Exploring Pipeline for Margin Improvement
In these audiograms, taken from Episode 20 of The Healthcare Leadership Experience, Lisa Miller is joined by her producer, Lisa Larter, and Rich Dormer and Bryan Covert from the VIE Healthcare team. Together they discuss planning your health system’s pipeline of cost savings opportunities for 2022.
Have a Pipeline of Cost Savings Opportunities Versus Having a Strategy
When we take a deep dive into cost savings, we risk missing out on higher potential target if we set a goal of 10-15% in cost savings. Are you just setting for the norm or pushing for cost optimization? Are you working on the same initiatives every four years or analyzing the line item details on every implant case, even for your specialty vendors?
Don’t miss out on the savings in your purchased services spend
Support services, such as administration, IT and HR, are traditionally managed and negotiated in silos. At VIE, we take a deep dive into those areas to find the hidden cost saving opportunities. Our focus is on strategic pipelines, capturing invoicing errors and off-contract pricing and negotiating the best pricing and services.
There are three parts to every cost savings pipeline
First, organizing your data starts with AP spend, PO details and your agreements, both new and mid-term. You can’t build a pipeline around agreements due to expire in the next twelve months. The second part is specificity. Third, urgent issues will arise during the contract period, from service issues to cost spikes, and you must prioritize them. VIE Healthcare was one of the first companies in the US to help hospitals benchmark for competitive Covid testing.
Create a strategic plan for your cost savings pipeline
Plan in advance to do this work annually and review semi-annually. Now is the time hospitals need third party expertise and specialization in cost reduction. Inflation is already here. In my opinion, a focus on costs has to be the #1 priority for hospitals as we go into 2022. Multiple cost savings opportunities are available, but hospitals need a planned, systematic approach.