Savings Validation Why Validation of Your Savings is Now Mission Critical for All Healthcare Organizations Robert T. Yokl, President/CEO, SVAH Solutions
The Healthcare Financial Management Association tells us that that your free-standing hospital, multi-hospital system, or IDN’s payment systems are evolving from fee-for-performance to value-based purchasing, readmission restrictions, and bundled payments. This prediction should also mean a paradigm shift for your supply chain expense management strategies, tactics and techniques. State of Supply Chain Expense Management To understand the reason there is a need for change in how a healthcare supply chain department assesses, measures, and monitors the financial results of their GPO and custom contracts, you need to understand the state of supply chain contract expenses savings reporting today. Our studies show that 100% of the savings from these contracts are reported to senior management, but less than 28% are ever verified. Thus, we have discovered that as much as 64% is lost due to not monitoring, tracking, or verifying these savings. Luckily, 36% of this reported savings does hit the mark as not all savings goes off track but it is hard to tell this if you are not continually auditing your savings. Just imagine if 100% of the savings that were reported were actually saved. We estimate that 64% more savings would hit your healthcare organization’s bottom line. Isn’t that what we are all striving for - bigger and more sustainable savings yields? Volume 7/Issue 1
Healthcare Value Analysis & Utilization Management Magazine
28
