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Strategic Cost Management Advisory Services
Effective cost management and improved efficiencies are critical to the future success of health care providers. Stronger margins and cash flows are needed to generate capital capacity and support ongoing and strategic investments.
For many hospitals and health systems, cost reduction efforts are not generating the intended bottom-line results. Merely identifying savings opportunities and launching performance improvement initiatives is not sufficient. Executives must place cost management in the proper context and address the underlying drivers of productivity and cost in order to achieve real cost reductions.
Getting to the Heart of Difficult-to-Solve Performance Issues
As an extension of the strategic financial leadership that Kaufman Hall has provided to hospitals and health systems for nearly three decades, the firm has introduced Strategic Cost Management Advisory Services designed to help clients convert cost management initiatives into improved, sustainable financial performance. The focus is on getting to the heart of difficult-to-solve performance issues that prevent health care organizations from realizing the gains they seek.
The service is comprised of four main offerings that aim to answer questions critical to any cost management initiative’s success:
Readiness Evaluation – Do you have the systems, practices, and management controls in place to produce needed financial improvements? What are the broad themes that need to be addressed to produce sustainable savings?
Opportunity Assessment – What is the magnitude of achievable cost reduction and what is the composition of that opportunity? What overhead costs must be controlled to avoid squeezing your operating margins?
Benefit Realization – Are staffing and other cost targets aligned with financial and strategic plans? What is the best way to organize and communicate your effort to produce the needed financial improvements? What is the most effective way to track results and drive accountability?
System Cost Rationalization – How might your organization better rationalize or consolidate administrative, support, or clinical services across facilities and functions?
Producing Sustainable Cost Savings
The Kaufman Hall Strategic Cost Management team applies rigorous, analyticallydriven methodologies to quickly identify comprehensive improvement opportunities and build a compelling case for change in your organization.
We then work with your organization to align performance improvement initiatives with staffing plans, budgets, productivity reporting, and management controls to “hardwire” improved accountability and produce sustainable cost savings. The Kaufman Hall software tool Budget Advisor is used by many organizations to support this effort.
Led by industry veteran Brian Channon, the team has a strong track record of helping clients realize millions of dollars of savings.
From rationalizing service lines to mitigating losses from physician practices to determining the true operating synergies of a potential merger, the Kaufman Hall team addresses cost management within the context of your strategic financial plan and goes beyond the obvious to address chronic problems and unlock hidden opportunities for performance improvement.
