Annual Subscription Costs
An Investment or Growing Expense?
Annual paid subscriptions comes in all forms and called by various names – they provide your hospital with new information, provide benchmarking services, gives your organization access to peer networking groups and provides analytics for your hospital in different departments.
Many of these annual subscriptions provide value to your organization. However, many are not being used at all, forgotten about, underutilized because the user is not fluent in all aspects of the subscription and also underutilized because the entire organization isn’t aware of the subscription and in this case you could have duplicate subscriptions from different providers. And each year, these subscriptions grow because we now live in an information based society. On average, a 200-bed hospital spends $1.7 million annually on subscriptions; that is $8,500 per bed for annual “subscriptions.”
Is this a cost that should be reviewed each year? I say definitely Yes!
The questions I pose to my clients are:
- Do you know how much your hospital or health system is paying in annual subscription costs?
- Have you mapped your subscription costs to a department(s) and are they using this subscription to its full capability?
- Have you performed a thorough review of your subscriptions to see if other departments could utilize them?
- Have you gone to the marketplace to evaluate other subscriptions or services that may be better for your hospital?
- Have you performed an assessment of value of each subscription – a true ROI?
- Could you receive these subscriptions at a lower cost or even at no cost? Have they been negotiated so that you are receiving competitive market pricing?
- Do you have an independent way of assessing your subscriptions?
Here is an example of one of the many hidden subscription costs that may exist in your hospital:
GPOs provide subscriptions to hospitals in different areas like peer benchmarking within their membership, quality analytics or service line analytics and these annual memberships are between $50,000 to over $200,000 annually. You don’t see these on your AP spend because they are “hidden.” They are deducted from your administrative fees – dollars that you receive annually from participating in a GPO. The payments from your GPO are reduced by paying for these subscriptions.
My recommendation is that you review your GPO agreement to see what subscription costs are being paid by your administrative fees and have a thorough understanding of these subscription costs. Many times, hospitals are surprised to see that hundreds of thousands of dollars are not coming back to them from their GPO as they thought because these dollars are being used to pay for subscriptions that are not needed, not being used or being under-used.
What if your organization could reduce your subscription costs by 50% without any change to your hospital operations? That could mean an immediate $500,000 to $750,000 or more to your annual budget that you could use for new programs, technology and capital improvements.
And -with better visibility to the entire organization, your subscriptions will have maximum optimization that will deliver operational and financial results.
Healthcare reform requires us to look at every opportunity for cost savings and most importantly, on-going disciplined cost control.
VIE has a proven system to uncover all of your annual subscription costs, assess their value with your stakeholders, compare other subscriptions in the marketplace and ensure you are paying the best price for these subscriptions.
Email Lisa Miller to learn about VIE’s subscription review. It is self-funded, requires no upfront costs and it is completed within 30 days.
Lisa Miller – email@example.com
Founder & President VIE Healthcare