Every industry experiences tough economic times, and the medical field is no exception. Leading health systems now face not only competition from other players in their sector, but also from a changing medical landscape.
Since the economy has gone through the pandemic and is facing a potential recession, budgeting and cost management is a top priority. The question here is, what can leading health systems do to manage their costs?
They can do this by improving the efficiency of their supply chain and by adopting early into the population health management movement. For more insights into these strategies, continue reading to learn more.
Related: Emerging Technology in Health Care: 10 Innovations That Are Changing the Industry
Cost Management Strategies
In the post-COVID era, leading health systems are forced to look at cost management strategies to help them stay competitive in a rapidly changing industry.
While there are many areas they can look into, we’re going to focus on two key areas that will require paradigm shifts in how they operate:
1. Supply Chain
According to McKinsey, the supply chain function manages around 40% of a health system’s total costs and most of its external spending. Therefore, a high-performing supply chain is critical to helping health systems manage costs.
There are three areas that healthy systems need to focus on to become high-performing entities:
Data and Analytics
Perhaps the most crucial step a health care system can undertake to help streamline its supply chain is investing in improving its data, analytics, and talents. Investing in vendors and platforms that can provide access to data at a granular level is vital for giving visibility to many layers down the supply chain.
In addition, these partners and platforms should be able to provide transparent and frequent reporting of every step in the supply chain, from ordering to delivery and distribution. Finally, it’s also essential to invest in hiring trained talents and focus on data and analytics, not just medical.
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Goal Setting Across the Health System
It’s common for health systems to implement annual goals for their supply chains to improve efficiency.
However, many times this goal-setting process is siloed. It can be hindered by internal resistance to supply chain initiatives that focus more on cost-saving methods, instead of organizational goals.
Sharing and setting goals across the system and providing incentives to reach those targets help get different parts of the organization on the same page, working as a team.
Engaging With Clinicians
Strong cooperation between frontline clinicians and management is a constant in high-performing health system supply chains. Clinicians can provide valuable input on the selection of suppliers, compliance with the terms of contracts, and the management of the supplied goods.
By putting together cross-functional teams and getting sponsorship from senior clinical leaders, it can help improve performances, build support in supply chain efforts, and add accountabilities throughout the organization.
Related: Pushing the Boundaries of Virtual Care
2. Population Health Management (PHM)
According to the American Hospital Association (AHA), population health management is:
“the process of improving clinical health outcomes of a defined group of individuals through improved care coordination and patient engagement supported by appropriate financial and care models.”
The International Hospital Association (IHI) breaks PHM into the “Triple Aim” for populations that play various roles, such as:
- Improving patient care and their overall experience
- Improving the health of the population
- Reducing the per capita costs of healthcare
Leading health systems are committed to both PHM and the Triple Aim. However, there are some challenges that they face during the implementation process.
One of the significant parts of the shift to PHM is having more efficient outpatient services. However, it’s important to remember that one-third of the triple aim is improving patient care and overall experience.
Platforms like Clearstep’s Smartcare Routing™ use AI chatbots to help increase access and enhance the patient experience from diagnosis to follow-ups.
They can also help health systems be more efficient with their staff and facilities, as well as help relieve some of the administrative burdens.
Improved Health Care Information Technology and Sharing Data
For PHM to work, health care systems must be able to share patient data securely and efficiently between providers, facilities, patients, and payers. This patient information must be made available so that the appropriate clinical decisions can be made about the patient at the proper time.
In addition, health care systems must also begin looking at big data applications and solutions to start evaluating populations and how to best provide both acute and chronic care inside those populations to help ensure equitable care.
Moving Away From Fee For Service to Value-Based Healthcare
While the transition from fee-for-service to value or merit-based healthcare is already underway, it takes time to implement. For example, the Medicare systems used by merit-based incentive payment systems (MIPS) and the Comprehensive Primary Care Plus Model (CPC+) are currently being tested to see their impact on population health.
Ultimately, health care systems will be forced to run more efficiently to compete in their markets as consumers will have price transparency and merit-based programs to help guide them in choosing a provider.
Do you want to know how Clearstep’s Smart Care Routing™ helps increase patient satisfaction and retention? Click here to learn more about our patient-centric approach!
Health Systems Need to Manage Their Costs to Remain Competitive
The medical industry is changing, and health systems that aren’t adapting might find it challenging to catch up with their competitors.
An excellent strategy to stay ahead of the game is to manage costs by making their supply chain more modern and efficient. Unfortunately, one of the main challenges health systems have faced is that they are siloed as organizations, making it tough to optimize costs and efficiencies across their organization from top to bottom.
By involving clinicians in the process, updating their data and analytics, and goal setting across the organization, health systems can have a much more efficient, cost-effective supply chain.
Population health management evolves from a much-wanted philosophy to a reality every year. By preparing now for the shift to value-based healthcare as part of population health management, health systems can gain a competitive advantage over other latecomers in the industry.
Health systems will need to shift their focus on providing better patient care as well as being more efficient with their facilities and staff. As a result, AI Chatbot technologies will become commonplace as health systems provide better access and patient experience.
By streamlining and making their supply chains more efficient and shifting to a population health management mindset, health systems can take tremendous steps to manage their costs.
Related: How AI Chat Increases Health Systems’ Clinical Capacity and Builds Brand Loyalty
