Did you know new or increased use of medical technology contributes 40-50% of annual healthcare cost increases?
It’s no surprise that factoring in healthcare technology to your cost management strategy is crucial.
But without automation, new product growth and technology inflation are difficult to measure consistently. Your organization reviews and processes new items and technologies daily. But rarely are you able to control their impact.
So what can you do?
Here are 3 ways to control product mix and technology inflation:
1. Measure the impact
Consumed with basic procure-to-pay process and metrics? It’s time to shift focus to the specific metrics influencing technology inflation. Reviewing overall trends in pricing, volume and product mix can uncover what’s impacting cost.
With that focus, you can drive real savings across the entire hospital system.
2. Realign focus
What if I told you the highest rate of supply chain spend growth isn’t price increases?
It’s the volume growth of new products and costs of implementing new technology.
Shift your focus from price benchmarks, negotiations and price improvement opportunities to holistic cost reduction and quality improvement. This focus will support costs while still providing quality care and outcomes.
3. Engage with service line leadership
Implementing new technology can increase costs. But can also result in a net positive if the new device or supply improves overall care and quality metrics (such as length of stay, mortality, complications and readmissions).
However, the measurement of true patient outcomes is difficult to collect, standardize and take action on. And the benefits of new technology can only be measured after a patient leaves the acute care setting.
Progressive healthcare organizations are now looking holistically at service line management (particularly where supply chain plays a critical role).
It’s important to incorporate robust supply chain analytics AND focus on processes and culture. In doing so, you can manage overall technology cost increases while meeting the needs of your patients and community.