What is driving up costs for hospitals?

In this video, Lisa Miller, CEO and Founder of VIE Healthcare, discusses the main buckets that are driving up costs for hospitals.

Enhancements in healthcare are significantly driving up costs in hospitals.

In most cases, we find that enhancements don’t increase revenues.

When hospitals ask us to carry out a cost analysis, we are seeing significant increases in clinical or Physician Preference Items (PPIs).

This is a growing problem for cost management in healthcare.

In many cases, the enhancements are not significant advancements.

What they are is a big driver of costs.

At VIE Healthcare®, we refer to them as ‘’marketing enhancements.’’

While the enhancement may be negligible, the cost increase per item is often in the region of 25-30%.

We evaluate the enhancement using analytics based on four criteria:

  • What did this item cost before the enhancement?
  • What is the new price?
  • Is the enhancement increasing reimbursements?
  • What is the overall cost impact of this enhancement?

Our insights are presented to clinicians and administrators in a meaningful way to help them to push back on cost drivers in healthcare.

In our experience, there are two cost effective solutions to this growing problem:

  • Renegotiating the price of the enhancement.
  • Discarding it when the benefit is only slight.

PPIs comprise up to 60% of a hospital’s total supply costs.

PPIs can have a negative impact on your hospital’s operating margins.

VIE Healthcare® provides best practices in PPI cost management to find potential cost savings.

This strategy includes ongoing data analysis to obtain true financial metrics.

Providing cost data to physicians can result in significant savings without compromising patient care.

VIE Healthcare’s innovative “Physician Cost Awareness Program” provides a unique solution to this challenge.

Enhancements in PPIs are not the only buckets driving up costs in healthcare.

Other areas which offer potential cost savings include new technologies, such as telemedicine and IT services, utilization and variation, pricing and contracting.

Reach out at [email protected] to discuss your cost savings goals and how we can support and accelerate cost savings opportunities in your organization.

Share: What is driving up costs for hospitals?

Share on facebook
Share on twitter
Share on linkedin
Share on email


Discover 15 Effective Cost Savings Strategies That Most Hospitals Can Apply Right Now

Learn how these five principles can help you reduce costs immediately.

A strategy developed from analyzing over 5,000 hospitals

A simple step-by-step plan in plain language

Proven processes to organize and motivate your team to find savings

We protect your information