If you only have one or two savings strategies (e.g., price and standardization) left in your reserves, then it’s time to rethink your savings strategies before these stratagems evaporate right before your eyes. It could be any day now!
More to the Point
More to the point, what will you do when these two savings sources are all gone? We often asked this same question to participants in our seminars and workshops, and here are some of their answers:
- I will go find another job in another industry.
- I will beat on my suppliers even harder for discounts.
- I will join a few more GPOs to eke out some savings.
Do these answers seem like new savings strategies to you or are they delaying tactics that will only hold back the inevitable for a few more months?
Savings Triangle to the Rescue
We have often talked about the “Savings Triangle” (i.e., price, standardization, and utilization) as being the ideal savings solution for supply chain managers that will plug all the holes in your healthcare organization’s expense budget. No other healthcare supply chain strategy can make this claim!
The “Savings Triangle” is the comprehensive savings strategy that your healthcare organization is looking to you for as opposed to excuses, justifications, or explanations on why savings are not happening.
Time Is Not on Your Side
From time to time, we hear from supply chain managers that they are first focusing on some operational area of their hospital’s supply expenses, such as their operating room, before they plan to get around to concentrating on utilization management. Hello! Most of a hospital, system, or IDN’s supply expense savings are in their utilization misalignments (wasteful and inefficient consumption, misuse, misapplication, or value mismatches) not price or standardization, so why ignore this fact?
Remember, time isn’t on your side. You need to save every dollar that is available to you to help your healthcare organization stay afloat. Waiting for the right time, place, or circumstance will not make things better – only worse.