3 Ways to Safeguard That You’re Not Losing Your Hard-Earned Savings Dollars in any Given Year

Every supply chain professional loses sleep over where to find more price, standardization, and utilization savings for their healthcare organization’s survival. Yet, what these same individuals don’t realize is that there are hundreds of thousands or even millions of reported savings dollars that are being lost annually because of changes in policies, procedures and personnel.  This reminds me of a VP of supply chain telling me how he was embarrassed when he was called into his CFO office to explain why his new I.V. set contract savings of 17% wasn’t being reflected in his financial statements.  Only to discover, to his amazement, that his nursing staff was utilizing higher-end I.V. sets vs. basic sets as they had in his prior contract.  This is why a savings, isn’t a savings until it is verified!

 

This scenario poses the following questions. How much longer can we project price, standardization, and utilization savings that never happen?  How much longer will our bosses accept this fuzzy math?  And when will we be “called-out” for the inaccuracies in our savings reports?  It is my contention that the moment of truth has arrived.  We must, as an industry, get our savings projects right the first time, so our CFOs can actually budget our savings projections in any given year.  To ensure that this unparalleled accuracy happens, here are three ways to safeguard that you’re not losing your hard-earned savings dollars in any given year:

 

  1. Audit your saving projections on a quarterly basis. To safeguard that your savings is really happening as planned, schedule an audit every three months to make sure it is on target. If not, make the necessary mid-course corrections.

 

  1. Adjust your savings reports as your situation changes. If you find that you original savings projections were inaccurate after your audits. Make sure to fine-tune your next savings reports to reflect any change in your actual savings.

 

  1. Trust, but verify all of your vendors guaranteed savings. We rarely audit a vendor’s savings that is reported on our savings report because it is planned. But just because it is planned or from our GPO does not deny the fact that results/things change, and people change. Therefore, never accept a vendor’s savings report as your own.

 

Verifying your savings numbers should be a best practice in your vendor and value analysis compliance policies and procedures, since, as I said, a savings isn’t a savings until it is verified. If you would like more information on this important topic, just e-mail me (bobpres@svahsolutions.com) for your FREE copy of our new e-book, “The Ultimate Closed-Loop Savings Validator Guidebook”.   It could answer all your questions!

 

 

 

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