In the current world of health care, most provider organizations are undertaking significant cost management efforts. Health care providers need to deliver care more cost effectively while improving value. We are no exception.
At University Hospitals we call it “Value Improvement Program” (VIP). At the University of Michigan Health System, we called it “Value and Margin Improvement” (VMI). I don’t remember what we called it at Brigham and Women’s Hospital, but it was similar.
Often it starts with the use of outside consultants. They identify the overall opportunity at a high level using the organization’s cost data and industry benchmarks. In some cases, consultants stay on and help staff the teams. In other cases, the organization staffs the teams internally to do a deeper dive, find the specific opportunities, and implement.
Depending on an organization’s executive leadership, culture, management and staff buy-in and their approach to system wide initiatives, results can vary greatly.
I was blown away last week at our VIP oversight meeting. It was standing room only for the core oversight group and all the teams reporting out. It was not secret or closed. There is a very tight agenda with a standard format as each team reports status monthly. Several teams presented their detailed opportunities after just 5 short weeks of working together. I heard encouragement and support from the oversight group, not pushback or questioning the feasibility. This all speaks positively to the culture and executive leadership at UH.
We have a focused team of IT leaders looking at opportunities for cost reductions that include infrastructure, application rationalization and contract management. They have done a terrific job of identifying a range of opportunities in that same short five-week timeframe and we reported out this week. Examples include decommissioning software, consolidating contracts, and changes to maintenance. These opportunities will take some time to implement in the next few years but they are doable.
All the VIP teams have an opportunity to learn from one another at monthly integration meetings that include all the executive sponsors and team leads. Each team has support persons assigned from the Finance, IT, and Operational Effectiveness departments. So for IT, we’re not only focusing on our own opportunities but assisting all the teams who are looking at technology enablers to help reduce costs in their areas.
As consumers, we know health care costs are rising. As health care workers, we know the pace is not slowing down and we are asked to do more all the time. The idea of cost cutting can be met with skepticism, negativity and resistance.
But if we think about how to eliminate waste and how to deliver services more efficiently at lower costs, we can identify and embrace those ideas and opportunities. That’s exactly what my IT leadership team and teams across the system are tasked with doing. And so far, we are finding a lot of opportunities.