Healthcare Leaders Look to Manage Costs and Reduce Variation

Our healthcare industry finds itself in a period of uncertainty. No one knows what the future of payment/insurance reform will be. Regardless of where things land, a new survey of health system leaders conducted by Premier Inc. found that managing costs is their top priority.

Coverage of the survey in Healthcare Finance noted that C-suite executives are focused on improving productivity and reducing supply chain inefficiencies, pharmaceutical costs and clinical variation.

Another priority in the C-suite, according to the survey, is moving from meaningful use to meaningful insight. Systems are looking beyond recording data and are increasingly integrating and combining data to streamline analytics on supply chain, financial and clinical care.

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How to Move from a Holding Company to an Operating Company

It’s the key for health systems to achieve economies of scale

Recently, I had the distinct pleasure of participating in a panel at Becker’s Hospital Review 8th Annual Meeting with Khosrow Shotorbani, president and CEO of TriCore Reference Laboratories, Bill Santulli, EVP and COO of Advocate Health Care and Mark Dixon, president of The Mark Dixon Group and former regional president of Fairview Health Service. We spoke about the nationwide trend of health systems moving from a holding company model to an operating company model and all agreed that this trend will continue to accelerate.

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Millennials and the Multi-Generational Workforce

Millennials (those born between the early 80s and early 2000s) are now the largest living generation in the United States. According to Pew Research, in 2016 there were 75.4 million Millennials in the U.S.

And that means Millennials are becoming a larger and larger percentage of our workforce.

A recent post in Becker’s Hospital Review, discussed ways of engaging Millennials as part of a multi-generational workforce. The author, Michael Dowling points out that “it’s critical that we work extra hard to understand how the younger generations think, what motivates them, how they behave and how they prefer to communicate.” He goes on to warn that leaders who are not mindful of the work styles and ways to engage Millennials will have difficulty retaining this huge segment of the workforce.

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A Network of Providers Leverages Lean for Success

A recent Modern Healthcare article which discussed the benefits of Lean, noted that if one hospital is facing a problem with quality or safety, chances are pretty good that another probably has the same or similar problem. Makes sense, right?

A group of providers across the country came together and created a network called Catalyst to focus on how to fix problems using Lean management. Their focus was clinical: hospital-acquired infections. A primary objective was reducing the rate of central line-associated bloodstream infections (CLABSI). Unfortunately, the deadly complication still affects more than 30,000 patients a year with a 12% to 25% mortality rate, at a cost to the U.S. healthcare system of more than $1.8 billion since 2001.

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Focus on Healthcare Finances Will Only Get Greater

Margin pressures are not new to healthcare organizations. As hospitals and health systems wait in limbo as the healthcare reform debate continues, they will only increase. A recent Becker’s Hospital Review article highlights the need for health systems to continue to find ways to re-structure in order to find added value and remain viable: Activity-based costing, team commitment, understanding the drivers of work and embedding cost savings into operations.

It also lists 10 areas that the author recommends health systems target for maximum cost improvement: Manage the healthcare cost of your own workforce, eliminate subscale services, optimize service line spend, maximize IT spend, flex the workforce, find the waste, reconsider capital spend, reduce the cost of leakage, reduce bad debt and avoid potential costs.

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New Survey Links Supply Chain Management to Better Quality and Patient Care

Historically, supply chain management has struggled to get the attention it merits. Over the years, it has been increasing in importance and a recent industry survey supports this increased focus.

The survey highlights opportunities for improvement and modernization in supply chain management. Most importantly, in my opinion, it found that outdated and manual healthcare supply chain management processes detract from care delivery. Frontline clinicians said that they spend a full two hours per 12 hour shift managing inventory issues. Nearly two-thirds of those frontline clinicians said they wish they could trade the time they spend managing supply chain for more patient care time.

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Medical Labs Find Financial Efficiencies by Identifying and Fixing the Recurring Cost of Bad Quality

Like everyone in healthcare, clinical laboratories and pathology groups feel the financial squeeze. Shrinking budgets and decreasing prices for lab tests have made financial efficiencies a primary goal for nearly every medical lab in the United States, as noted in a recent article in Dark Daily. According to the article, labs shouldn’t only focus on low-hanging fruit like reducing staff overtime. They should also turn their attention to one of the biggest cost control opportunities: reducing errors.

The article notes that the “recurring cost of bad quality” is a fairly new concept in clinical laboratory operations. There have been attempts to address it, but unfortunately, much of the recurring cost of bad quality is nearly invisible. The problem is exacerbated by the fact that poor quality is all too often accepted as a normal consequence of lab tests.

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Everyone Wins with the Right Strategic Relationship

There are organizations—healthcare ones among them—that are oriented towards insourcing functions, even when those functions lie outside of the organization’s core competency. There was a time (and still may be times) when full insourcing of the supply chain made sense: think Ford Motor Company in its early days. However, it is becoming more difficult to make a case for insourcing non–core functions, especially in healthcare, when better efficiency, more flexibility, higher profit margins and improved patient care can be achieved through strategic relationships.

That being said, you don’t want a strategic relationship with just anyone. Strategic relationships that align the capabilities and interests of two different entities can enable both organizations to deliver better service and better products. In today’s complex and dynamic healthcare marketplace, agility, efficiency and quality are the new drivers of success, and leveraging strategic relationships can turbo-charge performance.

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Driving Transportation Logistics to the Next Level to Create Systemness

Recently, our work with client Inova Health System, was the focus of a feature article in Greenhealth Magazine, the publication of Practice Greenhealth.

Inova Health System, based in northern Virginia, is a complex network of hospitals, outpatient facilities, physician practices, and health and wellness initiatives that serves more than 2 million people a year. The breadth of services provided makes for an equally complex method of getting physical materials—blood samples, lab results, medical equipment, pharmaceuticals, supplies and more—from one location to another.

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Lessons from Outside Healthcare: Turning your supply chain into a strategic asset

In this age of technology and disruption, we often look outside of our own industry for new ideas to make things better and more efficient. And, “while hospitals are not factories and patients are not cars, health systems can learn valuable logistics lessons from the automotive and retail industries,” noted a recent article in Becker’s Hospital Review.

Outlined in the article are seven supply chain lessons gleaned from industries such as automotive, electronic and industrial production:

in Best Practices / Blog / Healthcare Innovation / Intra-company Logistics / Value Driven 0 comments