PRODUCTS & SERVICES
• Environmental Services/Linen: This is an area that can have a significant impact on an organiations quality and patient sat- isfaction scores, she noted. tiliing a pur- chased service company to manage V linen benefits hospitals with streamlined processes, a consistent training program for its employees and utiliation ideas that could financially benefit the hospital.
• Copiers/Printers: tiliing a team of experts that stay up to date on the latest greatest copierprinter technology can benefit an organiation, she insisted. imi- lar to the other two top categories, this is historically already a purchased ser- vice. owever, we consistently find that the contract is not managed, nor are there quarterly business reviews conducted with the supplier.
• IT: There are multiple categories within this department to evaluate (e.g., hard- ware, software, telecom, cyber security, etc.). There is so much competition in this field, evaluating providers for various IT services can result in large dollar savings for a health system. In addition, evaluat- ing lease versus buy options for employee laptopstech is important.
•reighthipping, Invoice udit ervices and aboratory remain candidates, too, she added. Two executives at TractManager, which announced in ovember it was being acquired by symplr, point to three areas that may be low-hanging fruit. They are staff- ingrecruiting, revenue cycle management and vending services, according to Michael Costantini, Vice President of ales, and ric limp, Purchased ervices Director. • Staffing/Recruiting: ecruiting for health- care, both clinical and non-clinical requires a degree of expertise and network of connections to properly source and vet qualified candidates, Costantini and limp agreed. If you have recruiters on staff, you are likely paying them commissions and salaries, but third-party recruiters com- monly work on commissions alone.
• Revenue Cycle Management (RCM): Outsourcing some or all the revenue cycle management function almost always results in a savings, they indicated. This can be anything from illing Collections to Claims Management or Medical Cod- ing. This is due to the complexity of the billing processes and processes for secur- ing reimbursement that a health system simply cannot staff the expertise required to perform end-to-end CM processes at scale.
• Vending Services: This is one that is often overlooked because it doesnt show up as a high spend, both insist. hy That is because vending services should be a
profit center rather than an expense. Com- panies like Coca-Cola and Pepsi will pay incentives and commissions to the hospital while providing the products and vending machines at no direct cost to the hospital so that they can secure exclusive rights to sell their products in a health system, they added. “The typical process for identifying high-impact purchased services involves identifying categories of high spend and forming initiatives around those purchased services, limp said. lthough vending is a purchased service, the spend is offset by the revenue that is generated. The vendors charge for the products and services, but they credit the hospital for their com- missions on anything they sell. Therefore, it will not show up as a high-spend category even if it is an area of opportunity.
Michael Costantini
Expanding the base ut Costantini acknowl- edges upply Chains lim- ited inuence if any over these areas. upply chain has an indirect inuence on these categories, but ultimate inuence is driven by the primary decision makers in those departments, he said. ood ervices is driven by upport ervices, typically led by a Dietary Director or Vice President. evenue Cycle Management is driven by the inanceccounting group, typically led by the CO. taffing by ervices and depending upon department, driven by the Director, CIO, CMO and CO depending upon area of staffing. Traditionally, the department heads drive control, but the pandemic has aligned hos- pitals, and aligned the C-suite organiation- ally around profitability of the hospital, he continued. The focus is to drive ITD arnings efore Interest, Taxes, Deprecia- tion, and mortiation, especially since the downturn of elective surgeries. Purchased ervices is the last bastion of significant sav- ings and is providing increased inuence toward upply Chain to drive savings. eighing purchased services is like bal- ancing scales, observes red Crans, ealth- care usiness Development xecutive, t. Onge Co. The premise behind purchased services is
Eric Slimp
that an expert in a given area will do a better ob and do it more cost-effectively than an amateur, Crans told Healthcare Purchasing News. ealthcare organiations are experts in rendering care, not in providing support services. There are scores of services that
44 January 2021• HEALTHCARE PURCHASING NEWS •
hpnonline.com
can be bought instead of made. Crans lists such examples as elevator maintenance, biomedical service, transport services, copy and print management, record retention and storage, waste management of all types, legal services, translation services and transcrip- tion services. The three that I think would win any- where, anytime and in any sie organiation are nvironmental ervices, ood ervices and aundryinen Management, he con- tinued. The large management companies are simply too experienced compared to self- ops. They have people, processes, technolo- gies, data, aggregate purchasing capabilities and a willingness to go at risk to guarantee savings. aundryinen Management is extremely capital intense, and while some organiations have and are building their own operations, most realie very quickly that the numbers they ran in the planning process do not hold up in real life. gainst the backdrop of the pandemic
makes for an intriguing time to consider pur- chased services as an opportunity, advises arbara train, CVP, a veteran value management consultant with years of expe- rience in hospital and healthcare systems. olistically, its a good time for every
health system to take stock of 2020 to deter- mine what worked well and why, train insisted. Did you miss the voices of staff you may have furloughed hat opera- tional departments were not heavily relied on or what layer of administration seemed frivolous in hindsight Could you have used outside help to fill in the gaps where needed and felt empowered to stop their services when they were not train encourages health systems to con-
sider trimming the fat that may exist in non-core business services such as ood, nvironmental ousekeeping, Courier, Valet, IT or PC maintenance, aste Manage- ment, harps Disposal, ecycling, ecurity, Parking otarage Management, huttles and others.
Accentuate the positive Ds aggard cautions against spreading the stereotypical stigma typically associated with purchased services. ome view outsourcing or purchased ser-
vices as negative, she said. owever, that is not always the case. Most of the healthcare functions that are outsourced require on-site resources that live locally. The only differ- ence in outsourcing versus insourcing for these functions is the outsourced team gets their check from another company (aka pur- chased services). owever, they are working side-by-side the hospital employees. In addi- tion, outsourcing doesnt have to be 100 per- cent outsourcing of a department or function.
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