Channon & Associates partners with healthcare leadership teams to meet cost reduction goals and produce lasting results. Services include:

Fast-Tracked Goal & Target Setting

Rapid Improvement Plans with RESULTS AUDIT TRAIL

First-Things-First Attrition Management

Stay the Course Implementation Assistance & Advice

Overhead Value Analysis & Corporate Optimization

Non-Benchmarked Cost Reduction

Working Sessions & Workshops

Leadership Engagement & Readiness Assessments

Cost Intelligence Assessment & Workshops

8 Habits of Highly Effective Cost Management™ Working Sessions

Turnkey Tools to Strengthen

Cost Intelligence

Performance Improvement Plans

Execution & Sustainability

Representative Strategic Cost Management Success

Challenge:

A two-hospital system with $600M in net operating revenue began losing millions of dollars a year after losing sole community provider status when a multi-hospital system built a new hospital in town. The organization’s long range financial plan indicated a $30M improvement was required to achieve an “A” bond rating and remain independent.

Solution:

  • Identified $36M in cost savings or 20% greater than financial improvement goal
  • Increased discipline in the position review and hiring processes by limiting to 50% the percent of requisitioned positions approved for hire
  • Developed department-specific labor cost reduction plans, non-labor interdisciplinary team plans and system-wide initiative plans
  • System-wide plans addressed program consolidation, service rationalization, and changes to premium pay and vacation policies
  • Changed care delivery model on inpatient adult units, reducing reliance on unskilled labor
  • Provided project oversight, stick-to-itiveness, and course corrections

Results:

  • Cost was reduced by $30M+ in one year
  • While the organization eliminated over 250 positions, fewer than 60 employees were displaced
  • Cut non-labor cost by over $9M
  • The system is now profitable with operating losses turned around to a 5% operating margin
Strategic Cost Management

“…Our organization has a strategic imperative to reduce the cost of care by 25% over time to make care more affordable to our patients. In addition to reducing our own enterprise costs, this goal includes reducing the cost of care for populations of patients.

The consultants assisted us in achieving the enterprise cost reductions we were unable to produce on our own. With the help of the consulting team, our organization developed cost reduction plans that enabled us to meet our goals.

Key to this success was their candid approach to strategic cost management, the disciplined tools and processes they introduced and their analytical approach to target setting. The consultants were very professional and provided the expertise needed to make this challenging work as positive as it could be.”

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