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9 Simple Ways Your Medical/Surgical Facility Can Reclaim Thousands of Dollars in Lost Savings. Part 1 of 9

patient getting a ct scan

Plugging the Leaks in Your Spending Bucket > Outpatient Surgery Magazine > May, 2013

During my 25 years working on materials management for medical and surgical facilities, every facility I ever dealt with had significant leaks in its spending “bucket” for supplies and services. These leaks routinely amount to tens of thousands of dollars in lost savings that the owners and operators aren’t even aware of.

To find more spending leaks, you have to be willing to make a thorough assessment of operations, as you will see in the following 9 items, which illustrate some commonly undetected leaks. Each item is followed by an example of savings realized by a specific client of ours after we’d identified and plugged up the leak.

Pay attention to each example of savings, because at the end, I’m going to add them all up, and the total will be impressive. Although some of these leaks may not apply to you, I’m willing to wager that many of them still exist at your facility and still need to be plugged up.

Plugging the Leaks in Your Spending Bucket > Outpatient Surgery Magazine > May, 2013

1. Ignoring offers in your GPO (Group Purchasing Organization) contract
One common mistake is not taking advantage of all money-saving opportunities in contracts with group purchasing organizations or in local contracts negotiated directly with manufacturers.

Linking to GPO contracts is one of the least disruptive changes you can make. You don’t have to switch vendors or products. But surgical facilities often fail to realize these savings because they don’t have a clear idea of how GPOs work. A GPO membership functions a lot like an AAA membership, in that you have to take advantage of special deals. They don’t automatically come to you.

Through your GPO membership, you can get discounts for supplies and services you may not even know were available. In addition to medical and surgical supplies, items include laboratory, merchant processing, imaging, construction, cell phone service, office supplies, janitorial supplies, and the list goes on. But you have to take the initiative and follow up on these deals. This requires hard work and diligence.

In addition, GPO members must continually update their GPO-based contracts with vendors. The typical contract between a GPO and a vendor expires in 3 years. If you do not keep up with expiration dates, you will be in for some nasty surprises. For instance, you get your distributor rep to link you to a great GPO discount, but the discount expires the next month and all those great savings evaporate. GPOs rarely alert you when contracts are about to expire, so you need to proactively monitor expirations. The burden of GPO utilization falls on you and your staff.

Example of savings: You can lower your medical and surgical supply spending by as much as 30% by linking your vendors to GPO contracts. For example, a surgery center Client saved more than $140,000 per year by linking to available contracts. Our Clients are thrilled with this strategy since they can reduce costs without changing vendors or products.

If you are a medical/surgical facility that spends over 250K a year in supplies and expenses, click here to see how we can save you 50K-500K annually with our NO COST to you 30 minute online assessment!

Barry Denny – CEO of Expense Management Network