Becker's Hospital Review

20 CFO / FINANCE 5 healthcare leaders reveal simple changes that saved money By Kelly Gooch H ospitals and health systems are consistently monitoring costs, especially amid today's industry trends and changing reimbursement environment. Becker's Hospital Review asked healthcare leaders to name a relatively simple change they made that saved money in the last year. eir responses are below, presented alphabetically. Editor's note: e following responses were lightly edited for length and clarity. omas A. Biga, president of the RWJBarnabas Health Hospital Division (West Orange, N.J.) In the recent past, we moved our management team from a paid time off model, where hours were accrued and carried over up to a year's worth of PTO, to the honor system for time off. e issue with the old PTO model was that when people le, they took the bank of PTO with them, and that proved to be very costly. In addition, as raises were given, the entire value of the PTO bank would be increased by the percentage of the salary increase. e management team now op- erates under an honor system, where there are no hours of time accu- mulated. Rather, days off are just recorded for monitoring purposes, but no definitive grant of hours/days off is set. e expectation is one will get their job done, and done well, while at the same time taking time off at their discretion. Robert Gardner, CEO of Banner Ironwood Medical Center (Queen Creek, Ariz.) and Banner Goldfield Medical Center (Apache Junc- tion, Ariz.) I am a firm believer that small and simple changes can have a pro- found impact, for better or for worse. When it comes to cost-saving initiatives, the same principle holds true. Our organization realized sizable savings by converting the majority of our culinary dollar spend from brand-name products to generic versions with compa- rable quality. Each line item of change, when measured individually, was nominal and even borderline insignificant. However, the com- pounding effect of hundreds of similar-sized small and simple chang- es yielded a profound financial impact for the system. Mike Marquardt, CFO of UVA Medical Center (Charlottesville, Va.) Reconciliation of contracts and technology platforms across health system entities. is includes consolidating duplicative, redundant or similar contracts, as well as eliminating one-off vendors/services that could be provided by the enterprise electronic medical record or enterprise resource planning system. Seung Park, MD, senior vice president and chief health informa- tion officer at Indiana University Health (Indianapolis) Traditionally, our EMR build of drugs had listed the entirety of phar- macopoeia in all settings — whether or not the drug was actually on the shelf, in our formulary, or even whether it was still on the mar- ket. is caused large-scale costs in nonformulary drugs and delays in treatment when nonavailable drugs were ordered but could not be sourced. We turned off all nonformulary and nonavailable drugs from order in the inpatient arena and saw costs associated with non- formulary drugs drop by an order of magnitude within two months. Dave Williams, MD, president and CEO of UnityPoint Clinic and UnityPoint at Home (West Des Moines, Iowa) In 2019, our Laboratory Clinical Service Group prioritized thinking like a system, which included standardizing the vendors we were us- ing, looking at how we could keep tests in the system, and identifying a primary reference lab. On paper, it might seem fairly straightfor- ward, but coordinating between facilities across a three-state area took some elbow grease. It was a team effort, and we got it done, accomplishing an estimated net annualized savings of more than $7.3 million. It's these kinds of transformations, which are designed around our patients, team members and communities, that help us move health care in a sustainable, aligned direction. n Humana, PE firm bet $600M on Medicare clinics: 5 things to know By Morgan Haefner H umana and private equity firm Welsh, Carson, Anderson & Stowe entered into a joint venture agreement to expand Humana's primary care centers, the organizations said Feb. 3. Five things to know: 1. Under the joint venture, Humana's Partners in Prima- ry Care division and WCAS will develop and operate primary care centers for Medicare Advantage patients. Partners in Primary Care will manage the care centers, which will accept payment from other health insurers. 2. The organizations are investing about $600 million in the joint venture. WCAS will have majority owner- ship in the joint venture, and Humana will have a small minority stake. 3. The joint venture will likely more than double Partners in Primary Care's 47 Medicare care centers during the next three years. The current centers are in Kansas, Mis- souri, North Carolina, South Carolina, Texas and Florida. 4. Under the agreement, Partners in Primary Care will get a management fee, including performance-based incentives, for managing the centers. 5. Notably, the deal is not part of Humana's other pri- mary care clinic company, called Conviva, which oper- ates 104 primary care clinics. This also isn't Humana's first deal with WCAS. In 2018, Humana, TPG Capital and WCAS collaborated to acquire post-acute and hospice companies. n

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