Third-party purchased services can help save hospitals on cost while preserving quality of care and operation efficiencies

How third-party purchased services are helping providers save money

September 24, 2021
by John R. Fischer, Senior Reporter
In the last 18 months, purchased services have accounted for 34.8% of non-direct labor spending. With the Delta variant surge now digging into 2021 revenue gains and expenses rising, hospitals are looking at these third-party options to save on cost while maintaining operational efficiencies, according to Conductiv, a third-party spend optimization solutions provider and a consolidated subsidiary of Premier.

“In many cases, the urgency of sourcing new categories and implementing safety measures with on-site third-party service providers has highlighted the fragmented and unstandardized nature of supplier management for healthcare providers,” Chris Gormley, CEO of Conductiv, told HCB News.

Looking at 102 healthcare organizations that spent $49 billion on these services, Conductiv calculated significant cost savings with such services:

Other services providers are looking at include laundry and linen; inhaled nitric oxide therapy; intraoperative neurological monitoring; and snow removal. When choosing a third-party service, providers should know what specific capabilities they bring and how those equate to cost-savings. For instance, efficient third-party service should be able to utilize AI and machine learning to provide real-time views on utilization and usage rates. This can help manage specific savings targets and ensure providers comply with new agreements.

They should also be able to provide instant access to critical sourcing, spend, and process information to make sure hospitals are getting the level of service stated in contracts in terms of quality and price. In addition, hospitals and supply chain teams should consider GPO contracts, as they can yield the greatest savings and have the fewest discrepancies, which saves time for both buyers and sellers, according to Gormley. “Industry-leading purchased services contracts, technology and partners can help hospitals and health systems reduce costs, increase revenue, improve workflow and efficiencies, and enhance quality."