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David Muntz is dropping some wisdom over on the Starbridge Advisors blog. Today we take a look.

Transcript

Today from overhead to opportunity, immediate it expense reduction strategies. Looking forward to this discussion. My name is bill Russell. I'm a former CIO for a 16 hospital system. And creative this week health set of channels dedicated to keeping health it staff current and engaged. We want to thank our Chell sponsors who are helping to make this content possible.

They are short test in artist site two great companies. Check them out this week. health.com. Slash today. There you go. Going a little slow here today. We'll get, we'll get through it. , let's see. Oh man, we are so excited. We are $5 short of $40,000 towards our $50,000 goal. Of, , with Alex's lemonade, stand for cures for childhood cancer.

, you know, what, if you get a chance today, hit our website, hit the logo, give $5. Get us over $40,000. It's kind of a silly spot to be, but, , we have some really fun things that we're doing right now with our 2 29 events. We raised $5,000 from the last event. And I believe we're going to be able to do the same.

At the next, , next couple of events. So, , I, the $50,000 mark is in, , our sites and I'm looking forward to, , continuing to blow through that number and continue to raise money. We want to thank you for your generosity and, , we appreciate all that you guys do. All right. , some of my favorite people in healthcare are the people over at starboard advisers.

, Sue shades over there. So Stephen months, David months is writing a three part blog address that I highly recommend. You, , take a look at actually. Oh, the only one that's out so far is the first one. It's it's titled from overhead to opportunity immediate it reduction strategies. When I read this, I knew I had to do a today show on it. , I'll give you, I'll give you some of the, some of the background on it. I'll also throw in some things that I hope he covers later, but there's some things I'm thinking about as well.

So, , no. No shock to anybody financial challenges within healthcare, within the economy in general. And, , we've been asked to reduce things. And he gives some of the background in the first couple of paragraphs. And then he says here's some ideas to get going. And I love this because it's just so pragmatic.

So he says, start with an expense review assessment. Any mention of such an activity will have an immediate and usually negative impact on morale and could impact productivity. You must be transparent and candid with the staff about implications of such a study. It is so important to, to approach this correctly and to communicate correctly.

Treat this as an opportunity for it to help the organization, not just survive, but prosper something you must believe if not communicate properly and broadly. The discussion of an assessment could exacerbate the staffing issue for it and concern those outside of it, who would benefit from it enabled or it dependent projects.

That may have to be scrapped in an effort to reduce expenses. Okay. So he sets that up as the framework. He then goes on to say there are many potential expense reductions, including, but not limited to. And then you have a really great list application rationalization. Review of invoice history. Operating capital budgets, , depreciation, amortization schedules, asset inventory, and leasing schedules, allocation methodology, primary it contracts starting with those that renew in the next two years.

, communication modalities, data, voice, and video networking contracts. It costs. Carried outside of it, sometimes refer to a shadow it to ensure your organization has a true and comprehensive view of it costs consolidating where possible disaster recovery approach buy versus build approach on-premise versus cloud approach it performance metrics.

Process optimization. , infrastructure review staffing, , is only a last resort. He says retooling whenever possible and practical. And he goes on and talks a little bit more about these things. I'm just strongly encouraging you to follow these, this three part series. , given, , David's, ,

Vast experience. I'm not calling him old. , and if he's listening to this, I just want you to know I'm not calling you old. I'm calling you experienced wise is what I'm calling you. , he has had to do this in his Freire probably several times. , just so happens. We had a 2 29 event, I think in January.

Where we were at the sort of the peak of man, we've got to find some cost reductions, and we had a pretty good conversation amongst the CEOs. And I took some notes and I dug those notes up. Of some of the things we were talking about, we, , put a couple things up on the board. Now my notes. I'm not a great student, so my notes are not that great, but I'm going to give you what I have here. ,

You know, professional negotiations. , a lot of the organizations have gone to professional negotiators, especially for the big contracts and they do a gain share kind of thing. They will take a percentage of the, , of the negotiated savings in a lot of cases, what the stories that came back, where we negotiated it, as far as we thought we could, and we felt really good about it.

