Where 46 health system executives will focus to cut expenses in 2024

Becker's asked C-suite executives from hospitals and health systems across the U.S. to share their organization's areas of growth for the next few years.

The 46 executives featured in this article are all speaking at the Becker's Healthcare 14th Annual Meeting on April 8-11, 2024, at the Hyatt Regency in Chicago.

To learn more about this event, click here.

If you would like to join as a speaker or a reviewer, contact agendateam@beckershealthcare.com. For more information on sponsorship opportunities, contact Jessica Cole at jcole@beckershealthcare.com.

As part of an ongoing series, Becker's is talking to healthcare leaders who will speak at our conference. The following are answers from our speakers at the event.

Question: Where are your health system's biggest opportunities for reducing expenses over the next three years?

Cliff A. Megerian, MD. CEO and the Jane and Henry Meyer CEO Distinguished Chair, University Hospitals (Cleveland): At University Hospitals, our commitment is to continually improve the value of care we provide to our patients. It is the North Star in everything that we do. To that end, we are always looking for innovative ways to boost the quality of the care we provide while reducing costs.

Every institute, department and service line at UH is engaged in the daily, important work of quality improvement. It takes dozens of different forms -- from developing new workflows for managing incidental findings found on imaging scans, to developing new IT platforms for ensuring patients with metastatic colorectal cancer receive the biomarker-specific therapies they need to have the best outcomes. These are just two examples; there are so many others. We truly do have a passion for quality at UH. The numbers tell the story – for example, we’ve slashed surgical length of stay from 6.2 days to just 2.5 and have reduced our mortality from sepsis by 70%.

But none of this is possible if our system isn’t financially healthy. On the cost side of the equation, we’re currently engaged in a thoughtful process to identify opportunities for greater efficiencies in our corporate expenses, to be accompanied by action plans for achieving them. In addition, we’re working to achieve economies of scale in our various service lines by optimizing our footprint across Northeast Ohio. One key part of this is by establishing volume centers in our region where patients can reap the rewards of efficient, reproducible processes for select procedures. This novel arrangement yields both higher-quality outcomes and lower costs. We know, of course, that volume drives repetition, which drives excellence.

By gaining efficiency, whether in corporate expenses or through reimagining how and where we deliver care most effectively, we aim to do our part to achieve the cost savings so crucial to delivering overall value for our patients.

Peter D. Banko. Mountain Region President, Colorado/Kansas/Utah of CommonSpirit Health (Chicago): Our region’s biggest opportunity (and all health systems for that matter) for reducing expenses over the next 24 to 36 months is to holistically connect the dots between the people process and strategy process with operations. Or, more simply said, execution. That missing link so we no longer fall short of our promises. Bridging the gap between what we want to achieve with reducing expenses and the ability of our governance and leadership to deliver it. Know yourself as a leader. Know our people and our business. Insist on realism. Set clear goals and priorities. Expand capabilities. Follow through. Reward the doers.

At the heart of this for us and other systems in terms of transformational tactics is (not just) committing to but now capitalizing on efficiency and effectiveness at scale. This requires meaningfully moving toward a unified clinical enterprise, centralizing the work, and creating consistency in strategy, structure, process, metrics, and people. It is seizing the opportunity to prioritize systemness, emphasize leadership, discover synergies, and minimize disruption in the process. There are also more practical tactics in building a culture of operating discipline and delivering results – with workforce, leadership, supply chain, purchased services, revenue cycle, care management, throughput and attachment, and growth.

Shelly Schorer. Chief Financial Officer of California Division at CommonSpirit Health (Chicago): I would say our biggest opportunity to reduce expenses would be in a couple of areas, portfolio management of all assets (leases, office space, clinics, etc.) and managing patient flow appropriately in length of stay, emergency room throughput, less readmissions etc.

Greg Till. Chief People Officer of Providence (Renton, Wash.): The most vital contributors to high-quality, compassionate care in our communities are the dedicated caregivers, who are called to serve. Our caregivers are the heart of every hospital and represent the biggest investment health systems make. To sustainably address affordability in healthcare, we must address workforce costs in ways that also improve working conditions for those providing care.

First, reduce the reliance on costly travelers and premium pay by creating an environment that attracts and retains the biggest hearts and the brightest minds. Second, pursue technology that enables clinicians to practice at the top of their license, increases capacity, and restores the joy of practice. And third, experiment with new models of care, to increase the value contribution every care team member makes, while offering more flexibility, greater potential for growth, and a heightened sense of belonging.

