Thirty ideas on how to save money in your medical practices
It’s the quintessential healthcare balancing act: Improving the quality of care while decreasing costs. Every inpatient and outpatient provider faces the challenge.
For Cleveland Clinic, the stakes are huge. After all, in 2014, the multispecialty academic medical center totaled 5.9 million outpatient visits and 153,000 admissions.
Several years ago, Cleveland Clinic launched “My Two Cents,” a program that invited caregivers to submit their ideas on ways to improve the organization in the areas of patient experience, quality and safety, employee engagement, or marketing/growth, explains Michael O’Connell, MHA, FACMPE, vice president, clinical and support services, Cleveland Clinic, Marymount Hospital. The program has resulted in 1,011 ideas and several million dollars in savings.
Then, two years ago, the organization assembled eight teams – each with a physician chairman – to address care affordability. “All areas of the enterprise needed to be looked at from a fresh perspective,” says O’Connell. The result? $498 million in cost-savings in 2014-15.
Speaking at last fall’s annual meeting of the Medical Group Management Association in Nashville, Tenn., O’Connell distilled hundreds of ideas down to what he called “30 Ideas on How to Save Money in Your Medical Practice.”
No. 1: Provide more electronic options. Cleveland Clinic no longer mails paper payroll checks, W-2s or open-enrollment packages to employees. All are available online. Total one-year payroll savings: $640,000 (figuring 44,000 employees and 26 pay periods).
No. 2: Standardize wound cleansers. The organization went from five wound-cleansing products to one, with a cost-savings of $10,000.
No. 3: Default printers to double-sided printing. Doing so can reduce paper costs by 50 percent.
No. 4: Replace “Sharpies®” with alternative markers. Cost-savings: $2 per marker.
No. 5: Eliminate exam-room phones. By eliminating six phone lines in just one department, one area saved $1,500.
No. 6: Decrease overtime. Create options that prevent inappropriate use of overtime. Examples: Institute a 36-hour work week, create a float pool, hire per-diem (PRN) nurses, reduce the 15-minute creep (that is, paying employees who consistently punch out several minutes beyond their scheduled end of shift).
No. 7: Consolidate online drug information resources. Cleveland Clinic went from two sources to one, saving $1 million.
No. 8: Provide in-house computer training for desktop applications. An organization such as Cleveland Clinic can avoid $200,000 in outside vendor fees.
No. 9: Reduce par levels of supplies kept on clinical carts, or eliminate carts and centralize supply inventory. Cleveland Clinic reduced par levels from 700 items to 330, saving $69,000 annually.
No. 10: Switch vendors of supplies. Cleveland Clinic saved $17,000 by changing its vendor of alcohol pads.
No. 11: Convert to unit-dose bacitracin packets. By converting to unit-dose packaging instead of 28g tubes, Cleveland Clinic reduced the amount of wasted product and saved $8,000 annually.
No. 12: Audit and consolidate courier pickup locations and times. The organization saved $35,000 in courier charges by doing so.
No. 13: Make e-prescribing the default option instead of paper printing. Potential savings: 1 cent per page.
No. 14: Consolidate printing functions. One location saved $5,000 by using central printing units for departments instead of multiple copiers in multiple locations.
No. 15: Reduce size of lotion bottles given to patients. Instead of handing out 20-oz. bottles, distribute 10-oz. bottles. Save money per unit and reduce amount of wasted product.
No. 16: Restock and reuse supplies that are still sealed. It’s a cost-saving alternative to throwing away such supplies.
No. 17: Standardize bivalirudin (blood thinner) concentration, from 5 mg/ml to 1 mg/ml. Reduces the amount of medication wasted, saving about $200 per drug dispensed.
No. 18: Replace foam cradle for patients’ arms at ambulatory surgery center. Cleveland Clinic reduced the price for each cradle from $6.19 to $2.57 by working with the vendor to settle on a comparable product.
No. 19: Implement programs and incentives for healthy lifestyle choices by employees, including a tiered health plan, no-smoking policy and chronic-care programs. Cleveland Clinic reduced the rate of employee health costs by 50 percent.
No. 20: Change sterile gloves. By switching the type of sterile glove used in one department, Cleveland Clinic’s cost per box dropped $78 to $20, for a savings of $5,000.
No. 21: Reprocess single-use devices. Cleveland Clinic uses a third-party company to reprocess such devices, including arthroscopic shavers, blood pressure cuffs, catheter introducer sheaths, endoscopic trocars and electrophysiology catheters and cables. Results? 12-month savings of $3.3 million, and 95,101 pounds of waste diverted.
No. 22: Power off computer monitors at night. Annual cost-savings of $6,100.
No. 23: Deactivate telephone and fax lines no longer in use. Thousands of dollars can be saved this way.
No. 24: Create a “green team” to identify ways to reduce, reuse and recycle waste. One Cleveland Clinic site has saved over $15,000 annually by eliminating the use of one dumpster weekly.
No. 25: Evaluate formulary approvals based on evidence-based medicine. By enlisting the support of the Medical Executive Committee, Pharmacy & Therapeutics Committee and clinical sub-specialty panels, Cleveland Clinic saved $750,000 in its oncology formulary.
No. 26: Evaluate use of pagers and on-call schedules. One department reduced its on-call pagers from three to one, saving $8,500 annually (on-call pay and monthly pager fee).
No. 27: Eliminate desktop printers. One location saved $12,000 (in hardware, toner and maintenance) by removing desktop printers in numerous departments.
No. 28: Create an Energy Committee to identify savings opportunities. In one location, the energy committee accounted for $100,000 in projects in its first year. Examples: Replacing light bulbs, decreasing temperature settings, turning off lights.
No. 29: Remove rapid sequence intubation (RSI) kits and incorporate needed medications into code carts. Annual cost-savings at Cleveland Clinic: $1,200.
No. 30: Evaluate alternate waste options. By using purple waste bags for recyclable surgical items, Cleveland Clinic reduced garbage bin fees and achieved $230,000 in annual cost-savings.