OC Reilly Blog: Available Efficiencies More Important as Hospitals Face New Costs

By Paul Eberhardt, Supply Chain Consultant, OC Reilly Inc.


As though anyone needed a reminder of this fact, the world of health care finances continues to experience churn, change, and a seemingly incurable state of unpredictability and uncertainty.

The most recent example came to light in late August, as groups representing the hospital industry began lobbying the Centers for Medicare and Medicaid Services, hoping for a revision to an amendment to the federal Patient Protection and Affordable Care Act (ACA).

This amendment, as explained in a recent article in the Pittsburgh Post-Gazette, exposes hospitals to cover the cost incurred during a 60-day period after insurers are free to cease coverage for patients who have stopped paying their premiums but continue to have health coverage.

As more of these unanticipated consequences of the ACA come to light, the closer that full implementation in 2014 approaches, health care administrators are sure to feel the heat of ever-tightening margins more than ever.  Along those same lines, that is what makes careful attention and management of those costs that can be controlled more important than ever.

We believe that supply chain management represents one of those easily controlled costs.  What’s more, we have seen health care providers achieve meaningful savings by simply taking the time to establish a baseline accounting level of their supply chain contracts and spending, then putting a strategic plan in place to control those costs while maintaining the quality of care so important to their health care systems.

Moving forward, no one can predict with much certainty the minefield of hidden expenses and increased financial obligations that this new ACA legislation may contain.  But as the famous industrialist and philanthropist Andrew Carnegie once sagely said, “Watch the costs and the profits will take care of themselves.”

Careful supply chain management is one relatively easy and readily available way for health care administrators to watch and control their costs.

Copyright 2013 OC Reilly, Inc.

# # #