As integration heated up in Sonoma County, Calif., St. Joseph Health realized it had to get leaner and more organized. One of the ways the health system did that was to clean up its purchased services.
Purchased services can drain a lot of money and time from an organization because it is so diverse, said David Rodriguez, vice president of marketing and solutions management of MD Buyline and Laurie Clayton, regional director of contracts at St. Joseph’s during the Healthcare Financial Management Administration’s annual ANI conference on Tuesday.
There is often a lack of infrastructure to control and manage contracts; little or no benchmarking is available; lack of broad expertise; and decentralized decision making and purchasing. However, cleaning up the disorder can mean substantial savings for organizations, the presenters said.
St. Joseph’s instituted a value analysis plan to bring its purchased services in line. The health system’s approach consists of four elements:
Assess: Categorize purchased services, prioritize projects and create a dashboard for decision making. Review: Use the dashboard to look at the statistics then find opportunities and make recommendations. Clinical fee-for-procedure services are prime for savings. Also look for contracts with high-dollar spends and use competition as a contract negotiating tool. Finalize: Create customized request for proposals and put in place definitions of what purchased services encompasses. Measure. Track the results.Putting this process in place saved St. Joseph’s multiple millions of dollars, Clayton said, but it was a lot of work and finding staff with the appropriate qualifications is a challenge.
Clayton offered some tips to others who may want to establish a similar program. Those include:
Get executive buy-in Implement tools to enhance productivity and track Centralize so that all agreements go through the contracting and purchased services department.