Legal 101 Savings Sustainable
Robert T. Yokl Robert T. Yokl
Purchased Services the Right Way: Sustainable Targeted Cost Savings Robert T. Yokl, President, SVAH Solutions
I can’t count the number of times a supply chain manager, director, or even vice president has told us that his or her goal is to save three, five, or even ten million dollars in purchased service savings as a one-time event. However, as HealthLeaders Media so wisely said, “Onetime slashes are not a long-term solution, you need smart, sustainable plans for spending less” to be successful in the long-term.
Smart - Sustainable - Strategic - Savings One reason this one-time slashing approach to cost cutting doesn’t work over the long-term is that you think you have cut your purchased service costs permanently, but these same costs creep back in about a year or two (if not sooner). How do we know this to be a fact? We have frequently seen hospitals, systems, and IDNs hire consultants or form teams to cut their costs in specific categories of purchased services (e.g., telecommunications, food services, laundry services, etc.) only to see these same costs sneak back into their healthcare organization’s cost centers over time because no monitoring systems were put into place to prevent this from happening.
Volume 1/Issue 1
Healthcare Purchased Services Magazine
20
