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Making Cost Reduction a Win-Win! Really?

The basic core philosophy of healthcare reform is to reduce cost and improve quality. The emergence of Accountable Care Organizations (ACOs) and Bundled Payment regulations are two relevant examples of the external pressures healthcare organizations are navigating.


The pressures to cut cost are only going to increase. So why wait for the next external pressure points? Why not take more control of your own destiny now in a way that both your employees and Board will respect. Shouldn’t I just continue “tweaking” my revenue cycle and working on ways to increase cash and accelerate cash flow? Absolutely! No one will argue against getting more cash in and getting it in faster. But for many organizations, it’s time to look at the expense side of the coin and take action. And let’s admit it. Cost reduction is not fun!


So where is the win-win? It is at the front line of your organization where your employees and patients are engaging each day. Before you look up and find that you have to take urgent and perhaps drastic action on reducing costs, look inward and ask your directors, managers and front-line employees for help. Your people know where there is duplication, scheduling issues, rework, long wait times, inventory excess and other process flow issues that are causing excessive costs for your organization.  


This approach requires solid sponsorship from the leaders of organization and the call to a “no penalty” doctrine. Here is an example:

  • The leadership of a 75 bed hospital knew they must reduce costs. Their hope was to find a way to meet their goals without affecting FTEs. Leadership enlisted the help of Blue & Co. to guide the process. At a “town hall” meeting, leadership described the landscape, the challenge and the approach. They were clear that there was a definitive number to be reached and wanted to give the employees the opportunity to contribute in a way to meet the goal and maintain or improve patient care. Leadership asked for open and honest information and recommendations in the spirit of “no penalty.”

  • The nursing staff described a recurring issue in which the hospitalist would write discharge orders for patients in the morning but the patients often were not actually discharged until after the next shift. This state had a strict nurse to patient ratio and these “to be discharged” patients often caused the need for an additional contract nurse. Nursing, discharge planners, and other relevant parties came together to redesign a process for more timely discharge. The contract nursing costs were reduced by $225,000 per year.

This is a win-win. The hospital wins by engaging its own employees to contribute to cost reduction. The patients wins by experiencing a more timely discharge. So what’s the first step? Where do you start? That’s where we come in. Blue & Co. has experienced professionals who can guide you through this process.

 

Want more information about how to get started? Please contact John Britt at jdbritt@blueandco.com or 502-992-2598.