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Process Improvement: Taking Advantage of Economies of Scale in Hospital Systems| HMC’s Idea to Action Plan ConsultingTM service helps hospital department managers whose functions are not high-cost generate ideas for savings potential. | | The senior leadership team at a three-facility hospital system in MA established management team stretch goals based upon HMC’s Functional Cost ReviewTM data. Managers were asked to develop individual or team-based Action Plans, which focused on reducing their current HMC BenchmarksTM budgeted cost position. Each Manager was given the same per unit reduction goal to achieve, regardless of whether or not the function that they had responsibility for showed cited cost excess.
Several Managers of already lower-cost functions were struggling with generating ideas around achieving additional cost savings and felt stuck in moving forward with their Action Plan development. To help close this gap, the hospital system purchased HMC’s Idea to Action Plan ConsultingTM service to help these Managers generate ideas around areas of savings potential. HMC Consultants came onsite to engage these managers into thinking more critically about their benchmarking data and to help them identify potential pathways to improvement. Using HMC’s Functional Cost ReviewTM, in conjunction with HMC Idea TreesTM, HMC Consultants were able to help focus the managers around the opportunities for improvement that existed within their own walls.
OBGYN Nursing Services at the three facilities was $600K below target in cited cost savings. Initial discussions centered around the difficulty of changing staffing patterns due to minimum staffing levels established by state mandated ratios and requirements. However, a more in-depth analysis using HMC BenchmarksTM revealed that one of the larger system facilities uses an LPN supported model of care, whereas the other larger system facility does not. In fact, the former facility uses about 5,000 more RN hours and about 13,000 LPN hours, totaling about 17,000 more hours to cover 7% less patient volume than the latter facility. The OBGYN Nursing Services team will create an action Plan to investigate replicating the non-LPN supported model of care at the higher cost facility, targeting between $250K - $500K in savings.
HMC’s benchmarking tools can help support your learning from the best internal model within your system, even when it appears that there is no room to improve costs. Think about how you could prompt this kind of idea generation at your own facility and capitalize on your own economies of scale.
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