4 Steps to Fast Track Hospital Savings In 2024 and Beyond

4 Steps to Fast Track Hospital Savings In 2024 and Beyond

“Below are a few strategies which my firm, SVAH Solutions, has been utilizing to identify hospital savings for our clients.”

Many health systems throughout the country are feeling the financial pinch due to inflation, reduced reimbursements, and the increased contract labor costs. Organizations are dealing with this in several manners with things like budget cutbacks, hiring freezes, and even layoffs. But organizations cannot sustain operations on these one-time events year after year and will need to look for sustainable solutions to further optimize costs at every level without affecting quality of care.

There is Still a Huge Upside on Hospital Savings with the Right Strategies

The good news is that there are still more savings to be had at healthcare organizations, but we are going to need to drill a little deeper into our non-salary expenses in order to identify and weed out unfavorable cost drivers. This is easier said than done, but not impossible. Below are a few strategies which my firm, SVAH Solutions, has been utilizing to identify savings for our clients.

  1. Consumption Management Reporting – My staff utilizes year over year reporting that is aligned with patient volume metrics to report out all of the categories that are running over in descending dollar from the previous year. Believe me, this and this alone will bare multitudes of savings opportunities that will keep you busy with major savings for the next two years—guaranteed. Many people who are price-focused think that all you need to do is get the right pricing and terms, but today it is all about how much you consume on the nursing floors, in the OR, lab, ED, etc. The savings are there, but you have to have some form of reporting other than spend reports to make them visible to you.
  2. Retrospective Value Analysis Reviews – It does not matter if you are a large health system or one community hospital – if you drill down into any major cost category to look for lower cost alternatives or where there is waste and inefficient use, you will find it. Make a little room on your value analysis agendas for these types of VA studies and you will find big savings just about every time.
  3. Develop Trigger Points When New Contracts Come Up – Every time you are renewing a contract with a major vendor, take a deep dive into your utilization and consumption of products and weed out high-cost products wherever possible. Most organizations never delve further than the new pricing as compared to the previous contract, but if you take a step further and work with your VA team you can find some great savings.
  4. Attacking Each Savings Opportunity with the Right Strategy is Key – Just because you find a nice juicy savings opportunity does not automatically mean that you are going to achieve the savings. You need to find just the right avenue that will give you the full savings amount or more. You may think that if you find out that you’re using a Rolls Royce IV catheter that you could simply have your contract manager work with your nursing team to pick a lower cost catheter, but think again. I would recommend that you turn this over to your clinical value analysis team because they will use their value analysis functional approach to work with the various nurse stakeholders in order to find the lower cost, best value IV catheter.

A simple rule is that if something is house-wide or clinical in nature, all will be better served with a full-blown value analysis study being performed to find the lowest cost, functionally equivalent alternative that meets the clinical requirements reliably.

You Can Stay in Your Lane or You Can Join In on the Hospital Savings Success

When things happen like cost cutbacks at healthcare organizations, it is easy to just stay in our lanes and do what we are asked to do and not stick our necks out to try to make things like cost management happen. Senior leadership often will jump in when there is a financial pinch but that may just result in outside consultants being brought in and inevitably affecting your department and work areas. I highly recommend that you actively step up your own savings game with the above valuable strategies that can help your organization reap major savings not only this year but for years to come.

About Robert W. Yokl, Sr. VP of Value Analysis & Supply Chain Solutions
Robert is the Program Leader for SVAH Solutions that provides value analysis, clinical supply utilization, and savings validation tools to help organizations to gain the next level of savings beyond price and standardization.

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