Hidden Hospital Purchasing Costs

MD Buyline, which offers data analytics and advisory services to help hospitals improve their purchasing decisions, has a new report examining trends in five purchased service categories. They are transcription, linens, clinical services, parking and valet services, and food services. Here is a look at hidden costs in contracts that can be within each service.

Transcription Transcription

Hidden costs may include a surcharge for domestic rather than offshore transcription services and an up-charge that exceeds industry standards for various reports (e.g., pathology). Also, hospitals should follow-up on contract terms that guarantee a portion or percentage of the transcription fee be returned if an agreed-upon accuracy rate is not met.

Linens Linens

Hospitals should consolidate complex pricing terms to a common rate per pound for all linens rather than categorizing by standard and specialty linens, which can result in price gouging. Hospitals should look for hidden replacement cost language (hospital charged a replacement percentage whether or not linen was lost), outdated fuel surcharges (diesel fuel costing more than $3 a gallon), and how linens are weighed either soiled (which typically are 10% heavier) or clean. They also could be subject to non-circulating linen charges if the vendor puts RFID chips on linens sitting on hospital shelves.

Clinical Services Clinical Services

There are bunch of these, such as dialysis providers applying an incorrect patient-to-staff ratio (1:1 when the industry standard exempting emergency and acute cases is 2:1). Perfusion vendors hide charges for equipment or capital costs, cancellation, consumables, holidays and after-hours fees. Hidden reference laboratory costs could include line item charges for delivery, pickup, specific hours, disposal, reporting, supplies, integration with a laboratory information system, and a stat request for quicker turnaround.

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Parking and Valet Parking and Valet

There are two main contract structures for valet under which hospitals pay for the service and it is free to patients and visitors, or hospitals pay an hourly staffing rate and patients/visitors pay a flat fee, and the valet vendor returns a small portion of the flat fee to the hospital. According to MD Buyline, “Within this category, hospitals have not experienced many hidden costs.”

Food Services Food Services

Hospitals should not make capital purchases and modernizations through their food service provider because of high middleman fees. Hospitals also should set a catering budget to moderate the cost of free food at events and in doctors’ lounges.

More information More information

The full report from MD Buyline is available here.

MD Buyline, which offers data analytics and advisory services to help hospitals improve their purchasing decisions, has a new report examining trends in five purchased service categories. They are transcription, linens, clinical services, parking and valet services, and food services. Here is a look at hidden costs in contracts that can be within each service.

 

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