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MERGERS: Consolidation of hospital clinical services has the most potential for cost savings

After a merger or acquisition involving hospitals comes the hard work of integrating and consolidating the legacy organizations.  Opportunities for cost savings can be found in these areas, based on the experience of The Camden Group:

  • Administrative functions (20 percent)
  • Support and infrastructure (25 percent)
  • Clinical areas (55 percent)

Oftentimes, however, the sheer difficulty of aligning the stakeholders tends to result in a concentration on change in only the administrative, support, and infrastructure areas.  This article describes a planning process called BPOE (business plan of operational efficiencies) which is a “bottom-up” approach that can be used to generate cost savings ideas.

Source: Klar, B., Shufelt, G.P. (2015, June). Charting a path to efficiencies following a merger. HFM. Healthcare Financial Management, 69(6), 63-69.  http://www.hfma.org/Content.aspx?id=31008  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

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