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Published: August 15, 2023

Cost-Savings When Inflation is High

You can’t watch or read the news, listen to a podcast, or scroll through your social media feed without being bombarded with facts and opinions on the economy. The pandemic did a number on the economy, and there are a number of measures being put into place to “correct it.” But let’s be honest, inflation has felt out of control lately, and everything from medical supplies to labor has gotten more expensive. Even with the end of the Federal Public Health Emergency (PHE) declaration, the economic and political backdrop might leave you asking:

Is it even possible to save money right now? Should I just resign myself to the fact that everything costs more?

If that’s you, you wouldn’t be alone. In fact, we just began working with a client who expressed similar sentiments.

Lucky for this new client, they have been proven wrong. In early August, we delivered them a medical supplies report (just one of the 8 key areas we look at), and we had unbelievable results. We have two options to present to them: (1) involves switching providers, but comes with a 41% savings and (2) allows them to stay with the incumbent, and still provides a 31% savings!

It would have been easy to just assume that they have the best price on their current contracts, or assume that since prices are going up a new contract would mean higher prices. Instead, they will walk away with significant savings now and into the future.

So why is it worth pursuing cost-savings – even with high inflation? We have 4 reasons.

You Might Be Stuck in Survival Mode

Simply put: the pandemic changed the game. Long-term care organizations were put through the wringer, from health and safety concerns and PPP mandates, to supply chain issues and staffing shortages. Many are lucky to just remain standing.

But simply standing isn't enough. We know that you want to invest in capital improvements, resident care, and your incredible staff. There IS hope for continuing to do the work you are so passionate about.

At this point, if you’re still stuck in survival mode, you’re overspending on operations. If you’ve been head-down, just trying to keep everything afloat, now is a great time to evaluate your operating expenses to look to a sustainable future. It’s time to move into a season of thriving.

We have helped dozens of organizations who thought they were doing the best they could, but found new opportunities to save. It is possible to find more stability in your operations costs, and we’d love to help you find your footing.

The “Outsource vs. Self-Op” Answer May Not Be Obvious

We all know how difficult staffing has been. The labor market has been on a roller coaster, with labor shortages causing surging costs on labor. The labor market is completely different now than it was in 2019, and therefore you need to re-evaluate your strategies.

Add to that an ever-changing census, and you’ve got significant considerations in the age-old question of “Is it more affordable to outsource vs. self-op or insource”? The answer today could be dramatically different from the answer even a year ago, depending on the specific line item.

It’s one thing to compare contracts of different vendors, but it’s quite another to consider whether it makes sense for someone else to run part of the business. At HMS, we help organizations compare the true cost of their options, and provide the facts so that you can make an informed decision.

Pricing Hasn't Evened Out Since the Pandemic Surge

We all saw how the increased demand caused skyrocketing prices in the marketplace, which impacted individual consumers and larger companies, alike. Consider that a box of gloves went from about $25 to $100 or more during the worst of it. Some items have dropped back down, but not everything has, and prices for the same item aren’t necessarily dropping at the same rate.

Consider the consumer example of the cost of eggs. Earlier this year, a shortage due to avian flu caused egg prices to increase by about 500%. As prices were coming back down, there was still a significant discrepancy among different grocery stores. You could be paying $4.99 for a dozen eggs, while the store down the road was selling them for $3.49.

In other words, if you’re not comparing prices, you may not be reaping the benefits when those prices go down. Don’t assume you’re getting the best deal. Instead, consider vendor negotiations or let someone else negotiate on your behalf.

The Supply Chain Is Still Wacky

The supply chain is still reeling from the pandemic shifts, and hasn’t settled on a new normal. This is especially prevalent in office, medical, and janitorial supplies. Some products and supplies are still in short supply, and delivery times are longer than usual. Brand alternatives can be dramatically different for similar products.

At HMS, we have seen a lot of organizations using the wrong product or service for an inappropriate purpose. Basically, previous supply chain issues caused organizations to change products, or to “make do” with what they had, using things in non-traditional ways.

We recently worked with a client who had been using tactile-sensitive nitrile gloves in many departments within the organization. They made this change when other options were harder to come by, but in some instances a less expensive vinyl glove will do the trick. By evaluating how gloves were used in the organization, they were able to adjust purchasing and capture significant savings.

Have you audited the best use for the products you’re purchasing? Do you know if there is a cost-savings alternative? Have you been going on auto-pilot with some of your purchases and stopped to consider if it’s still necessary?

Despite the unknowns of the economy, it is still possible to save – and save big. That savings doesn’t have to mean cutting corners or getting a cheaper quality product. We are proud to provide savings (past, present, and future) for potential clients even when they don’t switch vendors or suppliers. So what are you waiting for? You’ve got nothing to lose. Give us a call today.

Ready to move forward? Schedule a call with our team or email us at getstarted@hmspecialists.com.

WE ONLY MAKE MONEY WHEN YOU SAVE MONEY
HMS works with long-term senior care organizations to review and negotiate expenses to lower costs, increase purchasing power, monitor continued savings, and improve margins. The result? Peace of mind and more cash on hand to invest in your residents.
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