Community Health Center Captures $624,000 in Additional Cash Flow Over Three Years

Community Health Association of Spokane (CHAS), a non-profit, federally qualified health center providing medical, dental, pharmacy, and behavioral health services for 60,000 patients annually in 12 clinics, was looking for cost-saving strategies across its major business expenses. Expense Reduction Analysts (ERA) was engaged to review CHAS’s spend in pharmaceuticals; office, cleaning, medical, and dental supplies; cleaning services; telecommunications; and purchased garments in order to generate increased cash flow that CHAS would then use to support its dental services expansion plans while improving its cash reserves.

Deep market knowledge, proprietary data modeling, and solid supplier relationships helped the client realize significant savings over a three-year period.

ERA consultants began by analyzing the client’s spend with the incumbent group purchasing organization (GPO) to determine if it was achieving the maximum discounts and cost management. Upon analyzing all seven expense areas, ERA validated that the client was realizing the maximum savings for 340B pharmaceuticals—but that opportunities existed in several other areas allowing CHAS to realize significant cost reductions.

CHAS appreciated that ERA assumes all risk for identifying savings and only receives payment if savings are found.

ERA identified several options that offered substantial savings and presented these to the chief financial officer and the CHAS team for review.  ERA’s process allowed the CFO to work collaboratively with the key stakeholders to reach a consensus and select options that were in CHAS’s best interest. In the end, ERA negotiated contracts to help CHAS save 5.5% for office and janitorial supplies; 6.7% in medical supplies; 21.4% for dental supplies; 28.6% for janitorial services, and 25.7% in purchased garments. ERA has also issued an RFP for telecom services and is awaiting results. To date CHAS expects the net aggregate cash flow improvements will exceed $624,000 over the next 3 years. 

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