Why Utilization Management is More Important than Ever Before!

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An Important and Timely Message from Robert T. Yokl

Utilizer2010aWhen I look at the Affordable Care Act’s new Value-Based Purchasing (VBP) Prospective Payment System that was implemented in October of 2012, I get the feeling that we in healthcare are rowing our boat in the wrong direction. This is because over a five-year period your reimbursement to fund this new VBP payment system, which includes a minuscule award of 1% for complying with 62 new quality measures, will be reduced about 7.25%

In addition, Medicare will reduce its DRG payments if your hospital readmission rate is 30 days or less for your patients with heart attacks, heart failure, and pneumonia if they exceed a preset threshold.  By 2015, hospitals that don’t meet the government’s IT “meaningful use” criteria in delivering their patient care will face further reductions in their reimbursement. Top this off with a new mandate in 2015, which says that hospitals with high rates of selected hospital-acquired conditions will receive further payment reductions. If this wasn’t an actual fact, I would think it was fiction! 

What this means to your healthcare organization is that you will need to save even more money in your supply streams to offset these deep cuts, since NEW PRICE SAVINGS ARE A THING OF THE PAST. No longer can you count on price to put you into the next savings tier.

Rather, the way of the future is utilization management, which can help you cut your supply chain expenses and find thousands, even millions, in hidden savings.

The good news is that you have five years to do so. I would plan to target about 1.5% in utilization savings per year, starting now, so you can get ahead of the curve. To save less per year, as I see it, would be a real struggle to catch up at a later date.

Plan now to save more, so you have less pain later. This way, you can make your job somewhat easier, even though you have a big mountain to climb.

And if you REALLY want to make your utilization job much easier, call us at 1-800-220-4274 and visit our website to see for yourself how our new Utilizer® Dashboard (all-in-one utilization management system) can help you reach new savings heights. We guarantee it within 90-days!

“The prices of products, services and technology may be important, but reducing the utilization of supplies will have a much greater positive financial impact on a hospital’s bottom line.” Anonymous

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