TriHealth Captures $31 Million in Supply Chain Savings

Challenge

In February 2016, TriHealth faced an $11.5 million budget shortfall that the health system sought to eliminate by the close of the fiscal year in June 2016. Located in Cincinnati, TriHealth comprises five hospitals, two stand-alone emergency department facilities, and more than 140 sites of care.

TriHealth engaged Guidehouse to help identify opportunities for labor, supply chain, and revenue cycle savings that could enable the health system to meet its fiscal year 2016 budget. Leaders also worked with Guidehouse to pinpoint opportunities for performance improvement across the organization that would better position TriHealth for a value-based environment.

The assessment uncovered more than $180 million in margin improvement opportunities — with more than 400 areas of potential savings identified in supply chain alone.

Solution

Once TriHealth tackled its budget challenge, the health system extended its partnership with Guidehouse, focusing on new opportunities to drive savings and performance improvement. One area that presented opportunities was the supply chain. Guidehouse Insights shows most hospitals could reduce their supply chain expenses by 18%, for an average savings of nearly $10 million per hospital — without affecting quality.

Guidehouse worked with TriHealth to refine and relaunch its value analysis program with a more streamlined approach, capitalizing on teams that were already in place and creating new value analysis processes for patient care, perioperative services, cardiac catheterization, interventional radiology, purchased services, laboratory, and pharmacy. Each team included TriHealth supply chain leaders, Guidehouse experts, clinicians (including physician and executive service line leaders and nurses), and representatives from data analytics and finance.

Finally, communication was critical to the initiative’s success. The new supply chain leadership, with Guidehouse’s guidance, established ongoing, action-driven communication opportunities with TriHealth senior leadership to keep them updated on early successes, progress to-date, and any potential roadblocks. This strategy was highly effective to keep the senior leadership team engaged and supportive of the program throughout implementation.

Impact