Visualizing purchased services spending is essential for controlling costs at any hospital or health system. After all, purchased services comprise 45 percent of a hospitals non-labor budget. The ability to drill down on spending across a well-organized hierarchy of more than 1,200 potential purchased services categories provides an even more precise picture of how dollars are being spent. Spending data alone, however, offers only directional insights.
As hospital executives focus on surviving major industry changes such as new payment models and shrinking reimbursements, the cost reduction spotlight seems to be focused more on M&A activity and labor reductions rather than purchased services. This is despite the potential to achieve significant savings without disrupting patient care.
Over the last 10-15 years, Value Analysis teams have successfully implemented cost savings initiatives for commodities, physician preference items, and even pharmaceuticals. However, an area that is often overlooked by Value Analysis committees is Purchased Services.
In the healthcare world, group purchasing organizations (GPOs) have established their place for streamlining vendor selection and cost savings on products. However, these organizations do have their limits and cant be relied on for every single aspect of your hospitals spend management and cost control.
Most of the topics I have written about on this blog have been about how to save hospitals money, but in reality, the real goal is to increase their overall performance. So instead of listing out another purchased services area to help save your bottom line, today we will discuss an interesting way to increase top line revenue within your hospital by showing you the marketing value of the crowds of people walking through your organization every day.
Many times, data analysts and contract negotiators find themselves neck deep in what seems to be garbage or uncategorizable data. This leads to wasted time and increased frustration that could be better spent finding savings opportunities instead of data scrubbing.
While patient health is of primary concern, hospital management can't overlook the essential business side of running a hospital, which needs every incoming dollar to survive. In 2012 alone, U.S. hospitals provided $45.9 billion in uncompensated care, only 25 percent of which resulted from uninsured patients. Whats more, the average collections recovery rate for hospitals in 2013 was a mere 15.3 percent, according to ACA International.
Medical malpractice is a phrase that makes doctors across the nation blanch. Whether from claims that are justified or frivolous, our society is all too happy to pull the trigger on initiating litigation against health care providers who we feel havent done their job correctly.
Investment in capital equipment is a decision that shouldnt be made lightly, particularly for health care organizations. There are many factors to consider when selecting equipment that best suits your needs, with the bottom line being the consideration of total lifetime costs associated with its use. Other factors may include:
Some businessesthink Wal-Mart or Amazon in the retail worldbuy a lot of stuff. Their high-volume buying enables them to extract better deals from their vendors, the kind of deals that smaller businesses simply dont have the clout to command.