How Data-Driven Construction Procurement Methods Improve Patient Care

Healthcare, like any other industry, is limited by budgetary constraints and infrastructure. The most significant differentiator about healthcare is that these limitations can negatively affect the overall quality of patient care. Recently, Scott Creekmore, Vice President of Healthcare at Gordian discussed with The Journal of Healthcare Contracting how initiating data-driven construction procurement methods can improve patient care for healthcare institutions, a concept that’s designed around value-based care.

What is data-driven procurement?

Healthcare makes advancements in
innovation, technology, treatments, and methods of care every year, with previous approaches to healthcare becoming outdated seemingly as soon they are implemented. Even with the range of treatments that are continually updated, the construction of healthcare facilities hasn’t advanced much. “There’s no real way to validate the costs of a project,” Creekmore said. “Depending on the size of your project, they can be anywhere from 10% to 60% of a swing in price. How do you know that you’re getting value for your project?” With data-driven procurement, you can guarantee that the needs of your project will be met, all while dramatically reducing costs.

Data-driven procurement is a procurement strategy that uses data as a central measurement for the effectiveness of your strategies and decision making, especially in regard to construction projects for your healthcare system. “It takes data, like the cost of construction, and puts that on the marketplace and says, ‘Ok, we’ve done our research. We know what these costs should be. We have broken down the material, identified the labor, identified the equipment, and put a crew together. Give us your markup on that.’ It allows you to do one bid at a time, giving you a pool of contractors to pick from.”

Value-based construction is a concept that uses data-driven procurement to develop projects that increase the contractor’s profit margins by reducing their overhead, while also reducing the cost of construction for the healthcare facility. In turn, this improves patient care, lowers patient costs, and increases profitability for the hospital. Additionally, the faster that hospitals can make value-based construction decisions on what they need, it will directly the impact the community around them, such as health systems being able to more quickly build a OR suite.

Investing in your healthcare facility

As healthcare needs become more complex, healthcare organizations need to be better and smarter about their financial investments. How can these organization make better decisions and financial investments in their facilities?

Creekmore says healthcare organizations must first rely on their available data. “Take the time to build a dataset that you can share with your contractor, so you can have mutually agreed upon prices, and you can change the dynamic, the relationship that you have with your contractor. Have your contractor begin to focus on the value that he can bring your organization, not just the price.” Data is reliable because it doesn’t lie about your organizational needs. Your data will tell you exactly how well your current processes are working, how effective your patient care is, and what your organization is missing.

Additionally, utilizing the right software is critical. Using a robust software to record, track, and manage all your data is an essential part of this process. Creekmore said, “You’re going to want to make sure that the data is validated and locked in, so you can trust the pricing that you are getting.”

Sponsored – Gordian

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