Doing Business With the Right Firm
Would it surprise you to know that most consulting firms offering purchased services expense reduction have only been providing this offering within the past few years?
If you’re considering bringing on a consulting firm to help you with your purchased services expense reduction, there are some questions you should ask.
The first question is, how many of these types of contracts have they analyzed? The second is, will they give you a sample of your choice to perform at no charge so that you can see an example of their work? The third, who are the analysts that will be working on your project and will you get a complete bio, which includes their experience and the results that they have achieved? And finally, I realize this is a sensitive one, are the consultants receiving any kind of compensation for the recommendations they’re making from the vendors? And that could be commissions or admin fees if they’re a GPO. It’s important to get clear on these elements.
Let’s segue quickly to some of the powerful results our firm has been able to achieve in purchased services.
Outsourced rehab: 14%-18% reduction.
Outsourced dialysis: 16%-23% reduction.
Patient satisfaction surveys: 6%-12% reduction.
Speciality lab testing: 7%-14% reduction.
Software maintenance contracts/software license renewals: 10%-15% reduction.
Pharmacy Compounding: 5%-8% reduction.
Document storage solutions: 14%-19% reduction.
And, there’s nothing better to substantiate the percentage examples above for what our clients achieve than a mini case study in two areas. One is sleep care. For some additional context to this, we had an IDN client with 1,032 beds that asked us to look at their outsourced sleep management agreement. We reviewed this pending renewal proposal from a regional sleep lab vendor. We were able to benchmark and provide best in class pricing, but we also performed an extensive retrospective review of the invoices versus the contract, which revealed enormous opportunities and some mistakes that we were able to identify. Ultimately, we reduced our client’s costs by 14.2% and we secured a credit of over $90,000.
A second case example is merchant cards. We have a current client with 450+ beds. We were asked to look at their merchant card rates. They had a $24 million annual spend, and we assisted them in reducing this cost by 32%, and also securing a one-time credit of $30,000 from errors that we picked up performing a retrospective analysis.
The key distinction is that there are differences between consulting firms.
So, make the right choice!
What is one area that you’d like to review to reduce costs and spending?