Radical Cost Reduction
Four levers to help health systems thrive in a post-reform environment
One of the most important issues facing CEOs and CFOs of major U.S. hospitals and health systems is the perceived need for Radical Cost Reduction (RCR) – estimated at 20-30 percent of total cost structure by 2015 – in response to health reform.
The imperative is real and the challenges are great. How can organizations achieve RCR over the next three-to-five years and find the transformative opportunities needed to thrive in a lean, post-reform environment?
Radical Cost Reduction a new paper from Deloitte’s Health Care Practice:
- Reviews factors suggesting that hospitals and health systems should dramatically reduce their cost structures
- Identifies four levers that can assist organizations in achieving RCR:
- Take a strategic, not operational approach, to business model change
- Align executives around change efforts
- Use IT investment as a catalyst
- Embrace innovation as the new standard
- Explains how to target four main focus areas for RCR:
- Optimize the core
- Take advantage of scale and “systemness”
- Maximize value in clinical practice
- Rationalize asset portfolio
To read more, download the PDF attachment.