Cost containment

quality

1. cost-containment By / Mahmoud Shaqria محمود محمد شقريه

2. Outlines: 1-Definition cost-containment. 2- The key policy options most likely to achieve the greatest cost savings are those that. 3- Target of Cost Containment 4- Cost Containment Strategy 5-Methods of cost containment 6- Why is cost containment essential ? 7-How to achieve cost containment ? 8- Challenges

3. Definition cost-containment: * The process of controlling the expenses required to operate an organization or perform a project within pre-planned budgetary constraints. * The cost containment process is an important management function that helps keep costs down to only necessary and intended expenses in order to satisfy financial targets.

4. CONT. * Cost containment is the business practice of maintaining expense levels to prevent unnecessary spending or thoughtfully reducing expenses to improve profitability without long-term damage to the organization.

5. The key policy options most likely to achieve the greatest cost savings are those that: 1- Reduce avoidable, ineffective, and duplicate use of services, including technology, and encourage clinically effective care based on comparative effectiveness research and implementation of information technology. 2- Pay appropriately for health care services, and encourage adoption of innovative models of health care delivery, such as the Patient Centered Medical Home ..

6. CONT. 3- Ensure accurate pricing of services. 4- Ensure an appropriate physician workforce specialty mix. 5- Reduce administrative costs. 6- Reduce costs from medical malpractice and defensive medicine. 7- Promote wellness, prevention, chronic care management, changes in unhealthy behaviors, and encourage patient responsibility for health and cost-consciousness

7. Target of Cost Containment 1-High health care system administrative costs. 2-Administrative inefficiencies associated with complex, uncoordinated, often duplicate regulatory and administrative requirements. 3-Lack of financial incentives for providers to hold down total care costs for a population of patients. 4-Inefficient , uncoordinated care . 5- Not enough attention to management of chronic conditions.

8. CONT.. 6-Prevention and early diagnosis and treatment. 7-Lack of financial incentives for providers to manage the total cost of care for an episode of illness. 8- Inefficient, uncoordinated care. 9-Inability to identify and reward high-quality / low cost providers 10- Lack of data to enable consumers to compare provider prices and care quality.

9. Cost Containment Strategy 1-Promote or require use of standardized, common electronic or paper forms (e.g., for billing and coding); 2-Improve the efficiency of provider-insurer transactions in claims processing and payment; 3-Institute a single process for verifying provider ( for example doctors, specialists, nurses) experience and education that is recognized by all parties, as opposed to having separate processes for each health plan , hospital and practice that requires providers to verify their credentials before hiring or paying them;

10. CONT.. 4-Give providers and patients instant access to a patient’s insurance coverage information (e.g., services covered, required copayments and caps on benefits) using a magnetic swipe card; 5-Standardize medical management policies (e.g., preauthorization Procedures ) 6-Streamline government regulations and compliance requirements.

11. Methods of cost containment a. Diagnostic related groups ( DRG) b . Combination of services c . Outpatient services d . Mass or bulk purchasing e . Early intervention and preventative services

12. Why is cost containment essential ? 1-rising material cost. 2-increments for staff. 3-less availability of manpower. 4 -quality : accreditation . 5 -reduction of income: Government schemes trying to cap bills. Poor reimbursement rates. Hospital only source of revenue is patients.

13. How to achieve cost containment ? Accomplishing these cost containment and cost reduction objectives requires: 1- experience. 2- functional knowledge. 3-strong project management. 4-correct business analysis skills. 5- ability to effectively manage the change.

14. Challenges : All hospitals are faced with challenges in today’s economic climate. These include: 1-containing spend and reducing costs are the highest priorities. 2-accomplish this containment and reduction with less help. 3-achieve results without poor in quality. 4- targets need to be achieved in a timely manner

15. THANK YOU!