Hospital finds $1M in savings
Tahoe Forest Hospital District staff found ways to save more than $1 million each year by cutting costs on everything from pencils to pharmaceutical contracts, according to hospital officials.
The project, which is called non-labor expense management, is part of a program improvement process the hospital implemented in March 2004. To find where they could cut costs, district officials hired consultant Contract Support Services to find where they could trim the fat by looking at benchmark expenses at other hospitals.
“Looking at it globally, health care costs are definitely on the rise,” said Bob Van Gelder, hospital director of business performance.
“Any money saved means we don’t have to increase prices as much … it’s just a win all around.”
The district formed nine teams in various departments of the hospital. The consultant gave the team leaders suggestions as to how they could find savings within their departments, from changing the creamer used in the cafeteria to updating medication contracts in the pharmacy.
When it was all complete, the district found $1,028,000 in potential savings for future years. This fiscal year, the district will save a bit more than $900,000, Van Gelder said.
“All of the things we’re implementing will help us year after year after year,” he said.
In the Tahoe Forest Hospital cafeteria, Margaret Holmes and her team found ways to save at least $12,000 per year. They changed the food department’s catering menu from high-end to moderate fare and consolidated their contracts with distributors, among other changes.
“This process that we started helped us shift gears and think about how we can improve our cafeteria,” Holmes said. “Aside from the stigma attached with hospital food, we changed the tray presentation so it looks fancier rather than institutional.”
Non-labor expense management is part of the hospital district’s recent entrance into the Malcolm Baldrige National Quality Program, a program improvement process that was developed by Congress in 1987 to raise awareness about the importance of quality and performance in business. Ultimately, Tahoe Forest Hospital District will apply for the Malcolm Baldrige National Quality Award.
“This is hopefully the first part of many benefits our community will see from our taking on this process,” said district spokeswoman Paige Nebeker.
Tahoe Forest Hospital District is a public agency, funded by taxpayer dollars. It has a five-member board of directors who oversee the district’s operations.