“Savings automation will take your organization to the next level.”
Chasing savings can be frustrating and time consuming, especially if you don’t have some sort of system to find savings now. All this while we are being asked to save even more due to inflation and market conditions. There are always group purchasing contracts, which are bringing good value, but we still need more savings than those contracts can give us due to the maturity of group purchasing contracts and inflationary market conditions. You can eke out savings in addition to the savings from your GPO contracts. I am talking about new and different areas in which you probably have no idea how much savings there really is, which means there may be a lot of diamonds in your back yard that you just don’t know about yet.
There is No AI for Cost Savings (Yet) but There is Automation
I was talking with a friend of mine who is a big time IT Executive in a similar healthcare environment and the topic of AI came up. He laughed at me and said that nothing has changed and we are still working with the same databases, programming languages, and algorithms as we always have. They have just gotten much better, faster, and are better instructed to do things for us. He attributed the AI buzz to marketing, and said that it is best to pay attention to what database solutions can do for you in an automated fashion as these are still very powerful tools.
The Savings Game Has Changed – Savings Need to Come to You
Create and Maintain Your Own Benchmark/KPI Reporting – Every healthcare organization should have benchmarks on all of their major and minor categories of purchase. I suggest that you start with a top 50 (there are over 750 to benchmark) and then start to track them by procedure, patient day, lab test, etc. All you will need to do is have the benchmark/KPI reporting updated every month and/or quarter and it will instantly tell you where you have savings opportunities. Plus, it will tell you areas that you are doing better in.
If you and some of your peers want to compare benchmarks, then this will be the best format to do so. Your own internal benchmarks may be good but what I have found is that you only know what you know. Your health system will be really good in some areas and not so good in others compared to other health systems you work with. Everyone will win and you will find big hidden savings!
Give Savings Validation a Try – There are so many changes from new product requests to contract conversions to recalls that are going on at any given health system. But who tracks the end results of what is really supposed to happen? 96% of the time no one does, which means it’s time to set up your own Savings Validation Remember, all of your transactional data like POs are available to you, you just need a database that you can tag these items on (you will only need to have little IT support with this) and set pre-configured date ranges to. Then, you can compare what you projected savings to be against what really happened with your PO spend data. Reach out to me if you want to know a fast way for this to happen.
A Long Term & Sustainable System – At SVAH, we don’t chase after savings for any client. We never have and never will. Why? Because we use our clinical supply utilization software to have the savings come to us in the form of year over year comparisons, cohort best practices, custom benchmarks, etc. We focus on the first 50 line items of this report when we work with health systems every week because no matter how good you are, something is going to change that is going to drive costs up in any particular category. We just let the software tell us where to look. One client is running over in midline catheters by 42%, while another is running over by 62% with pulse oxisensors. It is different for every hospital and health system, but the methodology passes the proof test.
Knowing Where to Find Savings Is the Name of the Game
I have been in the savings game now for over 30 years and I am grateful that we developed the software automation for SVAH to help our clients find out where their savings opportunities are. Most importantly, the faster one knows where your savings are, the faster you can do something about it. Not knowing means it’s just chewing away at your bottom line and that is never good for health systems today. We all know how to save money, but do we really have the time to go chasing after everything that we should? Probably not. Let automation take you to the next level of major savings!
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