Cost Containment
COST CONTAINMENT
Description also available in video format (attached
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Introduction
·
Process of controlling the expenses required to
operate an organization or to perform a project within a limited budget
·
It is an important management function that
keep costs down to only necessary expenses in order to satisfy financial
targets
·
It also refers to a business practice of
maintaining expense level to prevent unnecessary spending
Importance
& Target of Cost Containment
· Importance
o
Reduce avoidable, ineffective & duplicate
use of services
o
Pay appropriately for health care services
and encourage adoption of innovative models of healthcare delivery
o
Ensure accurate pricing of services
o
Reduce administrative costs
o
Reduce costs from medical malpractice
· Target
o
High healthcare system administrative costs
o
Inefficient & Uncoordinated care
o
Lack of financial incentives
o
Low quality
o
Low cost providers
Strategy
& Methods Cost containment
·
Strategy
o
Promote use of common electronic or paper
forms
o
Improve efficiency of provider insurer transactions
in TPA
o
Instant access to a patient insurance
coverage information
o
Standardize medical management policies
o
Streamline government regulations &
compliance requirements
·
Methods
o
Diagnostic related groups
o
Combination of services
o
Outpatient services
o
Mass or bulk purchasing
o
Early intervention & preventative
services
Essentials,
Steps & Challenges of Cost Containments
·
Essentials
o
Rising material cost
o
Increment for staff
o
Quality
o
Accreditation
o
Reduction of income
o
Poor reimbursement rates
·
Steps
o
Experience
o
Functional Knowledge
o
Strong project management
o
Correct business analysis skills
o
Effectively manage the change
·
Challenges
o
Containing spend & reducing costs are the
highest priorities
o
Accomplish this containment & reduction
with less help
o
Achieve results without poor in quality
o
Targets need to be achieved in a timely
manner
Video
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