Tim Ingram, MBA, CEO at 60:60 Consultancy
Historical: Finding Your Axioms
Everyone in healthcare has witnessed the devastating impact of Covid-19, both personally and professionally. We’ve seen hundreds of articles stating the need to start recovering from the effects of Covid-19, and there has been a steady uptick of elective surgeries and services. Yet, healthcare still stands to lose over $300 billion in 2021. Now is the time to examine new methods and partners to financial recovery. A firm footing in the recovery process is necessary to support and shore up the economic bedrock of healthcare.
Business as usual no longer possesses the exact definition of 2019 within healthcare. Supply chain management still needs to focus on the axioms to rebuild a new strategic action plan. The wheels of healthcare stop for no viruses. We are 24/7/365, and SCM supports the organization’s mission during those same hours.
Refocus: “No Margin, No Mission,” Establish a Starting Point
For lack of a better term, the cogs of healthcare are greased with a healthy margin. But, like it or not, a profit is required to keep the doors open. Purchased services are an excellent place to start in identifying opportunities. Like many healthcare organizations, these administrative areas were neglected because of Covid-19. Purchased services are a treasure trove of possibilities. The market is starving for an uptick in business, and the landscape is ripe for a relook at your 3rd most significant operational spend. NOTE: I would advise that leadership take a look at supply chain management and ensure staffing is sufficient to manage purchased service contracts. In addition, establish a committee to review all contracts semi-annually. Leadership needs to understand the depth of this spending and provide the resources to manage it.
Technology: Build a Digital Library
CEOs and CFOs are currently focusing on technology upgrades, revenue recovery, operational expense reduction, and staffing. All of this intertwines with pricing and utilization. Competitive positions support the premise of creating a digital library of services categorized by modalities, departments, and financial performance. Constructing a scorecard process is essential in adding value to your utilization management process.
Dos and Don’ts
I have written other posts and articles outlining the dos and don’ts of a contract, but there are other practical matters at hand. For example, part of the recovery process must involve strong partnerships with ALL stakeholders. Therefore, it is essential to involve them and commit to a new and dynamic, progressive, strategic solution to solidify fundamental and measurable objectives.
Opportunities: Focus on Your Most Significant Opportunities
There are several opportunities inside revenue and nonrevenue-focused areas such as bill only, electronic invoice payment, utility management, air and gas, print, waste, and 3PLs. It’s challenging to move away from organizational norms and long-time partners; however, it is worth reviewing new players, new processes, and alternative sustainable solutions.
The market has several companies that focus on purchased services within healthcare. However, how do you determine which one is a good partner? A disinterested party can assist in identifying a possible fit. The ROI, in most cases, pays for the service and reduces operating costs. The focus is to build a more responsive Management Action Plan (MAP) to address current and future partnerships. There exists ample opportunity to build in cost avoidance within any given service line.
There are no shortcuts to managing contracts, and your end-state should stand on a solid foundation of intelligent data, knowledge, experience, and a familiarity with the organizational business model.
Know When to Pivot
Review, validate, measure, and repeat. My experience over the past 40 years has taught me not to anchor myself on a “one-way-fits-all approach.” Instead, the most progressive companies know when to pivot.
Enjoy the journey!
