Written By: Michael Koory, RVP of Sales
4 Innovative Ways to Contain Healthcare Financial Leakage
The financial risk to health systems has never been higher. Decades of reimbursement reductions coupled with operating cost increases have left health systems executives no choice other than innovation. The traditional methods are no longer enough.
For something to be transformational, it must change to grow or metamorphize. And, change can be difficult even when moving from bad to good. We have all seen our New Year’s Resolutions fly out the window in March or even the end of January. So, what works? How can we bring the change so desperately needed to the health systems?
A Guide with a Map - If you have ever been lost in the woods or lost in a new city, you immediately understand the value of a guide and a map. If you rely (as I do) on your GPS to help navigate the way, it is easy to understand the value of a guide with a map. We all need someone who has trekked the path before to help us achieve our goals. A guide is especially essential in healthcare. Our industry is, in some of the most change persistent times in history. The layers of change heaped upon the healthcare providers are unprecedented.
Add Visibility - No one sets out to build a system with leaks. The course of stopping financial leakage is not about finding who failed or who didn’t do something. All procurement systems have oversight and usually excellent system controls. Healthy system purchasing operations are complex and contain millions of moving entities, because of the constant pace of change, compliance variable, and multiple human handoffs, control gaps exist. They exist, but they are hard to see because of dark data.
Illuminate Dark Data – SpendMend views dark data as the practices, information, and system data hidden from the standard operative view. It exists due to disparate systems, numerous handoffs, multiple entities, vendor practices, not shared industry information, and practices. These cover the control gaps or cause the control gaps that lead to financial leakage.
Limit Financial Leakage – Beyond the hard dollar financial costs, there are high soft dollar costs in the financial leakage. How much time does your staff spend chasing issues outside of their job description? How many corporate initiatives get inadvertently sabotaged because the team is distracted, chasing problems down outside of their department? Are you experiencing excess turnover? Are goals being missed? All of these are caused in part or entirely from financial leakage the strain of closing down the gaps.
The Path to Prevention – There is hope, and the path is one I know exceptionally well from guiding clients down it in the past. My experience helping health executives by using a recovery audit has proven that a guided audit identifies more initial savings and more control gaps to close for future savings. Using a guided audit like SpendMend’s Mending audit can identify up to $1.25M for every $1 Billion in spend (click here to learn more from our webinar). You can innovate and contain loss in your health system.