Healthcare Cost Management Best Practices | E. 61

Discover six ‘’better than best’’ practices in cost savings for hospitals.

Episode Introduction 

Adopting new habits can reap significant cost savings rewards. Lisa introduces six proven best practices including, creating an Accelerating Cost Savings team, why hospitals should follow the cost savings ‘’yellow brick road’’, and why frontline employees are your best source of innovation. Lisa also cites Tom Cruise as an illustration of how hospitals can benefit from cost reduction experts and reveals why reducing waste and understanding variation is the new area to uncover cost savings.  

 

Show Topics

 

 

• Creating an Accelerating Cost Savings team 

• The vital role of a cost savings roadmap 

• Following the example of Tom Cruise 

• The cost savings benefits of negotiation skills training 

• Vendors and employees: the price of relationships

• Ask for new ideas from your frontline employees 

• Implement a cost savings discipline 

• Reducing waste and understanding variation 

 

 

 

01:54 Creating an Accelerating Cost Savings team 

Lisa said the creation of a leadership team for cost savings must include key department leaders, not just the CFO and their team. 

 

‘’One of the best practices from the field that I have been involved with over the number of years, but particularly in the last two years that's been particularly successful during this challenging time, is creating a leadership approach to cost savings….. I've taken some wording from different hospitals that have used a version of this. We kind of created our own now, but it's called Accelerating Cost Savings team. So having an accelerating cost savings team and this team just can't be the CFO. The CFO does absolutely need to be involved but this needs to be a leadership team that consists of a CNO, the CFO, the Chief Medical Officer, VP of Supply Chain, VP of Performance Improvement, and key department leaders that come in and out of the group as needed. And this doesn't have to be an overbearing, "Oh, it's another meeting." This is a weekly meeting. It's usually kind of in conjunction with an outside partner. We've done this work and it's been really effective and I think from the feedback we get from hospitals and why these teams have been so successful in pulling together these cost savings initiatives and achieving tremendous outcomes is having a trusted partner as part of the team. And I'm soon going to be finishing up on lessons learned from one of these teams and we've had the opportunity to interview everybody on the team and get their feedback. We asked them 10 questions and we've pulled it all together and it's going to be really interesting research, but I do feel like having this team, even if they can meet, be a conference call, even if it's 45 minutes a week, I will tell you that it's transformative.’’

 

 

07:49 The vital role of a cost savings roadmap

Lisa cited Keith Cunningham’s philosophy of following the ‘’yellow brick road’’ to cost savings to achieve your goal. 

 

‘’Number two is to have a detailed cost saving strategy, a roadmap. We work on these cost saving strategies and roadmaps for our clients and they take a totally different approach or a totally different and totally different outcome versus those hospitals that just say, "Okay, our strategy for this year is we need to take out $40 million and that's our goal and we're going to take out $40 million. Go do it. Go find it." And it's departments it's kind of divvied up. And that's a really hard way, I think to go about it. These goals are just getting bigger and bigger. So better than best practices. Have a strategy, sit down, spend the two or three days, bring somebody in that can lead the initiative and kind of pull it all together.Have a roadmap, this playbook that now you know, what's going to happen in January? What's going to happen in February? Where are we going to look for savings and which departments? It's not a broad takeout 5%. These are the areas we're really going to focus on and this is how we're going to do it. And this is...really going to focus on. And this is how we're going to do it and this is w