David Verinder. President and CEO of Sarasota Memorial Health Care System (Fla.): Rising costs of supplies and related logistics are always an important focus. We continually look for ways to trim costs, reduce waste, and maximize efficiencies wherever possible through cost, quality, and outcome analysis, while still providing the same level of quality and timeliness expected within our health system.

But sometimes you have to spend to save, so we also invest in initiatives that yield significant returns on investment, such as employee health and satisfaction. For example, this year, SMH opened an employee pharmacy and increased its investment in preventative care for our 10,000+ employees, which we believe will reduce healthcare expenses for our staff and the health system. We also encourage our leadership team to promote a positive, supportive work environment that routinely recognizes our team’s dedication and diligence. Such efforts increase employee engagement, reduce turnover and lead to safer, higher quality patient care.

Gina Calder. President of Barnes Jewish St. Peters Hospital and Progress West Hospital (St. Peters, Mo.) : I have the privilege of leading two hospitals that sit within the larger BJC HealthCare system, so we have the benefit of scale with bargaining and purchasing power, while at the same time tailoring the patient experience to the communities we serve. Still, we are always looking at our expenses so we can target as much investment as possible into the areas that make a difference.

Staffing will always be a major part of our expense base, but it’s not a fixed cost, so we can be flexible and creative. At BJC, we help ourselves by giving our people a great experience and growth opportunities so they want to stay with us long term. It drives greater value to invest in our own people than to continuously recruit, train and lose new team members, so the money we spend now to retain and develop our people will save a lot of expense later – and result in much better patient care.

With that said, no matter how much we invest in our people, the fact is the talent pool is shrinking, the patient population is aging and we will never have enough people to deliver the extraordinary care our patients expect and deserve if we don’t adapt. It is critical we embrace new technology to streamline our processes, create efficiency and focus our people’s time on the work only they can truly do. And we need to keep pushing ourselves to challenge the status quo, because that’s where the real opportunities for change and progress – and savings – are going to come from.

Beth Steele, MSN, RN. Chief Operating Officer of Owensboro Health Regional Hospital (Ky.): We need to reduce labor expenses by improving pipeline and workforce development, using automation, and process improvement. Some of the other areas we will continue working on are supply chain improvements with service line involvement and improving our performance on value-based initiatives. Lastly, using strategic partnerships to optimize operations to reduce expenses.

Harlan Levine, MD. President of Health Innovation and Policy at City of Hope (Duarte, Calif.): At City of Hope, we are continuously striving to become more cost-effective in care delivery. For example, we are engaged in optimizing site of care, leveraging our on-site hotels. We also invested in Reimagine Care, a company that delivers cancer care and symptom management to cancer patients who have recently been discharged to home.

Additionally, we are shifting toward multidisciplinary team-based care that provides both a better patient experience and a more efficient use of resources. And while we are seeking to lower our acquisition costs for pharmaceuticals, a major driver of our overall expenses, our bigger goal remains to increase the value of the care we deliver. This means, in addition to driving down costs, we continue to invest in transformative research to bring more effective diagnostics and therapeutics to market with the goal of saving more lives.

Susmita Pati, MD. Chief of Primary Care Pediatrics and Chief Medical Program Advisor of The Alan Alda Center for Communicating Science at Stony Brook University (N.Y.): Our biggest opportunities for reducing expenses over the next three years are by increasing our workforce retention rates and implementing digital health interventions that support process improvements and operational efficiencies across our health system. Digital health interventions hold tremendous promise to decrease the cognitive workload for our workforce and, in turn, support improved retention rates. Implementing these interventions with input, feedback, and leadership from clinicians and front-line healthcare professionals is key to success.

Baruch S. Fertel, MD. Vice President, Quality and Patient Safety at NewYork-Presbyterian; Associate Professor of Emergency Medicine at Columbia University Vagelos College of Physicians and Surgeons (N.Y.): As healthcare costs rise it is important to reduce unnecessary expenses. At NYP we are very focused on fostering a culture of safety and reliability. By reducing preventable harm such as healthcare acquired infections we can shorten the length of stay, reduce expense, and most importantly improve patient outcomes. In addition, reducing clinical variation via care pathways is an important step to eliminate unnecessary expenses while delivering world-class care. Investing in quality, safety, and reliability is a win-win.

Michael Prokopis. Vice President of Supply Chain at MD Anderson Cancer Center (Houston): MD Anderson Supply Chain’s biggest areas of expense reduction are focusing on:

  • Encompassing inventory management program, overall
  • Standardization and optimization of supply usage across all categories
  • Consolidation of purchased services, many of which will be further augmented by extending forecasting into actionable demand plans.

