Taking a scalpel to high health care costs

Consulting company focuses on comprehensive savings strategies for hospital clients

NJBIZ STAFF//May 30, 2011//

Taking a scalpel to high health care costs

Consulting company focuses on comprehensive savings strategies for hospital clients

NJBIZ STAFF//May 30, 2011//

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George Malik has spent 30 years cutting costs in the health care industry, but even he gets caught by surprise sometimes — like when he discovered an application he had downloaded for his mobile device came with a monthly fee.

“To be honest with you, at a previous job I had an app that I didn’t know the organization was paying for,” said Malik, chief operating officer at Wall-based Vie Healthcare. “I thought it was a free app, and here the organization was paying every month.”

Vie Healthcare, a division of Vie Partners, specializes in non-labor cost-reduction strategies for hospitals and other health care providers, typically working with a client for 12 to 18 months to implement a comprehensive savings plan. The company was founded 12 years ago, and today works with about 45 percent of the state’s hospitals, in addition to clients outside the state.

Malik, who joined Vie earlier this year, said the approach is to dig beyond surface-level savings, such as negotiating lower price-points on high-dollar devices. Comparing prices to national or regional benchmarks is an important part of the company’s work — but so are more unique services, such as comprehensive contract reviews that have turned up “credits that were owed to an organization that were not yet applied,” he said.

In those cases, Vie will work with the client to recover those fees from the contractor. Clients pay Vie on a monthly basis based on a percentage of their cost savings.

Vie prides itself on being up-to-date on the latest cost-saving and purchasing trends in the industry, so Malik said he’s regularly on the phone with colleagues and business associates trying to find out the latest trends in health care cost reduction. He also reads a lot; Vie’s founder and CEO, Lisa T. Miller, makes sure of that.
“I get weekly reading assignments,” Malik said, noting the packed bookshelves lining the company’s conference room walls. “Everyone on the team does, so she is very intense on making sure that we keep up with the latest trends in the industry.”

Malik said the company often learns of cost-saving strategies that are emerging in other parts of the country.
One example, he said, pertains to radiology costs. Physicians generally receive a professional fee to read a patient X-ray, but Malik said in recent years, many radiology departments began using overseas doctors who could read the X-rays overnight. The American doctors would then come in the next morning, certify the readings, and send the results along to patients.
“The hospital was grateful in the early days to have that service, because it meant they could get patients out of the ER quicker, and it meant that they could possibly discharge patients quicker,” Malik said.

But that quicker service came at a price. Doctors were still paid the professional fee, but they also passed the overseas doctors’ fees along to the hospital. To make that fee go away, Malik said, hospitals can use overseas doctors who are licensed in the United States, and thus can read and certify the X-rays, thus cutting out the middle man.

“But not every hospital is aware of that strategy,” he said. Still, he’s not hesitant to disclose that tip, as Vie has found giving away what some might consider trade secrets actually leads to new business.

The company has held free cost-reduction seminars, and will next month launch a new online certification program for hospital cost reduction specialists.

“When we started to run the seminars and the training programs, we had no idea that it would lead to customers actually calling us because they need the additional resources,” he said.

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