High-Stakes Changes: The Path to Cost Containment
Healthcare organizations are looking beyond one-time cost savings moves, taking on higher risks and investing in long-term strategies to improve their cost structures and stay competitive in today’s unpredictable environment. While hospitals are still pruning costs in areas such as materials management, they are also recognizing the need to forge deeper alliances with providers and payers, gather data more strategically, as well as invest in specific technologies to gain deeper understanding and better control of their care delivery costs.
The 2015 HealthLeaders Media Strategic Cost Control Survey, which polled 324 healthcare leaders across the country, found that purchasing and supply-chain efficiencies (64%), process redesign (58%), and business function consolidation/centralization (40%) were the three areas that provided the highest dollar value in cost containment contributions for the fiscal year. The three largest barriers to achieving sustainable cost reductions were not having the right data on the true cost of care (60%); insufficient integration with care partners (41%); and lack of technology in place to achieve goals (40%). With regard to true cost-of-care data, hospitals and health systems are indeed forming closer relationships with payers through ACOs and other care models. According to the HealthLeaders Media survey, 36% of respondents said they are in or will be in a joint venture within three years with a payer organization as part of a strategic cost control initiative. As such, these partnerships provide unprecedented views of claims, pharmacy, and other previously unavailable utilization data from payers. Having access to claims data in real time—as opposed to one or two years later—enables healthcare organizations to better understand their sickest patients, properly segment them into clinical care categories, and target healthy patients with appropriate wellness services and programs, say hospital leaders.
Organizations also recognize now, more than ever, the key role analytics and predictive modeling play in monitoring expenses and productivity. For example, in the same survey, 28% of respondents said that data sharing and clinical analytics have the biggest economic impact on their organizations’ strategic cost control efforts, followed by care management staffing (23%) and value-based care models (22%). Other areas of cost containment focus include integration of clinical and financial IT systems. In the survey, 55% of respondents said integrating clinical and financial data is the top IT-enabled activity that will deliver cost reductions for their organization over the next three years, followed by analytics support for expense and cost monitoring (53%) and identifying clinical process variation (48%).