$1 Billion in Hospital Financial Improvements | E. 98

A focus on frontline innovation has kept VIE Healthcare at the forefront of hospital cost savings for 25 years. Lisa Miller shares her formula for success with Jim Cagliostro. 

 

Episode Introduction 

Lisa outlines how getting to the line-item details in purchased services was the key to early success, the ‘what-if’ questions that led to patents, and why hospitals should never settle for 10% in savings when digging deeper might lead to 25%. She also explains why letting the data speak takes the emotion out of vendor meetings, and why hospitals need to work with companies that will ‘’run after every dollar’’ of cost savings.

 

Show Topics

 

• 25 years of adapting to change in healthcare

• Paying attention to detail and a focus on data

• Cost savings innovation comes from ‘’what-if’’?

• Hospitals have one shot at cost savings

• Allowing the data to speak at contract renewal

• A comprehensive cost-savings solution with SpendMend

 

 

03:50 25 years of adapting to change in healthcare 

Lisa said VIE had focused on finding cost savings in purchased services from the beginning.  

‘’25 years ago, I knew I wanted to be different. So the difference was, for me, that we would go into an AP department and we would copy invoices. So we literally would say, we don't need anything from your team. We're not going to be disruptive. We're going to go in, we're going to copy invoices, and then from those copying invoices and copying the contracts, we're going to find cost savings. So you won't even see us. We're going to, in the back room, get the data and we're going to come back to you. And that works great. I felt like that was a big differentiator because working with the CFOs and the COOs are like, "Really?" And I'm like, "Yeah, just give me a day, give me two days, we'll bring a couple of people in, and then within less than two, three weeks, we're going to already have opportunities." So that was, in my mind, the least amount of friction that we could get to working with the C-suite, and that, for them, too, they can get buy-in. Obviously, they have to task their team with this. So the most they would have to do is tell somebody in accounting, they're going to be onsite and they're going to copy invoices and contracts. That was the worst case scenario. …. So what happened is, accidentally, because we copied all the invoices, we were 24 or five years ago already started to look at purchase services because others in this space, other consulting firms would ask for a PO detail report and they would focus on that PO detail report for their cost savings. So the purchase services would come up as just the header data and a total spend… they would never even look at it.’ 

 

07:08 Paying attention to detail and a focus on data 

Lisa said a desire to do the work and getting down to line-item details are two differentiators for VIE. 

‘’…we are so detailed-focused, and so when you asked your initial question how we see change or how I view that, it started with how do we support hospitals for success? And so my lens on it was always to make things easy to... be easy to work with, get the data. And then over time, as people saw, like what you said, just our desire, our roll up your sleeves, we get to the details approach. We're not looking at ratios. In the past, we've achieved 7%, so we are going to give you 7% savings. It was always about their data, their line-items, their detail. When we show an opportunity report, it is down to the details. And so that's a great point. That's our differentiation. So fast-forward, we would get the invoices. We had a team of people on the backend just entering line on details. And so our work was always so different, when our hospitals saw that work, like, this is work that we've never seen before. And it's because everything matters, those details matter.’’

 

08:22 Cost-savings innovation comes from ‘’what-if’’?

Lisa explained how ‘’what-if’’ questions resulted in innovation (and patents) in cost savings. 

‘’It's this, I love what if questions, and that what if question really got me down the road of finding a different solution. The different solution was take an off-the-shelf OCR tool and I had to search literally globally for the right OCR solution and reverse engineer it and have to... We code invoices. We had to learn a system, we had to code invoices, we had to bring people in and take a totally different view on it, but it was difficult. And I had people telling me, "You'll never be able to do this. You'll never get a patent." We got several patents. And it was such a great lesson to go through the process and to have people like Anthony who came on board and, of course, Pondu and Rich and Brian, who've kind of been part of this process. But now to have patented technology, to just have a different vision for our work, and to keep pushing forward. To stay ahead, for us, so we can deliver a differentiated result. So one of the things I've been really thinking about a lot is why choose us, right? And there's other people, other companies, and they're doing everything manually. We're automating it. Now we can get to savings in a much quicker, expedited, rapid way, so hospitals can get results.’’

 

10:55 Hospitals have one shot at cost savings

Lisa said health systems have to get it right at contract renewal, and that means getting to the line-item details. 

