Reform is driving hospitals to place more value on each dollar spent and seek creative solutions for savings.
At the Becker’s Hospital Review 5th Annual Meeting on May 17, Richard Kunnes, MD, managing principal and CEO of The Sevenex Group, outlined the ways in which resource optimization can produce guaranteed savings.
Resource optimization asks two fundamental questions:
• What are hospitals using that is not needed?
• Given all resource expenses, which can be converted into revenue?
Resource optimization serves all hospitals, regardless of size, and offers high, sustainable return on investment. “All of these savings and revenue can be achieved without layoffs or new hires,” said Dr. Kunnes. Everything a hospital uses from its bedsides to its parking lots fall under the umbrella of resources and each area offers opportunities for optimization.
"The average hospital has resource expenses 50 to 65 percent of all operating expenses," said Dr. Kunnes. "Anytime you do not have to use something, those saving go to the bottom line. Anytime you can convert an expense to revenue, it goes to the bottom line."
The Sevenex Group offers hospitals more than 1,000 resource optimization solution. Clinical solutions are backed by peer-reviewed literature. "Do not reinvent the wheel," said Dr. Kunnes. "Chose solutions that are standardized and proven in practice." A consistent approach reduces variation in productivity, EBITDA and cost of capital.
Hospital leadership has the power to determine the selection and sequence of optimization solutions, customize the solutions and verify the resultant savings and revenue. Two to three executive champions can effectively delegate and execute solutions.
Savings can be as simple as elimination of an unnecessary supply. Hospitals need a contrast medium, such as barium sulfate, for certain procedures. But, even major academic medical centers have begun to use whole milk, or soymilk for lactose intolerant patients. "You will save a lot of money and increase patient satisfaction,” said Dr. Kunnes. “It isn’t about finding a cheaper barium sulfate, it is about getting rid of it."
Resource optimization seeks not only savings, but also opportunities to convert cost to revenue. For example, inpatient dialysis patients are a cost for hospitals. If a patient requires three sessions during an inpatient say, administer the first two sessions in the hospital and then discharge the patient prior to noon. Administer the last dialysis session as an outpatient procedure. Even if a hospital needs to arrange transportation to an outpatient location, it will receive full payment for that procedure.
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