A Category Deep Dive on Dialysis

Dialysis is a necessary procedure that allows nearly 500,000 patientsin the United States with kidney failure the opportunity to live normal, productive lives. The treatment removes waste, salt, and extra water when the native kidneys are no longer able. Though there are several types of dialysis, the most common is Hemodialysis, in which blood is removed from the body, run through a dialyzer, cleaned, and replaced into the body. Dialysis takes three hours to complete and is offered by health systems as inpatient and outpatient treatments.

The federal government pays 80% of all dialysis costs for most patients via Medicare. In fact, the dialysis industry experienced large significant in 1972 when procedures became covered through this program. The industry is run on a for-profit basis, with the market being dominated by two large publicly traded companies known as DaVita and Fresenius. Smaller communities and rural healthcare organizations are more likely to turn to the many local and regional dialysis service providers. Additionally, hospitals or treatment centers must assess the option of operating their own dialysis center for maximum convenience to their patients.

Technology is available to help determine every cost within every purchased services expense category of a health system, revealing massive savings potential in important areas, including dialysis. Here are several factors that healthcare providers should know about dialysis when considering opportunities for savings.

• The Need for Dialysis is Going Up: The number of patients requiring End Stage Renal Dialysis treatment is increasing each year, with mortality rates depending on the treatment. ESRD, or renal failure, is the fastest-growing cause of hospitalizations, and the fifth leading reason for readmissions.

• Dialysis Is a Competitive Business. With multiple options usually available for health systems, it’s essential to ensure your organization has evaluated them all recently. Joint ventures between hospitals or health systems and dialysis providers are common. A patient’s choice in healthcare provider and dialysis company are critical factors in driving usage of centers.

• Savings Opportunities Exist in the Cost of Smaller Purchased Services: Ongoing dialysis treatments can be categorized into purchased services, which is any service contracted and performed by a third party as opposed to the in-house staff at the hospital. Purchased services can account for up to 45% of an average U.S. hospital’s non-labor expenses. However, most health systems continuously tackle savings within the larger categories only, including food, EVS, and blood, ignoring the smaller purchased services categories.

• Categorize the Entire Spend in a System: Without categorizing their entire purchased services spend and prioritizing opportunities, health systems are missing out on addressing smaller categories—including dialysis—that still have large savings opportunities. Why? Without technology, many systems are not able to categorize their entire organization’s spend and prioritize these kinds of opportunities.

Effective Category Monitoring Helps Health Systems Thrive

By prioritizing opportunities and categorizing purchased service costs, health systems will no longer fail to acknowledge dialysis and other smaller categories. Hospitals and healthcare systems using purchased services expense management technology can identify areas of financial improvement in smaller categories like dialysis by utilizing software that not only identifies but breaks down purchased services and reveals a deeper understanding of the overall costs.

Many Americans require dialysis treatment; however, it is an often-ignored category within purchases services that has potential for great savings. At Valify, we offer a breakthrough technology that uses innovative tools to reveal savings opportunities for each expense, saving hospitals 20-30% per purchased service category, on average.

To discover how our technology platform operates, request a live demo at getvalify.com/demo-valify.

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