Premier Technology Solutions Generate $1.5B in Savings Opportunities

Key takeaways:

• Solutions offered under Premier, Inc.’s tech platform identified $1.5 billion in member-validated savings opportunities, generating an average return on investment of 16:1 between July 2021 through June 2022.
• Healthcare organizations are turning to data and analytics as a resource to combat rising costs associated with inflation and labor.
• We outline how three health systems are using Premier solutions to cut costs without compromising care quality.

Health systems are on the lookout for ways to save money without negatively impacting quality as they combat a variety of margin pressures. Many are turning to technological solutions aimed at enhancing operational effectiveness to improve hospital bottom lines. In fact, according to a recent analysis, Premier tools were able to identify $1.5B in member validated savings opportunities, translating to a 16:1 return on investment (ROI) between July 2021 and June 2022. Expense reduction opportunities accounted for the majority of these savings.

To maintain this momentum, Premier, through its tech platform, is now widening its scope to incorporate strategies that can generate net new revenue and accrete directly to the bottom line. Some illustrations of how Premier solutions are being utilized for a holistic look at margin improvement are included below:

1. Modernize the Formulary Management Process

Hospitals spend millions on pharmaceutical products every year, often with limited data and insight into whether their use is appropriate. Health systems are utilizing Premier's Service Line Analytics (SLA) Pharmacy to help solve this problem and inform a more cost-effective approach to medication selection.

The cloud-based application enables providers to make smarter, evidence-based formulary updates and ensure clinical decision support (CDS) for therapies across the pharmacy landscape. Users of Premier's tech platform influence clinical practice change with data to generate savings while maintaining or improving quality.

Henry Ford Health (HFH), a health system with higher-than-normal prescription pain medication costs, used this solution to improve clinical standardization and identify savings opportunities, leveraging benchmarks to compare utilization and outcomes data against their peers. Based on the data, they launched a program for clinical standardization that quickly proved successful and was soon implemented at all five HFH facilities. Over 20 months, HFH was able to save $7.9 million using Premier's tech platform. Premier's data opened the door for important conversations that led to significant cost savings without sacrificing quality in patient care.

2. Improve Hierarchical Condition Category (HCC) Coding Initiatives

As healthcare shifts to value-based care (VBC), Community Health Network (CHN) is redoubling its efforts to better their HCC coding accuracy. HCC coding is a risk adjustment methodology used to estimate a patient's future healthcare costs. For much of its history, CHN dealt with risk scores below the national average. But as the healthcare landscape moved to risk-based contracts, CHN shifted its focus to HCC training and electronic health record (EHR) workflows.

CHN leaders partnered with Premier's Stanson Health to implement actionable HCCs. They began with 10 codes covering three categories centered around diabetes and morbid obesity - categories that would have the most sizable impact. In 2020, this shift resulted in a nearly $5 million improvement on the baseline spend calculation for their Medicare Advantage and Next Generation ACO patients. Then in 2021, CHN expanded its coding efforts to encompass 33 alerts, tallying more than $2 million in impact over three months. The improved accuracy and focus on HCC coding have enabled CHN to optimize success in VBC models and increased their financial outcomes.

3. Save Valuable Staff Time with Automated Surveillance

Time can be lost in nearly every step of the patient experience, from check-in to discharge, because so much of healthcare delivery is still done manually. For many health systems, wasted time is wasted money. It can also impact other areas of the organization, including creating inefficiencies across facilities, reducing productivity, and even negatively impacting patient care.

Realizing the importance of time-savings, Hartford HealthCare (HHC) adopted a Premier's clinical surveillance tool to automate electronic surveillance of healthcare associated infections (HAIs). Previously, HAI surveillance at HHC was based on a combination of automated surveillance and manual review of medical records to collect data, spot infection trends, ensure appropriate isolation and compile and send reports to the National Healthcare Safety Network (NHSN) and other regulatory agencies. The manual review was labor-intensive and open to errors. It also was not standardized, as processes were handled differently across HHC’s individual facilities. Adopting Premier's technology has allowed HHC infection prevention (IP) staff members to automate and streamline their workflow across the system. Premier's technology now helps them quickly and efficiently meet surveillance and reporting goals, while freeing up valuable staff time for education, rounding, and other initiatives. As a result, HHC saved an average of 10 hours per week per IP staff member—a savings of 1-2 full-time employees.

Final Thoughts

Although it is anticipated that healthcare costs will continue to rise in the near future, taking certain steps – including some outlined above – will continue to pay off now and in the future. Healthcare decision-makers must have a comprehensive awareness of what is achievable and how to overcome obstacles if they hope to improve outcomes and reduce costs. The changes enabled by Premier solutions all serve to cut costs by enhancing operational efficiency, reducing expenses and improving patient retention.

Learn more about how Premier solutions can help your healthcare organization reduce healthcare costs while improving high-quality care.

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