And then the professional negotiators went to work and even saved more money. So. , professional negotiators is, is one thing to look at, , over utilization, duplicate apps, , capabilities. , something to, , something to keep an eye on. , One of the things that we discussed at length was the state of your contracts and getting proactive around your contracts. If you don't have your contracts in a single place.

And have what I call a contract calendar, knowing when they're going to come up and not finding out about it like a month before with an email, but being a lot more proactive and looking at your contracts, say six months, five months before renewal. , so if you have to do any maneuvering in order to not renew a contract or not renew portions of a contract,

, or negotiate parts of that contract, you can do that. So proactive, , management of your contracts. , another idea was benchmarking. There's a lot of benchmarking services out there. And a lot of, a lot of people benefited from, , it benchmarking just to see how potentially your. , your organization was doing potentially how your vendors were doing and that's going to come up in a minute.

, Vendor performance scorecard was another thing that they talked about. And it was, , holding the vendors accountable to the promises that they have made and creating a scorecard and having the communication with them around those scorecards. , they talked a little bit about shared risk contracts. , I don't remember what we talked about, but, , as you know, shared risk contracts with vendors would be.

, you know, we'll pay you when we realize the. , the F the full value, the full ROI that has been promised. , there's some, there's some pluses and minuses around those, but that was one of the. , one of the, , conversations. And also along with that goes a hold back incentives and those kinds of things.

, consolidation. Is definitely something, , And this is all in that category of application rationalization. And, you know, the biggest application rationalization project that has gone on at every health system has been the EHR project because when you do any HR, if you're implementing epic or.

Or one of the other. EHR generally, there's a consolidation of applications because the EHR. He has gained functionality over time. And you can, you can essentially retire a bunch of applications by the way. That's another area where a vigilance is your friend. If you said you were going to retire an app, make sure it's retired.

Make sure you're not paying for that app still. , I know that when I was CIO, there was a couple cases. We came across apps. No one was using no one was accessing. We were still paying for, they were still taking up CPU cycles. , so no, what you have. , make sure you follow through on the application rationalization and turn those things off. Get those license out.

, let's see. , we talked about educating the organization and, and, , David touched on that as well, making sure the organization understands the cost of it. , and understands the different buckets of it. One of the, one of the things I talked to a lot of CEOs about is. , we were able to, I sat down with our CFO and we were able to move a whole block of the it expenses out of the annual budget conversation.

And the reason we did that was because no matter what we did, we had to spend that money. It's like buying a car, you have to do maintenance. You have to clean it. You have to fill it with gas. Period. That's what you have to do. And so, , we had gotten into a lot of trouble when I came in. A lot of the stuff was end of life, including the workstations.

, including most of the equipment in the data center, we wanted to make sure that never happened again. So we moved all the refresh costs. Out of the conversation. So it didn't look like, Hey, we're going to give. You know it a 5% cut and that 5% cut came on top of a whole bunch of money that we had to spend. The EHR should fall in that category. The ERP solutions fall in that category.

, anyway. Just some of the things too. , To consider. And, , obviously we had conversations about outsourcing how much money can you really say without sourcing? , where does outsourcing makes sense and where selective outsourcing makes sense? I think selective outsourcing is the path to take. It's looking at those areas that you can't deliver effectively, or that you can't staff effectively. And you go ahead and partner. We were seeing this a lot in the cybersecurity front.

You can't possibly build up all the capabilities that you need around cybersecurity. Therefore. , people are selectively, , taking services, like the knock. And different aspects of the knock. And they're going, going ahead and giving that to a third-party who can deliver those services better.

, I'm looking forward to parts two and three of what David has to say. , so pragmatic, just, just the list alone. And some of the other things he has to say around it, I think are extremely valuable and I really do value his, , wisdom and experience in the industry. , I've learned a ton from him and, , it's been too long since he's been on the show. I'll have to track him down and see if he's still, , available for the circuit. We'll say.

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