Strategy for managing purchased services

Purchased services spend represents as much as 20% to 25%1 of a hospital’s total expenses, but savings opportunities are not always easy to identify. Strategic, analytic and organizational challenges all add speedbumps to streamlining the contracting process and opportunities often remain untapped.

 

To start, focus on these four key strategies:

Spend visibility: view all spend and utilization
Providers can start by compiling contract and accounts payable data from across the organization to assemble a total spend dashboard.

Competitive contracting: identify opportunities to consolidate or renegotiate
Identifying potential savings and vendor consolidation opportunities is a small big step toward managing spend and centralizing negotiation leverage.

Expertise across categories: demonstrate deep expertise across portfolio
With significant savings potentially on the table, many hospitals work with outside experts that assist internal teams—a solution for quickly gaining expertise and resources.

Resource and change management: lead across departments for high-impact improvements
Change management first requires executive sponsorship and engagement.

 
1Vizient Savings Actualyzer® data

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