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Cost reduction: identifying the opportunities
William O Cleverley1, James O Cleverley
1Cleverley and Associates, Worthington, Ohio, USA. bcleverley@cleverleyassociates.com
Abstract:
Inpatient and outpatient patient-encounter components provide a far better indicator of relative cost position than measures such as cost per adjusted discharge or cost per adjusted patient day. Cost per encounter can be expressed as the product of three key cost drivers: intensity of services, productivity/efficiency, and resource prices/ salaries and wages. Cost reductions result from actions taken in two primary areas: utilization of services and cost efficiency.
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