FRISCO, TXandNASHVILLE, TN,September 16, 2018 (BUSINESS WIRE) --Valify, the leading healthcare cost management company exclusively dedicated to controlling purchased services expense, today announced that it has acquired Lucro Solutions, Inc., a Nashville-based digital platform for health systems to compare and select vendors.
When providers think of purchased services, their minds typically go to facility support, IT, and ancillary services. However, this scope is too limited and doesn’t encompass the full breadth of what falls under the definition of purchased services. The fact is, there are over 250 clinical services that are categorized as a purchased service including pharmacy compounding services, dialysis services, imaging services, and neurology services.
Key takeaways from recent webinar on Dialysis coming soon!
A large percentage of a hospitals overall cost structure is comprised of staffing and related payroll. Yet, the outsourced staffing industry does not maintain adequate transparency when it comes to managing costs to the end users, making price assessments difficult for health systems.
Below we've compiled the key takeaways from our recent educational webinar in which we provide information for health systems to more easily assess pricing and best practices when evaluating Staffing and Locum Tenens vendors. Read the synopsis below.
Click hereto request the full webinar recording.
Dialysis is a necessary procedure that allows nearly 500,000 patients in the United States with kidney failure the opportunity to live normal, productive lives. The treatment removes waste, salt, and extra water when the native kidneys are no longer able. Though there are several types of dialysis, the most common is Hemodialysis, in which blood is removed from the body, run through a dialyzer, cleaned, and replaced into the body. Dialysis takes three hours to complete and is offered by health systems as inpatient and outpatient treatments.
Healthcare spending in the United States is the stuff of legenda massive expenditure that only grows bigger each and every year. According to the National Health Expenditure Accounts (NHEA), U.S. healthcare spending rose 4.3% in 2016 to $3.3 trillion or $10,348 per person. These figures represent a 17.9% share of Gross Domestic Product. While this money does go to securing some truly great healthcare, there is also much waste hidden in these annual numbers. A report by the National Academy of Medicine estimates that the nations healthcare system wastes $765 billion annually, with $210 billion spent on unnecessary or overpriced care. One way health system leaders can drive leaner operations and reduce wasteful spending is through the use of purchase orders (POs).
If you’re responsible for leading a healthcare system, you already know that numerous vendors are required to ensure operations run smoothly. There are the various medical device suppliers physicians depend on for treating patients, janitorial services that keep facilities clean, landscapers that maintain an immaculate exterior, cafeteria services that make sure people are fed, and many other contractors who contribute to a functioning hospital.
In todays evolving and uncertain healthcare landscape, hospital administrators are continually searching for ways to reduce costs and meet annual savings goals. Purchased services categories remain a significant budget area full of opportunity for reducing expenses. Dollars spent on services performed by outside suppliers account for up to 45% of a providers non-labor budget. Proactive management of service categories will uncover that providers unnecessarily pay for duplicative services, incur hidden fees and penalties, and wrestle with rogue spending with non-contracted suppliers.
Managing purchased services is no easy task. Utilizing an average of 1,505 suppliers to perform services spanning an average of 383 categories, requires diligent oversight and management. Even the most seasoned purchased services professional is challenged in mastering the nuances with each service category while simultaneously managing the strategic sourcing process for the constant churn of contracts. Still, veterans in this space have invested years of dedication, acute attention to detail, and have even experienced trial and error spanning a variety of service categories. Collectively, experts across healthcare have accumulated knowledge and experience related to category-specific best practices.
To ensure there’s no disruption to patient care or billable services, covering open, or even absent, healthcare positions is critical. According to Select International, a position vacancy for one physician can translate to an annual loss of $250,000 to $1.4 million. Cost efficient staffing strategies must be in place to keep services and revenue flowing. In our previous post, we discussed the opportunities for cost-containment in staffing. This post, however, will focus on a specific part of staffing--locum tenens.
A report by Kaufman, Hall & Associates revealed that the number of hospital mergers and acquisitions increased 55%, from 66 announced in 2010, to 102 in 2016. Last year also saw a flurry of mergers nationwide, from Kansas to New Jersey, with healthcare systems around the country consolidating in order to maintain their financial viability in an era of legislative uncertainty and marketplace volatility. Both independent and newly acquired hospitals are actively seeking areas for cost-containment to strengthen their bottom lines. One way to do this is by taking a scalpel to purchased services. Here we’ll discuss specifically the category of staffing.
Purchased services represents up to 45% of the non-labor expense budget within a health system. As more executives look to purchased services categories for potential expense reduction, 2018 is an important year, and Valify has several important innovations planned to assist clients in controlling and reducing purchased services expense in the year ahead: