OC Reilly Blog: Ensuring a Strong Foundation First

By Ray Staudt, Executive Director, Business Development, OC Reilly Inc.


(April 27, 2015)–As health care reform continues to roll and ripple out, providers keep discovering that no part of their systems can avoid feeling some effects.  And a consistently shared theme comes in the form of operating at the most cost-efficient levels while ensuring quality care.

“Most hospital and health system finance leaders have accomplished a great deal, on both the cost and the revenue sides, to prepare their organizations for the challenges posed by health care reform, with impressive efforts to improve the bottom line in areas such as the supply chain and revenue cycle,” reads a portion of an article in the March edition of Healthcare Financial Management, titled “Finance Leadership Imperatives in Clinical Redesign.  The story continues, “However, with the shift to value-based payment models and continued pressure on payment rates, finance leaders can no longer rely on sound financial management alone to ensure the success of their organizations.”

While the essence of the article deals with including physicians in achieving greater cost-efficiencies in clinical treatment – a phenomenon that undoubtedly will continue to grow in importance – it remains vital for health care systems to maximize gains in their basic business processes first. 

The article acknowledges that “most” health care decision-makers have pursued “impressive efforts” to improve their supply chain operations.  But that cannot be the end of that part of the story.  “Most” does not mean “all.”  “Impressive efforts” does not mean “long-term, sustainable success.”

Every part of the health care spectrum can safely assume that it will be affected somehow by the comprehensive reform now occurring.  But why not ensure that the most basic dollars-and-sense operations – like supply chain processes, decisions, and systems – get the full attention and, thereby, the maximum economic efficiencies and benefits, before moving onto the more challenging elements?

Where do you spend, with whom, for how much, and to what value?  That’s solid supply chain management.  That’s where to begin.  That’s ensuring a strong foundation first, so that additional cost-efficiencies can be pursued with confidence.