Health Leaders Media recently ran a great study on Spend Analytics that is a must read for any (health care) organization that doubts the savings opportunities that a good spend analysis tool can discover. In elevating the spend analysis function, the author clarifies that when it comes to effective capital management at your hospital, a spend analysis is the under-utilized tool that can transform your bottom line and bolster the strategic vision of the hospital.
The case study, about the Mount Sinai Medical Center in Miami Beach, FL, demonstrated how the project management office was able to employ spend analytics to quickly transform a an operating loss of 15.7 Million (in 2008) into a net surplus of 14.5 M (in 2009). What was a negative operating margin of 3.2% quickly became a positive operating margin of 2.95% for a total improvement of 6.15% in operating margin, which is very significant in a trouble economy. Plus, continued use led to even better results in 2010,when the hospital posted a 9.3% operating EBITDA margin.
For more details, see the case study on elevating the spend analysis function, but the message is clear. Spend analysis saves.