Pooja P. Vyas, DO. Vice President and Chief Medical Officer of Christian Hospital Northeast & Northwest Healthcare (St. Louis): Our goal to reduce expenses starts with improving our workplace culture, so we have a place that encourages belonging. This is in hopes of reducing our turnover rates. Along with that, we are hoping to decrease the number of agency employees and increase our number of full-time staff. We also plan to continue our robust efforts in reducing length of stay and readmissions. Our teams have done excellent work this year reducing length of stay and readmissions and our goal for next year is to improve further.

Christine Larson, BSN, RN. Vice President of Medical Group Operations at Advocate Aurora Health (Downers Grove, Ill.):

  • Reduce expenditures for locum tenens physicians/temporary staffing
  • Labor cost efficiency and ensuring all staff are working to the top of license
  • Supply chain optimization and standardization to reduce variation and leverage bulk purchasing contracts with vendors
  • Innovative relationships with community or public health agencies to partner on staffing support, shared resources and mutually beneficial public health-related educational opportunities to support appropriate use of the emergency departments or expensive locations of care provision. (Education to the populations related to “where” is the best place to receive care based on symptoms/urgency, etc.).
  • Value-based care (transition of models of care from volume-based to value-based).

Kim Bennion. Director of Respiratory Care Research at Intermountain Health (Salt Lake City): As organizations move from fee-for-service to value-based reimbursement, anticipated workflows will need to be redesigned for how/where we care for patients (preventive vs. reactive care), how we capture expenses and revenue, and outcome results. Intermountain Health is dedicated to the transition to value-based care, so our work in the next three years will be defining those areas previously defined. If our past performance as an enterprise produces the same results, then earlier identification of patient care issues, providing evidence-based care at the right time, in the right location even when reimbursement does not always apply, then impacting a drop in hospital admissions/readmissions, care that is not deemed medically necessary, and care provided in the least costly location (often the home), will follow. These practices alone impact the cost of care.

Will this be all we do? No, however, our dedication to timely best practices will also lead to high-quality care and decrease the cost of care overall.

Anuj Vohra. Director of Emergency Services - Northwest Region at Hartford HealthCare (Conn.): We are going to start showing the expenses of each test ordered so providers can learn more about the cost of testing. We continue to educate on cost reduction and mindful thinking when ordering tests. We want to provide the highest quality possible while keeping expenses as low as we can.

Patsy McNeil, MD. Senior Vice President and Chief Medical Officer at Adventist Healthcare (Gaithersburg, Md.): Adventist Healthcare primarily operates within the state of Maryland which has a unique reimbursement system in which revenue for acute care hospitals has limits set by a state review body called the Health Services Cost Review Commission. The increased volume of patients coming into the hospital does not generate revenue due to the cap or limit placed by the state. It is therefore very common for our organization and others within Maryland to be extremely firm on the reduction of expenses to maximize the capture of profit.

The most available opportunity for our health system to reduce expenses is to minimize or eliminate the turnover of employees. The costs associated with employee turnover are well known and are especially expensive for leaders and executives. There are hidden costs buried within nonadherence to clinical protocols and organizational processes with this turnover which then extends to degradation in quality and increased lengths of stay as well. Particularly since the onset of the COVID-19 pandemic, the movement of team members, particularly in the concentrated area around Washington, DC, where they have many choices of health systems to work within, is quite a challenge and is always an expensive one when it drives turnover.

Ebrahim Barkoudah, MD. System Chief and Regional Chief Medical Officer of Baystate Health (Springfield, Mass.): Here are some key strategies:

1. Implementing cost reduction strategies: Healthcare can employ various strategies to minimize costs without compromising patient satisfaction and the quality of care. These may include optimizing supply chain management, streamlining operational processes, and leveraging technology to improve efficiency.

2. Addressing rising healthcare inflation: Rising healthcare costs and inflation pose significant challenges for health systems. It is essential to implement measures that effectively address these issues to ensure the sustainability of healthcare services.

3. Improving cost management in rural areas: As hospitals face cost growth in various areas, they have been forced to make cuts elsewhere to remain financially stable. In rural areas, this approach can present unique challenges due to limited resources. Finding innovative approaches to manage costs in these regions is crucial for sustaining healthcare access.

4. Exploring value-creating opportunities: Capitalizing on value-creating opportunities can help solve the cost crisis in healthcare. Utilizing advanced costing systems and breaking down silos within healthcare organizations can uncover hidden opportunities for cost reduction and improved efficiencies.

Scottie B. Day, MD. Chair of UK Department of Pediatrics and Physician in Chief at Kentucky Children’s Hospital (Lexington): Our children’s hospital's biggest opportunity to reduce expenses involves workforce management.

