Many hospitals and health systems are facing unprecedented losses in revenue. Addressing these severe margin pressures requires re-examining how to sustainably reduce expenses. Mike Machulsky, Executive Vice President, Strategic Partnerships at Pixel Health, shared his thoughts on navigating and implementing cost optimization strategies in today’s healthcare market.
Understanding hospitals’ financial situation
“Saving money right now is top of mind for most healthcare leaders,” said Mike. “In the recent conferences we’ve attended, we’ve heard—and validated—that more than 70% of health systems or hospitals are in the red in their current fiscal cycle.”
“While some healthcare organizations may be losing up to 10% their top line revenue, they still must focus and balance Quadruple Aim goals while delivering care in a multitude of ways. IT and digital leaders: reducing costs while improving population health, patient experience, and the well-being of healthcare providers.”
Applying cost optimization to reduce costs and improve patient access
“Cost optimization in healthcare organizations can be explored from multiple angles,” explained Mike. “And when it’s done right, it can lead to better patient throughput, leading to better efficiency and better resource utilization. It can also help healthcare providers see more patients and help patients get connected to the services they need in an more optimized way.”
Mike shared his integrated approach to cost optimization, which includes:
Starting with spend analysis
“To identify opportunities for costs savings, we start by helping an organization’s chief information officer understand their current IT spend patterns,” said Mike. “With an analytical platform, we can evaluate an organization’s financial information and identify hidden or “shadow” spending. We can also identify superfluous spend from lack of proper integration and assimilation from previous M&A transactions. Leveraging this data, we’re equipped to eliminate redundancies in the supply chain, connect siloed teams and cost centers, consolidate service providers and manufacturers, and create right-size enterprise, or bulk, purchasing agreements with suppliers.”
Evaluating patient access
“With a well-designed digital front door and patient access strategy, healthcare organizations can accelerate the conversion of a consumer to a patient quicker. They can also help an existing patient connect with their clinician or the care team more efficiently to get the answers and care they need. Compressing this digital communication chain is a proven method to help reduce costs and increase patient and clinician satisfaction,” he said.
Outsourcing technology services
“We have helped many hospitals and healthcare organizations drive operational efficiency in one to two years by outsourcing their service desk and field serviced to a proven provider (in many cases to Pixel Health) rather than using their internal headcount. Healthcare is in the business of providing healthcare, not IT services. Enlightened leaders understand this and look for opportunities to work with trusted partners to provide their ‘IT services backbone’ to fully support their overall strategic initiatives and hybrid care delivery,” explained Mike.
Managing telecom expenses
“In our experience, many companies think they are managing their telecom expenses. They are often unaware that a thorough audits of all telecom and mobility bills and contracts can help identify inefficiencies and control expenses. Our telecom expense management efforts have helped save companies millions of dollars year after year. This is a further, deeper example of our capabilities in the spend analysis arena,” said Mike.
“Beyond telecom expense management, hospitals and health systems can also upgrade and modernize their capabilities by bundling their systems, such as mobile device management with wireless communications systems,” he explained. For example, health systems can leverage carriers to couple 5G over a licensed spectrum with devices to provide seamless secure connectivity, anywhere within the institution. By creating a health system that is run on secure and superior wireless technology, clinicians can access real-time medial data quickly, spend less time on administrative tasks allowing for more time with patients, leading to better outcomes.
By looking at cost optimization with a holistic lens, we believe our strategies can make a real difference in our industry’s ongoing pursuit to reduce healthcare costs. Get in touch to connect with our team at Pixel Health to learn more.