Healthcare Insider Podcast: Solving complex margin challenges

Healthcare Insider Podcast: Solving complex margin challenges

Camille Baxter: Hello and welcome to Healthcare Insider, a sponsored content podcast series for Modern Healthcare Custom media. I’m your host, Camille Baxter, and today I’m excited to welcome Roger Weems, Vice President and national Market Leader for advisory services at Premier Inc. – And a previous guest on the show.

Roger is a seasoned business leader with 20 years of experience focused on strategy and operations improvement in the healthcare industry. He has held leadership roles in consulting provider and medical technology organizations with a focus on strategy led operational transformation.

In this conversation with Roger, we will be discussing how health system finances are being impacted by the reverberations of Covid 19, in addition to skyrocketing inflation, rising interest rates and the high cost of labor. Importantly, the discussion will cover how healthcare leaders are overcoming these challenges to improve margins and rebuild their organization’s financial stability.

Before we dive in, I’d like to thank Premier for their sponsorship of this podcast. Premier is helping providers solve their complex challenges and drive business forward through a holistic approach to margin improvement. Utilizing PINC AI technology and PINC AI clinical, financial, operational, and supply chain data, healthcare organizations can tackle expense reduction and tap new sources of revenue to improve margins while continuing to deliver high quality care.

Roger, thank you so much for being here today. How have you been?

Roger Weems: Great. Thanks for having me.

Camille Baxter: Absolutely. I’m looking forward to hearing your thoughts on how to keep up with the ever-changing healthcare industry. So let’s jump right into our conversation. Financial pressures on healthcare providers are at an all-time high. What are you hearing from the providers you work with in terms of their current state and the challenges they’re facing?

Roger Weems: It’s a good question. In normal times, we serve an industry segment that operates on very thin margins. So what’s happened during and now post Covid has added a layer of challenges that has made normal financial stress somewhat abnormal and taken it to an all time high for lots of health systems across the country. So what we’re hearing is that the normal things that we talk about working with health systems around, which is clinical variation and how do we impact and make more consistent our care delivery models in order to maximize our quality as well as be as efficient from a cost of care delivery perspective. Those things are still important and will always be important, but what we’re hearing from providers now is we still want to do that kind of work because it’s important and care delivery is our core business. However, we have urgent financial turnaround needs. So what other solutions can you bring to the table to drive somewhat shorter term turnarounds on financial impact? ‘Cause we’re really feeling the impact of whether it be inflation, soaring interest rates, all of the things that are floating around today, making the environment even more challenging for our providers.

Camille Baxter: So it’s kind of like health systems are being hit from all angles with all of these various challenges. Can you talk a little bit about how Premier has evolved given these market dynamics and what’s your approach to helping providers navigate these unprecedented challenges?

Roger Weems: Yeah. We are with our clients on a week to week basis out in the market. And so we try to make sure that our businesses, as you mentioned, evolve with the challenges that our, our clients and members have in the market. So for us, that always centers around how we can technology enable solutions for our members so that we can not only solve short term challenges, but provide longer term sustainability for our clients. As these challenges have evolved, we have looked at our businesses over the last few years to ensure that we’re aligned with our members’ challenges in the market. So we’ve looked at additional technologies that we’ve brought into our technology portfolio to help us take different views of these margin challenges. We’ve traditionally been very broad and deep around the expense side of the margin equation over the last couple years. We’ve added technologies and partners in the industry to help us solve revenue side challenges as well because that’s something that we’ve heard loud and clear from our members across the country.

And I think that, you know, our core advantage is that we can bring to our customers around technology and unique clinical, operational and financial data access always provide the ability for us to work with our customers around care delivery and how we can look at efficiency and effectiveness of the care delivery models for those clients. But some of those types of challenges, that kind of work is time consuming and sometimes given our current environment, our clients are saying more recently that we don’t necessarily have that much time from a financial pressure perspective. So we’ve also looked to evolve to create businesses that can provide shorter term relief from a financial improvement perspective. And so manage services, for instance, is a new business that we’ve brought to market, helping customers look at potential non-clinical areas that they may be able to outsource or we can help manage from afar. So we’ve tried to really evolve with the challenges that our members are bringing to us in the market.

Camille Baxter: Let’s dig into that a little bit deeper. Can you talk about the specific areas related to margin improvement that Premier addresses?

Roger Weems: Yeah. Our core area that we believe we can bring truly differentiated assistance to our members revolves around the clinical aspect of our health systems operation. Whether that be quality performance or overall clinical care delivery and the variation that might exist in that care delivery model. That is sort of where we have built a reputation with our members and our clients that we’re able to do that hard work, roll our sleeves up, utilize differentiated technology and data that we can bring to the table to truly drive changes in the care delivery model that will result in what we hope is higher quality as well as a more cost effective model for a sustained period of time. And then our technology after we do that work with our customers, our technology lives on with those clients internally so that they can maintain and sustain those care delivery model changes that we help them make in order to be more efficient in the way that they deliver care.

So in addition to that, that’s a very comprehensive set of technology data and consulting work that we do to deliver that work. But in addition to that, over the last couple of years we’ve looked at non-clinical solutions that we can bring to the table for our customers that may enable some shorter term improvements to be implemented, such as our REIT solution, which is a automation of back office operations that enables automated accounts payable functions where certain health systems cannot keep up with all of those complex operations, with all of the suppliers that they have to pay on a month-to-month basis. Our REIT business is a new up and coming solution to help automate that back office and account, particularly the account’s payable solution additional things. We have a partnership called Long 80, which is a large technology partnership that we have in the market that we’re bringing to clients to do managed services and even a complete outsourcing of information technology services and operations for those customers that are looking for that as a solution. So we’ve brought different flavors, different solutions to bear that sort of balance. What we still think is our core advantage to help customers in their core business of care delivery. But again, many of these customers are now looking for other solutions that can be shorter term in nature to help their financial situation. So we’ve created new businesses across Premier and PINC AI to help solve these issues. I think the same fundamental belief that we believe that we have to technology enable these solutions in order for them to be effective and sustainable for our members.

