Labor
Supply Chain
Cost Management

Reduce Labor Costs

Labor costs are the single largest expense item for most hospitals, often exceeding 60 percent of net patient revenue. Organizations need to manage their labor spend carefully to curb costs enough to keep pace with revenues. Those that pursue a data-informed, forward-thinking strategy can slow the growth of labor expenses today, while positioning themselves to succeed in a future of continued revenue decline and increased workforce shortages.

Maximize Contract Labor

As demand and costs for contract labor soar, some healthcare systems are seeing a substantial annual increase in their contract labor spend. With a disciplined, data-driven approach, organizations can successfully manage this growth—and both lower costs and raise patient satisfaction.

Improve Provider Contracts

Healthcare systems often struggle to identify and realize savings opportunities in provider contracting. A key barrier is a lack of analytic resources and expert guidance needed to efficiently evaluate large data sets to inform decisions about contracts—and to measure and monitor contract performance over time. Organizations do best when they focus on streamlining and automating their contracting strategies with a goal of maximizing value for all parties.

Elevate Outsourcing

Healthcare organizations often seek to lower costs by outsourcing some labor force areas. And yet like most cost-savings strategies, outsourcing carries risks for an organization, and it isn’t “one size fits all.” Systems that succeed with outsourcing pursue a thoughtful, data-informed approach: one that promises not only lower costs, but increased value to their organization, and a positive experience for their team members. This way of outsourcing is called smartsourcing.

Reduce Pharmacy Supply Costs

Drug costs are among the fastest-growing expense categories for healthcare providers, and a recent AHA report confirms what leaders already know: skyrocketing drug prices impact patient care and strain budgets and operations. Implementing effective cost-containment strategies can help curb expense growth and minimize impact on your organization.

Decrease Interventional Supply Costs

Supply costs are the second-largest expense item for a healthcare system—and interventional supplies often represent a major portion of this spend. Organizations that thoughtfully improve their interventional supply chain may significantly lower their overall supply costs—while preserving patient safety and provider engagement.

Manage General Supply Costs

Healthcare supply costs are significant and growing; organizations that optimize general supply costs can realize major savings. And compared to pharmaceutical and interventional supply-chain improvement efforts, work here may require less change management.

Cut Blood Utilization Costs

Blood products are costly and often in short supply. Hospital CFOs routinely list blood products as one of their top five cost concerns and seek to manage this resource carefully. Healthcare systems that succeed here can decrease inappropriate use of blood products—and significantly improve both clinical and financial outcomes.

Optimize Vendor Costs

The complexity of healthcare has led many organizations to develop numerous relationships with vendors providing supplies and services. The aggregation of these relationships has added to system complexity—and ultimately to the cost of care. To succeed, organizations need data and systems in place to regularly and effectively evaluate, manage, and track vendor decisions, relationships, and contracts.

Reduce Clinical Support Services Costs

Clinical support services such as lab, imaging, and pharmacy are key contributors to quality and cost of care. Analyzing and understanding costs and variation—and identifying low-value care practices that should be “de-adopted” across the system—can ensure that care is delivered efficiently and consistently from patient to patient. Organizations that do this will see significant reductions in supply and labor costs and improved patient safety and quality outcomes.

Increase Efficiency of Ambulatory Operations

The increase in volume and types of care delivered in the ambulatory setting is a national trend, challenging organizations to increase efficiency and effectiveness while simultaneously showing a return on investment. Health systems that achieve this administrative trifecta deploy a data-informed strategy to identify and execute initiatives that boost clinical throughput, quality excellence, financial performance, and patient and provider experience.

Enhance Analytics Processes & Capabilities

Analytics resources are critical for delivering the insights and information needed for healthcare transformation. Yet many systems struggle to create a robust and high-performing analytics operation. Successful organizations engage leadership and build a data-literate culture to overcome point-solution fragmentation and find ways to enable analysts to operate at the top of their license.

Decrease Building & Equipment Costs

Despite significant and ongoing investment in acquiring and maintaining their buildings and equipment, most healthcare systems fail to implement the processes required to optimize their use and minimize total expenditures. Organizations that do pursue this opportunity can realize significant savings and efficiencies.

Improve Cost Accuracy and Transparency

Healthcare systems are struggling to combat shrinking margins driven by lower inpatient volumes, shift from inpatient to outpatient, increased patient bad debt, and continued uncertainty around payment reform. To enable meaningful improvement, systems need transparent, accurate costing to make strategic decisions about at-risk contracts and payment negotiations.

Let us help you gain a comprehensive view of true costs and surface opportunities to improve outcomes.