Healthcare cost containment is a comprehensive strategy that combines attempts to cut an organization’s current costs and manage future costs. Effective cost containment goes beyond simpler, occasional cost-cutting projects. Although such measures could result in immediate savings, the advantages usually fade over time or are canceled out by increased costs in other areas. To buck these trends, healthcare leaders should adopt a global approach to cost containment, a continuous component of regular organizational activities. Understanding of cost containment strategies allows healthcare organization to promote efficiency in its operations, which encourages improvement in quality of services.
Healthcare finance experts collaborate with leaders from across the business to continuously monitor and evaluate costs, find opportunities to cut costs, and stop or limit future cost increases as part of a cost containment strategy. Examining alternate reimbursement methods, altering behavior, or obtaining care outside your regular insurance network are a few instances of cost containment (Stadhouders et al., 2019). Effective cost-containment techniques can reduce a company’s healthcare expenses while also enhancing provider integrity, improving care quality, and expanding access to healthcare services.
Reference-based pricing is one of the more well-liked cost control techniques. Reference-based pricing, or RBP, is a cost-containment strategy that uses a database of average healthcare service prices to negotiate lower rates from a position of knowledge. In addition, the cost containment strategy improves the quality of healthcare by providing strong tools should be provided for data-driven decision-making (Kanavos & Yfantopoulos, 2019). Clinical leaders, departmental managers, and others need the appropriate tools to successfully execute healthcare cost containment methods.
In conclusion, understanding various strategies of cost containment promotes quality improvement in healthcare organization. Implementing cost containment strategies means making data-driven decisions and seeking areas that need improvement. Modern cost accounting, comparative analytics, and clinical comparison tools are needed to analyze and track costs, cost and utilization trends, patient numbers, productivity, and other performance measures related to targets. When executing cost containment measures, organizations require access to precise cost data and analytics at every level. As a result, total quality improvement is an inevitable part of cost containment implementation in a healthcare organization.
References
Kanavos, P., & Yfantopoulos, J. (2019). Cost containment and health expenditure in the EU: a macroeconomic perspective. In Health Care and Cost Containment in the European Union (pp. 155-196). Routledge.
Stadhouders, N., Kruse, F., Tanke, M., Koolman, X., & Jeurissen, P. (2019). Effective healthcare cost-containment policies: a systematic review. Health Policy, 123(1), 71-79.