Alvia Siddiqi, MD. Chief Medical Officer of Population Health at Advocate Aurora Health (Downers Grove, Ill.): We have made significant strides in close collaboration and partnership between Inpatient Care Management, Nursing, hospital leadership, and our hospitalist service line around improving our length of stay. This work will continue to evolve as we find innovative ways to have our care managers, nurses, and social workers work to the top of their license through the use of technologies like AI and virtual integrated care. Ultimately, this progress will help drive down our expenses while also improving patient experience.

We are at a pivotal point in healthcare where our value-based care and population health efforts are aligning with our hospital-centric system financial priorities. Readmission reduction is a key strategy where we all stand to win:

1. The patient wins from improved communication and care coordination efforts that lead to better patient experience and engagement.
2. The system wins from our performance in value-based care contracts and the CMS readmissions penalty program, as well as the efficiencies gained from reduced use of resources.
3. Our community benefits from improved patient care, quality, and health outcomes, while ultimately improving access to care.

Our ongoing integration efforts are leading to best practice sharing from across the Southeast and Midwest regions. There’s no reason to reinvent the wheel. I’m excited about what the future holds from shared priorities and goals across our organization that will lead to excellence in clinically integrated care across our vast footprint.

John Cacciamani. President and CEO of Temple Health-Chestnut Hill Hospital (Philadelphia): (1) Premium labor reduction (plus bonus and overtime) and (2) Synergies with GPO.

Bill Morice, MD, PhD. President and CEO of Mayo Clinic Laboratories (Rochester, Minn.): Over the next three years, we see the biggest opportunities to reduce expenses by improving operational efficiency, leveraging innovative tools, and prioritizing staff training and retention. We are improving efficiencies to use data-driven insights to make business decisions, which we believe will provide overall value and reduce expenses. Regarding adopting new tools, we are reimagining the possibilities offered by rapidly new tools and technologies to streamline processes and workflows.

By focusing our efforts on improving efficiency, embracing new tools and technologies, and retaining our staff through a variety of initiatives, we will achieve cost reductions. Most importantly, these business decisions are aligned with our vision to transform healthcare while putting the primary value, the needs of the patient come first, at the center of all we do.

Michael Stapleton. CEO of Thompson Health (Canandaigua, N.Y.): The biggest opportunity continues to be a reduction in outside agencies. We have had a 50% reduction so far this year and hope to be in single digits by the second quarter of 2024. Our agency costs have been over $6 million year to date.

The second opportunity is within our self-funded health insurance as we experienced a 20% increase year over year driven by numerous high-cost claims and biologics. Moving to biosimilars and continued focus on health wellness initiatives to drive down costs is a continued opportunity. The third is maximizing savings through our system GPO.

Madeline Camejo. Chief Pharmacy Officer and Vice President of Pharmacy Services at Baptist Health South Florida (Coral Gables): At Baptist Health one of our objectives we are working on is reducing pharmaceutical waste and expense. Through our pharmacy central distribution that we just opened in Nov. 2022, we have centralized pharmaceutical packaging to enhance operational efficiency, reduce costs, improve patient safety, and allow pharmacy staff to focus on delivering high-quality care and clinical services at our hospitals.

Eric Tritch. Vice President of Supply Chain at UChicago Medicine: We really try to frame things in terms of margin improvement versus just thinking about cost reduction. We’ve been challenged by inflationary impacts so the teams are playing a lot of defense in terms of challenging the cost of goods and an appropriate impact of raw material or labor increases. We then work with supplier partners on finding offsets, whether that is in driving revenue growth or cost reduction.

Desi Kotis. Chief Pharmacy Executive, University of California San Francisco Health System; Vice Dean, Clinical Affairs, University of California San Francisco School of Pharmacy: Overall for the pharmacy enterprise I would say our biggest opportunity for reducing expenses is making sure patients are being treated in the appropriate site of care. If they can be treated at home with self-administered medications or nurse-assisted infusions that would be patient satisfaction for sure. If traditional conditioning for hematology/oncology patients can occur on the outpatient infusion suite instead of the inpatient side, great. Moving some cell therapy patients to outpatients versus weeks in an inpatient setting will also be terrific for patients and their loved ones.

Holly Geyer, MD. Chair of Mayo Clinic Opioid Stewardship Program at Mayo Clinic (Rochester, Minn.): Time is money. The American healthcare system is bleeding due to the opioid epidemic. Every day, a jet airliner's worth of patients lose their lives due to opioids. In 2020, the US spent almost one-third of its national budget addressing the epidemic. Today, U.S. healthcare spends more than $35 billion annually addressing opioid issues and yet we can’t get ahead of the curve.

