Best Practices for Bending the Expense Growth Curve
Topics: Margin Performance, Finance
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Executive Summary
Did you know that the average hospital could see margin improvements of 25% or more by using reverse auction technology to manage multiple vendor bids? Or a 10% to 15% increase in margins through more effective use of third-party administrators?
Labor and supply costs currently account for two-thirds of hospitals' total costs and are expected to continue rising at nearly 5% a year. To combat this problem, hospitals must move beyond one-time cost control measures to create sustainable cost improvements.
This collection features best practices for bending the expense growth curve, including tactics for:
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Work with physicians and vendors to reduce variation among preference items to reduce supply cost spending.
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Reduce long-term labor cost spending by conducting principled headcount reductions and optimizing benefit spending.
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Create sustainable cost reductions by boosting staff productivity and reducing reliance on premium labor.
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- Succeeding under value-based purchasing
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- Targeting top-DRGs for LOS reduction
- Rationalizing utilization across the continuum
- Ensuring effective care transitions
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- Managing an effective medical perimeter
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- Fostering growth in the ambulatory environment
- Evaluating service line performance
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Managing Supply Costs