Camille Baxter: Let’s take this a little further down that path. Can you provide some examples of Premier’s margin improvement work with providers?

Roger Weems: Yeah, two really good examples come to mind. One is much further along and started this journey with us about three years ago, and the other started just under a year ago. The first example, it’s a large health system in the upper Midwest that was a very early adopter. So there are an eight hospital system and they look to try to get creative with us and help co-create some of our technology and our analytics capabilities in the early days. So over about a two year period, they invested in our entire technology portfolio, but with a particular interest in understanding how we could maximize the utilization of our insights platform, which is our overall platform that can ingest all premier and PINC AI data feeds that come from a particular client, but also other third party feeds that we might want to combine to create business intelligence capabilities for a particular client.

So we spent two years really focused on the technology and the data and the analytics build out with that customer. And then over the last year and a half we’ve transitioned into utilizing that those platforms and those business intelligence customizations that we’ve built in order to drive specific margin improvement initiatives with that customer. And we’ve, I think we’re on track to hit 25 to 40 million in annualized impact with that customer. And I think we’re happy about achieving that during the time that we’re utilizing our technology and analytics, but we’re even more excited with the fact that because they helped build and customize the platform that they’re using from PINC AI, they will be able to use and continue to drive those improvements long after our consulting engagement is completed. So we’re building really performance improvement infrastructure, if you want to call it that with our customers that they can use long term.

The other example is a client in the South about a 14 hospital system, very large health system that was a product of a merger that has not driven efficiencies whatsoever that were contemplated when the merger originally happened a few years back. So in this case, this customer started from scratch, had some familiarity with our technology from prior lives that the executive team had been in at another client. And so we are starting from scratch in building a customized technology and business intelligence platform utilizing all of our tech solutions, our insights platform in combination with our consulting teams to look at a multi hundred million dollar margin improvement initiative over a three year period. And so this one was particularly exciting. We’re still sort of in the early stages of it, but strategically building the plan to to leverage our technology and data capabilities on our insights platform to really create the backbone for a really monumental task of margin improvement that this executive team needs to accomplish over the next three to four years.

We’re on the ground there, we’re making a lot of progress we’re we’re not quite a year into a three year consulting engagement, but the technology again is contemplated not just to serve the purpose of driving results for the consulting engagement, but to become a longer term part of the operating model for this health system so they can utilize it on an ongoing basis post engagement. So we’re very excited about the fact that we get to do this kind of work in the market where we’re really able to showcase what our integrated and combined capabilities can bring to bear for clients that are weathering a very difficult market with lots ahead when still ahead from a host covid environment.

Camille Baxter: Thank you for sharing those examples. I think it really illustrates the process that Premier uses and the amount of depth that you go into and really understanding that organization, their issues, their challenges, and charting a path and then developing that long term partnership to get them to where they need to be over time. So congrats on that impact.

Roger Weems: Thank you.

Camille Baxter: Looking to the future, what opportunities do you see for providers to maintain healthy margins?

Roger Weems: I mean, I think it’s in our newly minted brand PINC AI, I think we’re all firm believers at technology and particularly AI driven technology should be a big part of the strategy moving forward for health systems. Whenever there’s a process that continues to be manual, there are always gonna be opportunities to automate and look at more effective ways to scale that operation through technology. And so for us, we are continually challenging ourselves to look at other opportunities to expand our technology footprint. We’ve partnered with some new solutions in the market today that we’re evaluating for potentially even longer term relationships. At a fundamental level, we believe wholeheartedly that health systems should continue to look at non-clinical areas where automation can be used. And then in addition to that, looking at how technology can be inserted into the care delivery model. So technologies that are not new, such as telehealth have gone pretty rapidly from being somewhat novel ideas and new thinking.

And then we went through this very strange period of COVID and all of a sudden telehealth is almost like table stakes for clients moving forward. In other words, many health systems have invested in some sort of telehealth technology, whether that be in the physician office or across another segment of their business. But now it’s incumbent on those health systems to look at how telehealth can really be leveraged to create efficiencies from a cost perspective in care delivery, but also how it can expand and help solve some of the labor challenge that they have and provide leverage for the very valuable caregivers that are getting burnt out in lots of settings. And so I think telehealth is risen to the top, again for different reasons at this point, to really challenge health systems to utilize it and show how that utilization is gonna impact effectiveness and efficiency across the care delivery model. So their businesses,

Camille Baxter: It was an immediate solution that came into play because of a situation in a lot of organizations. And now it sounds like there’s a real opportunity for organizations to evolve and see how they take that to the next level.

Roger Weems: Yes, absolutely.

Camille Baxter: Roger, thank you so much for this conversation and for being here again with us and for sharing the impact that you’re making.

Roger Weems: Well, thank you so much for having me again, Camille. And we’re always interested in talking about how we’re helping our clients in the market, especially in this very challenging period of time across healthcare.

Camille Baxter: This has been a sponsored episode of Healthcare Insider created in collaboration with Premier To our audience. Thank you for tuning in today to find Roger’s previous podcast episode and today’s episode of Healthcare Insider. Go to the multimedia section on modern or subscribe at your preferred pod catcher. I’m your host, Camille Baxter. Thanks for listening.

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