Everyone likes it when they just made big savings happen with a better price, standardization of vendors, value analysis project, or consumption reduction. There is nothing better than putting up a big number on your savings report and the feeling of accomplishment. Then we move on to the next project, contract, or value analysis initiative to gain the next level of savings. But what really happens with those past savings initiatives that are sitting on static spreadsheets that you reported on? Did they really materialize to the exact savings you projected? What if it went sideways and the costs increased dramatically? What if we saved more and are not getting credit for the increased savings?
How Do We Really Know if the Savings We Put in Place Actually Materialize?
If you are tracking your savings on a static spreadsheet with numbers that are keyed in manually from savings projections, you really don’t know what is going to happen after the implementation. In a perfect world, you would think that they would hold true but given that health systems vary based on patient volumes in all clinical areas, it is tough to project anything perfectly.
Why is Savings Validation Even More Important than Before?
Health systems are always in a cost crunch and that is no different today. It is important that we get the savings numbers right because our bottom lines depend on these numbers being accurate and reported out with certainty. You can’t really do that with a static spreadsheet without painstakingly recalculating every line item on that sheet every single month which is time and resource prohibitive. So, what’s the answer?
Switch from Static Savings Reports to Savings Validation
Health systems are subject to the ebb and flow of their patient volumes and so are your savings projections. To tie into the ebb and flow of your savings reporting you need to connect it to a savings validation reporting system to capture all the exact changes taking place on an ongoing basis. The vision is simple, products and categories can now be tracked based on cost per patient volume on an ongoing basis which will give the exact change, positive or negative, in your savings opportunity.
Did You Know that Savings Validation Can Unearth More Savings than You Are Reporting Now?
In most cases, health systems have thousands or even millions of dollars that they are saving but they have no idea this is happening because they don’t have any type of patient volume centric savings validation reporting. Imagine you have an additional $1.5 million that was saved but it did not reach any savings report because no one was tracking it. This is happening right now in your health system, but you have no idea because you are not tracking it with savings validation.
Savings Validation is Required Reporting for Current and Future Success
The bottom line is that savings validation is the key to taking your savings tracking to a whole new level. Yes, there may be a little bit of re-work here and there with things going sideways, but it is better to know that a $330K savings went sideways than to let your CFO think you saved $330K and it didn’t happen. It just makes sense to up your health system’s supply tracking by adding this advanced element to all savings you are tracking or want to track. Let savings validation make your health system’s savings tracking easier and more accurate for everyone involved.
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