At Mayo Clinic, we’ll be reducing costs by investing in long-term solutions to ending the epidemic. This means funding a robust opioid stewardship program that ensures enhanced patient screening processes, standardized opioid prescribing at a department/procedural level, exploring and integrating our growing list of opioid alternatives for pain management, and comprehensively screening for and managing opioid use disorder. We’ll be sharing our successes and failures with the medical community as a whole and partnering with like-minded regulatory and healthcare collaborators to design sustainable solutions. Our roadmap will involve doing more for those with less and when the patient wins, we do too.

Ahsan Mahmood, MD. Chief Medical Officer of Parkview Behavioral Health (Fort Wayne, Ind.): The biggest opportunity lies in operative efficiency. The total cost of care per healthcare system requires an evaluation of the internal value chain segments. Optimization of personnel and enhancement of throughput execution, focusing on necessary services, in the right physical real estate, or virtual environment, is pivotal to reducing expenses.

In summary, the term focuses on value cognition. Being aware of each segment of administrative and clinical value, and removal of non-value-adding segments from the chain, is essential for the future cost of care bloat mitigation. Reliance and collecting meaningful data, and acting upon so, remains of urgent importance.

Tyler L. Hill, DO. Chief Medical Officer of Sierra Nevada Memorial Hospital (Grass Valley, Calif.): At Sierra Nevada Memorial Hospital, we are highly focused on reducing expenses for a number of reasons. Our main focus is to remain viable for the community in which we serve. Some specific opportunities we see to reduce expenses are surrounding physician labor. Any rural healthcare facility is challenged with physician recruiting. Because of those challenges, many service lines are staffed with locum tenens physicians. This is often a much more expensive method of physician staffing as compared to having locally employed physicians.

In addition to creative recruiting strategies, we started a rural family medicine residency this year. Our goal is to continue to expand the residency program and retain many of these residents upon graduation.

Staff engagement is another important area in which we are focused. This has a large impact on reducing turnover of employees. This translates into lower expenses related to traveling nurses and the onboarding of new staff.

We closely review the results of our employee engagement surveys. We are compared to other CommonSpirit hospitals and this further assists us with benchmarking ourselves. These results and individual comments allow us to focus our efforts as hospital leadership on improving our staff engagement. We also are continuously reviewing our productivity, overtime, and staffing models. This occurs on a daily basis and patient safety is at the core of our decisions.

Mara Nitu. Chief Medical Officer at Indiana University School of Medicine and Riley Hospital for Children, IU Health (Indianapolis): As published by multiple analysts, there are multiple ways to reduce waste in healthcare. However, the most impactful way will vary between organizations. In our organization, the biggest savings have resulted from improving efficiency. Maximizing resource utilization (space and workforce), led to the biggest savings. Several important projects: OR optimization, reducing the LOS, and reducing clinic whitespace have had a positive impact on the operating income, as well as on patient satisfaction.

Randy Rahman. CIO of United Health Services (Binghamton, N.Y.): Here are some of the opportunities that we are exploring and implementing:

  • Leverage technology to drive efficiencies across the health system
  • AI/ML Use: Providers, other clinicians workflow, revenue cycle, HIM, IT functions among the key areas
  • Automation/robotic process automation
  • Robot use to address hard-to-recruit positions like pharmacy tech, supply/meds delivery, etc.
  • Leverage technology/AI/virtual health to improve patient access and reduce the cost of patient registration, scheduling, and visits and promote remote patient monitoring and self-service.
  • Standardize, consolidate and maximize existing technology stacks
  • Eliminate/reduce legacy systems as appropriate
  • Embrace remote workforce, eliminate office space, or adopt hoteling workspace as much as possible
  • Reduce contract labor by investing in training/certification of existing staff
  • Reviewing existing contracts and renegotiating terms to reduce cost: annual increase reduction, license utilization adjustments, etc.
  • Invest in workforce to reduce staff turnover - improve staff engagement, experience, and culture

Joel Shaw, MD. Vice President of Clinical Affairs at OhioHealth Grant Medical Center (Columbus): At OhioHealth hospitals, we will continue to focus on our value analysis process and supply chain function to enable us to perform clinical due diligence around new clinical product requests, establish clinical product standards, and identify clinical utilization opportunities in continued partnership with our physicians and preferred vendors.

We will be focused on optimizing our care utilization and cost structure by improving the length of stay through multiple initiatives including the use of AI support, improving patient mobilization and active rehabilitative care in the hospital, continuing to develop programs that get patients to the right level of care at the right time, and improving connection and access to primary care and ambulatory specialty care to limit ED visits and hospitalizations while improving the total patient experience.

