Cost Reduction in Health Systems: Lessons from an Analysis of $200 Million Saved by Top-Performing Organizations

Caldwell, Chip; Butler, Greg; Poston, Nancy
December 2010
Frontiers of Health Services Management;Winter2010, Vol. 27 Issue 2, p3
The number of healthcare organizations that require targeted cost reduction due to state and federal budget shortfalls demands intense senior leader accountability. Leaders are discovering that traditional methods for curbing expenses have been largely exhausted, and they seek fresh approaches to meet their strategic imperatives. This study of more than 200 US healthcare organizations, which included detailed site visits and interviews at 42 organizations with $188 million validated cost recovery, found specific nondelegable senior leader roles among top performers. These roles relate to techniques for goal setting, use of data, characteristics of organization-wide accountable change models, and culture characteristics.


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