Eye on Efficiency

John Commins, November 17, 2014

This article first appeared in the December 2014 issue of HealthLeaders magazine.

HealthLeaders Media Council members discuss some of the most effective cost-reduction efforts that their organizations have implemented.

Nate Blackford
Chief Operating Officer
Northwest Medical Center
Albany, MS

Nate Blackford
Nate Blackford

The first and probably the most impactful cost reduction program has been to right-size and renegotiate many of our contracts with various vendors. That improves our purchasing power. We've negotiated contracts with our pharmaceutical distribution companies and we have also initiated a 340B drug pricing program that has had a positive impact from an expense and a revenue perspective.

About 65% to 70% of our total operating expenses are on the personnel side. We've taken a comprehensive view of our people plan and tried to make adjustments where appropriate, and it's definitely my job to get staff to buy into it. We've been transparent and open and honest. We've let them see our financials and our patient statistics, and asked them to be part of the solution. That's how we've chosen to engage them, and it's gotten them to buy into the process because they have contributed to the solution.

We are not unlike other small independent critical access hospitals. We are looking for ways to strategically partner with other organizations to improve efficiencies, effectiveness, and ultimately reduce costs and improve quality.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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