on a monthly basis to deliver immediate guaranteed margin improvement.
With an in-depth examination of hospital spend, Invoice ROI™, combines line details with other data inputs that identify trends, variations, quality and utilization improvement opportunities for pro-active monthly management of your outsourced agreements.
To summarize, Invoice ROI™ enables you to get in front of your cost savings.
Case Study: Reference lab
Reference lab is a pain point for most hospitals. Health systems are frequently faced with hundreds of pages of invoices for many different reference labs which typically contain multiple pricing issues. In this example, one of our client’s invoices contained 5,719 tests.
While these pricing issues can be related to not being invoiced at the correct price, we often find that prices are off contract and relate to new tests which aren’t covered by an agreement.
In this case study, on a contract worth $500,000, there were tests to the value of $200,000 that didn’t have an agreed price attached to them.
In addition, we were really able to help this client not only benchmark, but also explore opportunities to bring tests inhouse because they were able to see the test by line item detail in a way that they could manage effectively.
This process allowed them to get in front of their cost savings.
Monthly reviews of your outsourced agreements
If your hospital is implementing automation and using real-time data, it must be a monthly activity. A review of 12 months may show that $75,000 was spent, but monthly line item analysis would reveal that the previous three months had been trending up 30%.
Reviewing the spend in your hospital’s outsourced agreement isn’t an event that takes place every three years. Monthly line item analysis is critical for effective cost management. Click To Tweet
It isn’t a one-time event that takes place every three years. You wouldn’t manage your supplies that way.
At VIE Healthcare®, our goal is to get all health systems to manage the spend covered by their outsourced agreements in an innovative and more cost effective way.
This is the fourth and final mission-critical requirement to maximize the cost savings opportunities in your outsourced agreements.
Read our previous blogs here:
Summary: 4 Mission Critical Components
Component 1: Access to Line Item Details
Component 2: Understanding the Terms of Your Outsourced Agreements
Component 3: Benchmarking
Discover best practices for your hospital’s outsourced agreements. Download our Purchased Services Executive Report.
Schedule a call with Lisa Miller to get in front of the hidden cost savings in your outsourced agreements.