Achieve Cost Optimization While Preserving Quality
Many believe they’ve already capitalized on all the strategic advantages available in today’s mature healthcare supply chain environment. However, if there was a way to gain a strategic advantage without disrupting the vital balance that you have built to date with your GPO and custom contracting, then it may be worth exploring further. The ultimate goal is to once and for all wring the towel dry of all savings that may have been overlooked or hiding from your current view. Achieving optimal cost ratios is crucial, but doing so while preserving quality, reliability, and product availability is the ideal outcome we all aim for.
It’s All a Moving Target
In our healthcare organizations, contract prices, consumption patterns, product functionality and features, policies, and vendors are constantly changing — making it challenging to pin down cost ratios, which often feel like a moving target. Strategically speaking, to optimize costs and maintain that optimization over the short and long term you must keep your costs in every product and service category in the sweet spot benchmark range. This can be quite a strategic challenge for just one category, let alone the over 750 major and 1,000 minor categories you purchase on an annual basis. However, this is very attainable and harnessing this type of strategic advantage will serve you well whether you are dealing with new products, new or existing contracts, solving problems, or cost optimizing an entire category.
You Need to Know Where You Stand in All Product Categories at all Times
We provide supply chain and value analysis teams with insights into the categories where they excel and lead the field within their health systems, based on comparisons to cohort benchmarks. Why is this important? Most organizations have no idea where they stand with any given category, though they all have gut feel and rely solely on spend levels, but spending is not always an indicator of where you stand. By having a patient volume centric measure matched up to your supply categories you will know exactly where you stand year over year, system-wide, and within your cohort best practice. So much effort is wasted on trying to attain $550 here and $780 there on standardization projects when in reality you are running as your cohort best practice and 28% better than cohort average.
Knowing Where You Stand in Overall Cost Per Metric
By knowing where you stand in each contract category in terms of overall cost per operating metric, you can then strategically deploy your valuable time and resources where you need to most.
Why focus on sutures or endomechanicals where you are close to best in cohort when your PICC costs are 40% over cohort average?
Do you allow a new Cardiology EP Lab Mapping product into the organization when the EP Mapping Category is running over by 43% year over year and 35% over the cohort benchmark average?
Why are you forcing nursing units to reprocess pulse oxisensors when they are already at the lowest cost per adjusted patient day in your cohort benchmark group?
Should your Contract Administrator push for further savings using your vendor’s clinical analysis team when you find out your cost per surgical case is running $40 higher than your cohort average and $65 higher than your cohort best practice in electrosurgical products?
Cost Optimization Possibilities are Endless with the Right Benchmarking System in Place
The possibilities are endless when you know where you stand across all purchasing categories, including identifying top candidates for cost optimization and recognizing areas that don’t require attention. Having this kind of information at your fingertips provides powerful insights you can leverage every day.
| About Robert W. Yokl, President of SVAH Solutions |
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| Robert is the President of SVAH Solutions which provides value analysis, clinical supply utilization, and savings validation tools to help healthcare organizations gain the next level of savings beyond price and standardization. https://www.SVAH-Solutions.com https://www.SavingsValidation.com |
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