We will also continue to optimize our work culture and associate experience, in order to continually improve associate retention and recruiting. The culture and associate experience, which is often referred to as OhioHealth’s "secret sauce," will continue to build a model associate and patient experience that is the foundation of the quality, service, culture, and financial stability of OhioHealth.

Paul Coyne. Senior Vice President and Chief Nurse Executive of HSS | Hospital for Special Surgery (New York City): Efficiency brought forth through collaboration between clinical and non-clinical leadership. At every organization, across all industries, there are people primarily focused on expenses, and there are people focused primarily on operations due to the nature of their roles. In healthcare, this bifurcation can sometimes even be more apparent. Not only must each health system seek to reduce silos of organizational structure, but more importantly, reduce silos of thought. Only when each and every individual views it as their personal objective to ensure their organization achieves clinical, operational, and financial excellence can everyone work together to collectively reduce expenses in an optimal way.

Vi-Anne Antrum. Senior Vice President and Chief Nursing Officer of Cone Health (Greensboro, N.C.): Cone Health’s biggest opportunities for reducing expenses over the next three years lie in a few big buckets. The first bucket is health equity and value-based care models. Focusing on enhancing access in our outpatient primary and specialty care clinics, will create a direct reduction in more costly ED, urgent care, and hospital visits. From a bottom-line perspective, this directly reduces our expense load in the highest-cost settings while improving life outcomes in our most marginalized populations.

The second bucket will be in labor expenses. This will occur through continued innovation in care delivery models, automation of work that does not add value or joy to our teammates, and ongoing efforts to reduce contract labor and incentive pay across all areas. Part of this expense reduction affords Cone Health the opportunity to invest heavily in the growth of our team to take on new skills, compensate for expanded scopes that stretch new growth development and succession planning opportunities, and partner with community agencies to co-create win-win partnerships that build our bench. A wonderful side effect of taking this approach is the ability to retain the tremendous talent we have within our organization!

The third bucket is supplies and pharmaceuticals. We are partnering with our clinicians and supply chain colleagues on high-dollar items and low-dollar items alike to see where taking a different stand can result in improved clinical care by reducing variation, leveraging our GPO contract, working with our vendors on possibilities, and enhancing efficiency and mental bandwidth for our team members. This will require collaboration and partnership to realize all the benefits to our system.

Cone Health has a great culture that will accelerate our ability to drive outcomes and deliver results for the many communities we are so privileged to serve!

Stephen DelRossi, Interim CEO and CFO of Northern Inyo Healthcare District (Bishop, Calif.): Northern Inyo Healthcare District has been reducing expenses over the last year through a variety of mechanisms, and we will continue to work on our strategies. As salaries, wages, and benefits are our highest cost items, relative SWB reduction has to be at the forefront of our strategy.

Over the last year, we have reduced the average cost per adjusted patient day by $468 – we expect to continue that downward trend over time. Also, we have lowered all other expenses per adjusted patient day by renegotiating contracts, changing vendors, and controlling inventory; we will continue these focus areas over the time horizon when contracts expire or we reopen contracts.

The most important item in reducing our cost profile is to increase our revenue – we have added new service lines and expanded historic service lines; our year-over-year growth ending September 30, 2023, was 14.3%. As a critical access hospital, our minimum staffing levels can exceed industry averages, thus cost-cutting must be coupled with growth.

Kenneth W. Altman, MD, PhD. Chair of Department of Otolaryngology, Head and Neck Surgery, Professor at Geisinger (Danville, Pa.): Reducing expenses has a yin-yang relationship intricately tied to increasing productivity, quality, outcomes, and improving access. With this in mind, reducing expenses per unit of work (value) brings different opportunities. Coalescence of multiple health systems regionally or nationally can take advantage of economies of scale, optimization of procedures and operational effectiveness, and offer a consistent product to a broader population.

Rather than reactive management leading to costly workarounds, the other great opportunity is to proactively invest in our vision of success. With computing power doubling every year and a half, we’re at a crossroads where we can truly employ clinical pathways integrated into the EHR in real-time to deliver the most effective best practice. We know our community and patients better through investing in population health research. Business analytics is also benefiting from new computing power, which may result in shifts in our administrative workforce. While the future will surely be different in three years, it’s up to us to sculpt and enact a vision that values patient care as our top priority.

Scott Jessie, MSN, RN. CNO of SUNY Upstate University Hospital (Syracuse, N.Y.): Healthcare continues to recover from the impact of the pandemic, inflation, staffing crisis, and market pressures. Over the next three years, we will continue to focus on improving our financial performance and returning to positive margins to support our mission.

