Cost Containment Under Healthcare Rules
Qualify for a free subscription to HealthLeaders magazine.
Maybe healthcare gets a bad rap in cost containment. Although it’s relatively new to the sector, most organizations are paying attention to it—to what level is debatable. Yet they do report significant results, although those results are incremental. Some 70% of respondents said their average annual savings over the past three years in cost reduction programs have ranged between 1% and 5%, while 29% of respondents reported even bigger gains.
The programs run the gamut. Yes, some do involve easy (and perhaps shortsighted) efforts that involve cutting staffing and other labor costs, but others are innovative, and take advantage of the largely untapped scale of many hospitals and systems and their formal relationships to each other. For example, with its GPO, Regional Health recently developed the Northern Plains Premier Collaborative, a purchasing partnership with a geographically close partner that pools purchasing power over 40–50 hospitals, Hart says.
“We began to put value analysis teams together to work on group purchase items, and it has been very successful over the past three years,” he says.
From the simple to the complex, the collaborative standardized gloves throughout all the hospitals, which saved Regional Health about $250,000 over the time period. “Where we see the biggest change is in capital purchases where we will spend about $110 million among the organizations next year,” he says. “You save 2%, 3%, 4%, which is a significant amount of money. Another example is we bought CT and MRI scanners together and we saved $30,000 per machine.”
- Interventional Radiology No Longer a Sub-Specialty
- NFP Hospitals' Revenue Growth at 'All-Time Low'
- Acute Kidney Injury Gets New Focus
- Transforming Cancer Care
- Half of All Primary Care, Internal Medicine Jobs Unfilled in 2013
- Evidence-Based Practice and Nursing Research: Avoiding Confusion
- mHealth Tackles Readmissions
- CNO Leads $1M Charge for New Scrubs, Uniforms
- Sharp HealthCare Leaves Pioneer ACO Program
- MA an Insurance Proving Ground for Providers