Today’s value-based care models emphasize the importance of delivering high-quality care at a reasonable cost, rather than paying for treatment based solely on the volume of services provided. By measuring and managing the total cost of care, healthcare organizations can work toward achieving more sustainable healthcare spending and improving health outcomes for patient populations.
Many factors contribute to the total cost of care. But here’s what’s sometimes overlooked: Improving the efficiency of procurement processes can play a significant role in cutting costs.
When assessing procurement efficiency, healthcare organizations must consider not just big-ticket purchases, such as capital equipment or expensive medical device disposables, but also smaller, high-volume purchases, from bandages to office supplies. By getting the best possible prices for all supply purchases, healthcare providers can better manage their costs.
With healthcare organizations continuing to grow and mergers or acquisitions up this past year (18 mergers or acquisitions in Q3 2023), they can lose control of smaller purchases if each facility buys supplies directly in its own way. By centralizing, simplifying and tracking purchasing, the entire organization can benefit from volume discounts and more efficient procurement processes.
Total Cost of Care
Healthcare organizations must calculate the total cost of care to better understand all of the components that drive healthcare costs. This helps them to implement strategies to reduce expenses while maintaining or enhancing the quality of services.
Understanding the total cost of care requires organizations to consider various types of products and services that impact healthcare expenses, including direct medical costs and indirect costs associated with managing health conditions.
Among those expenses are healthcare services spending, including doctor visits and hospital stays; pharmacy costs; care management and…
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