It’s critical that hospitals take the time, make the commitment, and lean on expert resources for cost savings. You never want to simply skim over purchased services.
For example, if conducting a sleep study, it’s important to map it to reimbursement. Hospitals will often cite a 10%-15% discount they receive as “good enough”, but upon deeper analysis the study was still run at a loss or at the very least they were not as profitable as they should’ve been.
Look at the invoices, look at the contract, and then match those invoices to the contract. You need to be understanding utilization, looking at reimbursement when you can, and benchmark. If you’re simply looking at a price, you’re not doing your due diligence to ensure you’re optimizing costs. There are so many different components you need to be keeping a pulse on.
You also need to be looking out for hidden fees. Again, one of the many disadvantages of simply looking at a price is that you may not catch the fees that you didn’t even know you were paying! When you’re able to truly understand and pull apart each component of a final price, you’re much more effectively able to map the purchased service to reimbursements.
In fact, to remain profitable in the long-term, this should really be a non-negotiable in your process.
Yes, it takes expert resources to be able to fully understand all of the moving parts, but let’s take this further and think about the next time you go to negotiate a price or contract.
If you don’t understand these many components, how can you effectively negotiate? How can you be sure that you’re not paying for something you don’t need? How can you ensure that savings aren’t hiding right under your nose?
Here’s the short answer: you can’t.
What’s your process to ensure you’re clear on your purchased services and that you map them to reimbursements when applicable?
The audio version of this entry is available at the bottom of this post.