Reducing labor costs by reducing reliance on travel and temporary staffing, while continuing to focus on improving recruitment and retention, will have a major impact on improving the financial outlook. We won’t completely eliminate the need, but we aim to reduce the utilization.

Other key areas of focus will be preparing for the shift to value-based care, focusing on improved quality, managing LOS, optimizing the supply chain, negotiating improved rates from commercial insurers, using our technology to maximize efficiency in the EHR, and improving capacity, flow, and throughput.

Last, preparing for and strategically managing growth in ambulatory care and ASC volume, while managing minimal growth in inpatient acute care.

Ria Paul, MD. Clinical Associate Professor and Chief Medical Officer of Stanford Health Care Alliance; Executive Medical Director of Value Based Care Program and Associate Chief Quality Officer of Population Health and Ambulatory Quality at Stanford University School of Medicine (Calif.): As we are focusing on bending the cost curve our biggest opportunity is reducing unnecessary utilization. There are multiple areas of focus, one of them is having line of sight on patients across the care continuum 1) reducing low acuity avoidable emergency room visits and 2) reducing readmissions. Increasing access by providing alternative sites of care like urgent care to reduce emergency room visits. Effective post-discharge follow-up to avoid readmissions making sure medication reconciliation, and follow-up visit with the care team is integral. Also focusing on chronic disease management: diabetes, hypertension, and chronic kidney disease, to reduce downstream effects and cost from complications. Our strategy is to provide the right level of care at the right time and right place to counteract the various high-utilization areas and reduce the cost of care.

Jill Wiedemann-West. CEO of People Incorporated Mental Health Services (Eagan, Minn.): Our biggest opportunities for reducing expenses over the next three years are related to fully implementing and committing to integrated care pathways throughout our system. Because the individuals we serve are complex, committing to this philosophy of care will naturally reduce some of the churn that occurs with clients who have multiple barriers to wellness, thereby reducing atypical discharges and issues with authorizations while also improving client engagement and stability to enhance outcomes. Additionally, this service commitment will also serve to stabilize revenue and allow the organization to create the financial room and margin to continue to drive longer-term organizational efficiencies.

Michael Bublewicz, MD. Vice President and Chief Medical Officer of Emergency and Urgent Care Services at Memorial Hermann Health System (Houston): I see our most significant opportunities for reducing expenses over the next three years in several key areas. Firstly, our enterprise-wide transition from Cerner to Epic is anticipated to streamline processes, improve interoperability, and ultimately lead to significant cost savings. Secondly, persistent management of labor and contract expenses will remain crucial as we strive to balance cost-effectiveness with quality of care. Lastly, we are undertaking exciting work around improving our employees' healthcare utilization. By ensuring access to appropriate care levels, we expect to optimize costs while maintaining high standards of care for our team members.

Andrea Turner. COO of Zuckerberg San Francisco General Hospital: Unfortunately, while healthcare is known for healing and performing miraculous saves, we are also known for wasting. Over the next three years, ZSFG is focused on reducing our carbon footprint, standardizing more of the same services, and using our board-licensed professionals to the top of their licenses. With these efforts, we have engaged all leaders and frontline team members to analyze and draft their own countermeasures to achieve the target set by the organization. Validation of success is done annually, where the department leader presents their progress in our expanded executive committee meeting. The executive for that area rounds weekly in support of the advancement towards success.

Bharat Magu, MD. Chief Medical Officer of Yuma Regional Medical Center (Ariz.): The most significant potential for Yuma Regional to lower costs lies in refining the EMR and enterprise system and enhancing overall operational efficiency. To achieve this, we are initiating the "Epic Refuel Project." This project is set to conduct an extensive examination of the existing EMR framework and its connected processes, identifying and eliminating any that are unnecessary, ineffective, or that contribute to administrative strain. This endeavor will encompass a thorough evaluation across various domains, including clinical operations, financial management, revenue cycle, and support services. The systemwide optimization initiative will take 18-24 months to complete.

Aaron Hajart. Southern Region Senior Vice President for Service Line and Practice Integration at RWJBarnabas Health (West Orange, N.J.): We have a significant opportunity to reduce expenses by developing a single system strategy for palliative care services. By creating a more expansive palliative care program to address our inpatient needs as well as the development of a robust outpatient network would enable us to not only reduce cost, but would also reduce unnecessary admissions, improve utilization of hospice services, and offer our patients and their families a better experience, both inside and outside the hospital.

