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HealthLeaders Media Live from Heartland Health in St. Joseph, MO: Uncovering Cost Savings

Jim Molpus, for HealthLeaders Media, February 13, 2013
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Committees are not always the tool of choice for seeking efficiency. Done improperly, committees can turn into debating societies where decisions are watered down or put off. Heartland made certain the group would be active and decisive, Smith says, The committee of 12 is made up of a cross-section of clinical and nonclinical leadership and management, including representatives from cost accounting, performance improvement, market research, occupational medicine, technology, accounting, staffing and supply chain, as well as clinical leaders from both the hospital and Heartland Clinic.

Even though the committee is a cross-section, there is a singular quality they all share, Smith says. "When we decided who should serve, we were looking for people that did not just say yes. We went looking for the inquisitive type who would ask why, and help us to understand 'Why do we want to buy this?' or 'Why should we outsource this?' "

The committee meets weekly and has authority to approve any item on its own that does not add to the bottom line, and is already budgeted under $150,000. Higher dollar contracts recommended by Con$erv are sent to executive leadership for approval. The type of contracts reviewed can range from consulting to copiers, or software license renewals to cleaning contracts. Practice acquisitions or other strategic purchases are still handled at the officer level, she says. 

The process has worked by "identifying overlap, including reopening certain agreements and sending out RFPs on existing agreements," Smith says. The committee tries to ensure that contracts stay on schedule but Smith says the work does add a level of delay. "But sometimes that's a good idea because sometimes when you rush contracts you miss things," Smith says. "Having this level of scrutiny is good for both the organization and the requestor and ensures good stewardship of Heartland's dollar. However, it does take some time to be thorough." Questions, she says, are often directed back to the vendors. The new committee has definitely changed the level of dialogue with the health system's contract vendors, she says.

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