‘’But I've been thinking about why this matters. And so, the one area where I think it matters the most is that hospitals do have so many things that are going on, so many more competing priorities. So they've got one shot at this contract renewal. They've one shot at looking at this cost savings. What do you want? If you've got this one shot, do you want to just grab 10%? Or do you want to have the company that's going to roll up their sleeves, get to the details and get them 22%? Just because you get 10% of savings, sometimes everyone's high fiving, but what if that should have been 22 or 25? So the big thought that I've been coming to is you got one shot at this agreement, don't you want to... Let's do it right. And again, I go back to this differentiation of for us is that every single project is not trying to get through it. We want to do it right. And that, to me, is a big differentiator and how we look at the market. Let's do this right? You may not be doing this contract again for a few years. Let's get it right. With our backend technology and automation and our systems, we can get to everything we need to do quickly so that we can have the conversations.’’

 

13:22 Allowing the data to speak at contract renewal

Lisa said taking the emotion out of vendor meetings can help to expedite cost savings. 

‘’And look, sometimes those conversations maybe with the vendors are difficult, but sometimes, I often say, "Let's take the emotion out of it and just have the data." I'm really not trying to have any kind of difficult negotiations. They are trained negotiators, and hospitals need to understand that. But if we can let the data speak, take the emotion out, and really compress the timeline. Remember the vendors are trying to expand the timeline, we're trying to compress it. But if you let the data speak, hopefully the data gets to internal collaboration with clinicians and administrators and physicians. And then it gets to, with those negotiations, the utilization, the benchmarking, the thinking around why this contract needs to look a certain way, is done through the data and not done through emotion. And that's what I think is most important.’’

 

16:23 Offering a comprehensive cost savings solution with SpendMend

Lisa explained how VIE’s services have expanded since being acquired by SpendMend. 

 

‘’…with SpendMend we're able to add profit recovery, which is the core offering that SpendMend has started, which is really key because this is the number one provider of an AP audit, recovery audit is SpendMend so we're able to add that offering. And a lot of the data already comes from what that work is and that core service line. So, we can get that data from those profit recovery audits, which makes onboarding us for purchase services, PPIs, or med-surg just that much more faster because we have the data. And then, finally we have pharmacy. And pharmacy at SpendMend is truly on the cutting-edge, right? So we've got pharmacists, pharm-Ds that support hospitals in their 340B analysis, support them in their cost savings, cost optimization, and we have Trulla that really is a very forward-thinking technology and service that allows them to protect and order in a way that optimizes those costs on the front-end. And then, we have Rebate Insight of course, and that's really making sure our hospitals are getting those rebates, which is really key. So, you put everything together, one solution, one offering, and under our one company, so we're not subbing out, we're not looking to pull other services into under one company: we can come in and deliver a complete cost savings initiative from end-to-end, and a hospital can know that every single dollar is being looked at, right? …From pharmacy, to PPIs, to purchase services, profit recovery, we can do it all and not need anybody else outside. We've got the experts, the team, the technology, the templates, the strategies, all under one house. So for me, that's tremendous.’’

 

Connect with Lisa Miller on LinkedIn

Connect with Jim Cagliostro on LinkedIn

Check out VIE Healthcare and SpendMend 

 

You’ll also hear: 

 

The VIE Healthcare difference:  ‘’When people say, oh, "Well, what's the difference between you and all the other companies?" I often say, "…my team's been looking at invoice data for 25 years." And it just happened accidentally.’’

 

Innovation in cost savings isn’t always black and white: ‘’There are going to be new things. But there are principles, and models, and strategies that are very successful. …Sometimes I have to ask people to live in the gray.’’

 

Applying critical thinking in new areas leads to cost savings: ‘’….we apply some critical thinking to the data, or there's no utilization, … or we have some templates and some models that are very, very successful. And that can be applied across the board as we look at... new IT agreements or new technologies…’’

 

Getting the most out of every single agreement: ‘’….if your hospital had this one opportunity with this one agreement and with time so short and the competing priorities, what level of results do you want if you've got this one shot? And if you're going to open up these agreements, pick the company that's going to run after every dollar for you.’’

What To Do Next:

 

1. Subscribe to The Economics of Healthcare and receive a special report on 15 Effective Cost Savings Strategies.

 

2. There are three ways to work with VIE Healthcare:

 

• Benchmark a vendor contract – either an existing contract or a new agreement.

• We can support your team with their cost savings initiatives to add resources and expertise. We set a bold cost savings goal and work together to achieve it. 

• VIE can perform a cost savings opportunity assessment. We dig deep into all of your spend and uncover unique areas of cost savings. 

3. If you are interested in learning more, the quickest way to get your questions answered is to speak with Lisa Miller at [email protected] or directly at 732-319-5700.