5 Cost Reduction Priorities for CEOs
Reducing Cost Variations
Several CEOs noted that identifying and rectifying variations in costs among clinicians treating similar patient populations is also important to reducing the overall cost of the care their organizations are delivering.
"One of the things that we've done is take a look at all of our hospitals and look at variation around certain DRG clusters," says Steve Newton, west region president at Baylor Scott & White Health in Grapevine, TX.
Like West Virginia United, Baylor Scott & White is using its best performers to set the standards for other clinicians, Newton says, noting that the system's administration will work with low performers on finding ways to improve.
"Literally, we are rolling out an expectation that all of our hospital leadership teams are going to set up a group to look at the analytics and to find exactly where the low performers are and what the levers are," Newton says. "I personally feel like this is one of the biggest untapped reservoirs in terms of cost reduction opportunities."
Preparing for New Reimbursement Structures
The CEOs at the Exchange all agree that one of the largest challenges for their organizations is the looming transition from a fee-for-service payment structure to one based on value. While the senior leaders acknowledge that they are moving toward a capitated reimbursement environment, they say it is difficult to know how quickly to make changes when they are still mainly being paid on a fee-for-service basis.
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