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How One Provider is Saving Millions on Imaging Equipment

Rene Letourneau, for HealthLeaders Media, December 16, 2013

By adopting a data-driven strategy to determine its equipment needs, Milwaukee-based Aurora Health Care has reduced capital spending on CT scanners by 9%, nuclear medicine by 25%, mammography by 3%, and X-ray by 10% since early 2012.

As provider organizations prepare for the financial realities they will face in 2014—weakening reimbursements, declining inpatient volumes, mounting pressure to make substantial IT investments, just to name a few—many are digging deep to find new ways to reduce costs and increase efficiencies.

Milwaukee-based Aurora Health Care is no exception. With 15 hospitals, 1,500 employed physicians, 159 clinics, 70 retail pharmacies, and a large homecare service, Aurora needs system-wide strategies to unearth meaningful, sustainable savings beyond the usual cost-cutting measures, says Brad Hahn, the system's executive vice president of finance.

"We were pushing a lot of traditional levers like supply chain and labor, but we needed to look for more areas for transformation within the system," Hahn says.

When Aurora executives turned their attention to diagnostic imaging equipment during a brainstorming session on cost-reduction opportunities, the idea struck a chord with Hahn.

"It's one of our largest spends every year in terms of capital dollars… but I didn't have a good feeling that all of that spend was being utilized in the most efficient manner," he says.

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