Shannon Odell, MSN, RN. Vice President and Chief Nursing Officer at Nicklaus Children’s Hospital (Miami): One of our biggest opportunities for reducing expenses is registered nurse retention, especially as it relates to reducing first-year turnover and the subsequent reduction of premium labor costs (overtime, incentive pay programs and contract labor). According to the 2023 Nursing Solutions, Inc. (NSI) report, the average turnover cost of a clinical nurse is $52,350, and each percent change in RN turnover results in an average of $380,600 additional cost or savings each year. At Nicklaus Children's, we saw a decrease in year-over-year turnover from 22.5% in 2021 to 16.1% in 2022 as a result of our workforce stabilization strategic focus. Our current turnover rate has ticked up a little bit to 16.3% (compared to 20% in Florida for 2023 per the FHA RN turnover data). The biggest increase we are seeing today is in our first-year RN turnover rate which is currently 16.3%, up from 10.9% in 2021 and 10.8% in 2022. This is inspiring us to explore strategies to increase retention of more first-year RNs.

Andy Anderson, MD. Chief Medical Officer and Chief Quality Officer of RWJBarnabas Health (West Orange, N.J.): As leaders, we are accountable for reducing the cost of healthcare. Our biggest opportunities in health systems come from accelerating integration and standardization of best practices across sites of service. By scaling best practices that are cost-effective, we ensure the highest value of care at every touch point. We also have the opportunity to reduce unnecessary spending in our hospitals (such as pharmaceuticals and laboratory services) and increase throughout, all of which will decrease the expense of providing healthcare.

Edith Okolo, PharmD. Director of Pharmacy at Cedar Crest Hospital (Belton, Texas): Drug costs quickly come to mind, with high rising drug costs and many shortages in the pipeline this will be our first line in cutting costs. First, we will aim at purchasing affordable generics whenever possible. Secondly, we utilize group buying rates or group purchasing organizations to get significantly reduced prices on medication and supplies as part of a health system. Third, we will monitor fast and slow movers closely in the hospital to ensure we are not stocking medication that will sit on the shelf and expire due to decreased utilization.

Invest in our staff by taking care of them, so that their productivity is high, and they are not calling in sick. Do everything reasonable to keep job satisfaction high so they do not quit which in turn will reduce turnover rate, thereby keeping down expenses involved in hiring and training new employees. Cut down on overtime and unexcused absences.
Finally, leverage technology within the health system especially in the patient care areas to reduce manpower by automation of certain tasks.

Annie Thomas-Landrum, MSN, RN. Board of Directors of Sunshine Community Health Center (Talkeetna, Alaska): Over the next three years, I believe retaining the right staff and promoting positive attrition with those whom we are not well-matched with is the biggest opportunity we have to reduce costs. In times of staffing challenges, I think it can be natural and easy to focus on retaining all staff, regardless of the fitness of the match. However, when we become laser-focused on the need to retain, we often miss the cost of that retention. It might be in mistakes consistently made with patient care; it might be in documentation that does not allow us to reliably retain accreditation and show due diligence in cases of litigation; it might be in incidences of various types of workplace theft. However, these types of direct consequences are often only the tip of the iceberg.

When an employee is not a great fit for our organization, and we are not a good fit for them, it has a secondary and tertiary cost as well. Leadership hours are spent in trying to coach skills that never sustain improvement, team attitudes that develop when toxic negativity takes center stage, clients and patients who decide to seek care elsewhere, or worse, not at all. These are all secondary risks when employees should be coached out but remain. Beyond this, we also see tertiary consequences, with a loss of team efficiency as morale and cohesion erode, loss of creative thinking, loss of motivation and drive to create new partnerships, and the inability to use resources in sustainable and thoughtful ways. Sadly, this type of environment tends to bring out the worst in our teams as a whole, creating the need for more coaching with less and less chances for a positive result.

It can be hard to embrace the idea that we will benefit from a staff reduction when the toughest questions we face are related to a lack of stable staffing. However, I believe and have seen over and over again the power of embracing the reality of each employee relationship and prioritizing and fiercely fighting for the culture we as a team believe in, despite the fear.

Holly Muller, DNP, RN. Chief Nursing Officer of Presbyterian Delivery System (Albuquerque, N.M.): At At Presbyterian, there are a few opportunities that we foresee will help us to reduce expenses over the next few years, including:

1) Launching a gig-workforce app that connects us with local nurses who can fill scheduling gaps, reducing our dependence on traveler contracts while still providing quality, safe and accessible care for patients and members.
2) Utilizing AI technology to limit redundancy in work processes for caregivers and reduce the length of stay in our facilities.
3) Elevating the EHR charting process by improving its interoperability with clinical equipment and eliminating redundant processes for our caregivers.
4) Continuing to decrease the cost of care by increasing access to our hospital at home and skilled nursing facility programs.

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