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At the Margins

Our latest insight into health care margin improvement efforts

Why your supply cost savings aren't enough

by Natalie McGarry May 1, 2015

Traditionally, providers have contained supply costs by promising suppliers larger orders in exchange for lower unit prices.

Not only is this price-for-volume strategy insufficient under current margin pressures, it comes with significant downsides.

To achieve higher volume orders, physicians are required to limit their purchase options, which can damage physician engagement. In addition, the extreme focus on volume often comes at the expense of considering the long-term costs associated with a product.

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Tackling variation one DRG at a time? Two reasons DRG teams fail.

John Johnston April 28, 2015

Reducing variation in care delivery can be a significant cost savings opportunity in most hospitals, regardless of the payment model. That means it should be on the top of the CFO's priority list and for many of our members, it is.

One of the latest trends we're seeing is the deployment of "DRG teams"—teams that work with providers to effect change in care processes for individual Diagnosis Related Groups (DRGs).

While everyone's approach to assembling and deploying a DRG team is a little different, we are finding one common aspect—none are really making an impact on cost reduction.

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Why price transparency isn't as scary as you think

Patrick Kelley April 23, 2015

It's no secret that price is an increasingly important factor in patients' health care decisions.

But you might be surprised to learn that some progressive organizations are using this change to their advantage.

A recent Financial Leadership Council survey shows that 55% of insured patients report paying more attention to their health care costs and 34% of patients believe keeping out-of-pocket insurance costs down is more important than retaining their doctors.

With one-third of patients willing to consider other options to reduce health care costs, organizations around the country are racing to improve their patient access processes.

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Shades of transparency: Pick the right approach for your price point

by Natalie McGarry April 10, 2015

For decades, the prices negotiated between commercial payers and providers have been closely guarded.

But as the health care market evolves and consumers more commonly make health decisions based on price, a host of factors—including state regulations, technology, and providers and payers sharing their own prices—have increased the supply of price information.

Competing on price is becoming a requirement for consumer business. Our 2014 Primary Care Consumer Choice Survey revealed that if a patient doesn't know the price of a primary care visit, 92% of them would rather go to a different clinic for lab tests, X-rays, or pharmacy.

Clearly, price uncertainty is almost certain to drive consumers away. To compete in the health care retail revolution, providers will have to offer pricing information to patients.

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Four steps to engage physicians in clinical supply cost reduction

Charles Moran April 9, 2015

If you are concerned about engaging your physicians in cost and quality improvements, you aren't alone.

Our annual health care CEO survey found that almost 90% of hospital and health system executives are worried about this too—and for good reason.

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Three tips you don't want to miss for revenue cycle integration

by Ellie Stoler April 2, 2015

With provider mergers and acquisition activity regularly broadcast across health care news sources, the topic of revenue cycle integration has increasingly become a regular point of conversation among health system leaders.

While revenue cycle integration means different things at different systems, in this case I am referring to the consolidation of revenue cycle related staff, processes, and structures across a health system’s various sites of care, including hospitals and associated medical groups.

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Pop quiz: How much do you remember from ICD-10 training?

James Green March 31, 2015

Do you remember what you were doing exactly one year ago?

Me neither. But chances are, for many of us, it was ICD-10 related.

For the past year, many organizations have paused their ICD-10 conversion preparation. Now it's time to pick things up again. There's little time between now and October 1, and the stakes are too high to ignore.

The top-performing organizations I work with are focusing on two areas: assessing the impact of previous training efforts, and tracking ongoing performance.

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Why you're not as ready for ICD-10 as you think

Ed Hock March 24, 2015

Until now, ICD-10 seemed like the boy who cried wolf.

But ready or not, it's looking more likely that the ICD-10 conversion is on its way.

With several years of preparations behind you, it's easy to get lulled into a false sense of readiness. Unfortunately, most executives I've recently spoken with have realized they're not as ready as they thought.

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