Hospice Reduces Costs $470,000 per Year

Delaware Hospice (DHI) is the largest non-profit provider of hospice and palliative care to patients throughout Delaware and counties in south eastern Pennsylvania. Their goal is to provide superior comfort and care that considers the combined medical, personal, emotional and spiritual needs of the individual and their loved ones at the most critical time in their lives.

To ensure the maximum amount of their funding goes directly to furthering their mission, DHI demonstrates strong fiscal responsibility and employs the best practices in expense management and procurement. However, to ensure they receive the greatest value possible from their key contracted service providers and maximize free cash flow to fund their mission with no compromise in service and quality, DHI asked Expense Reduction Analysts (ERA) to help.

DHI wanted to leverage ERA’s knowledge of the inner-workings, unique attributes, and pricing behaviors within each of the suppliers’ industries to understand what prices and terms were really possible. They also wanted ERA to provide all the resources needed to re-evaluate and re-negotiate existing contracts, while exposing DHI to additional options and approaches to consider. DHI was also looking for knowledge transfer in the form of validation and enhancement of their internal procurement practices.

ERA Director, Edward Flanagan, along with a team of ERA industry specialists including David Anderson and Alex Kreyn began by evaluating all of DHI’s major expense categories which revealed an opportunity to recover significant, additional cash flow in five areas of contracted services---medical supplies, ambulance services, DME, IV therapy, and pharmaceuticals. The ERA team began to work with DHI’s Financial and Clinical teams to identify quantitative and qualitative ways in which greater value could be provided through their contracted services, and then ERA began working with the existing incumbent suppliers and new potential service providers.

Namita Khasat, Chief Financial Officer at DHI describes how leveraging “ERA’s industry expertise has saved us between 12% and 21% on each of our major contracted services. It is important to note that while they recommended a best option for us, they were very open to adjusting to whichever option Delaware Hospice was most comfortable with. There was never any pressure to select any particular service provider. Their in-depth knowledge of each of the industries involved in the negotiations was very impressive. I would highly recommend ERA, especially the team that worked with us.”

Although ERA provided many forms of future-proofing in the improved contract arrangements, ERA continues to monitor the service providers for 2 years to ensure they deliver upon their commitments. DHI is realizing annual savings in excess of $470K per year with the potential of even greater annual savings for many years to come. The new additional cash flow is being put to good use in delivering superior hospice care to more patients and ensuring they continue to successfully meet the challenges of an ever changing healthcare environment.

Claire Walsh, Director of Homecare Services, worked closely with the ERA team and states, “Working to keep costs down while continuing to provide excellent care, treatment and services to our patients and families is of paramount importance. ERA did most of the behind-the-scenes work, so my teams of clinical staff and I could focus on what we do best---provide care at the bedside. They were professional, courteous, timely, organized, impressive and thorough, and are providing continuous monitoring of providers to ensure we continue to receive the highest-quality and most cost-effective services. I would work with them again in a minute!” 

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