Show IHC saves over $25 million a year through group buying power alone Here’s how IHC fights to loiver the cost of health care Achievements at IHC Cost-Cutti- ng he board and employees of IHC’s facilities understand I I and share the concerns I I about high health care costs and they’re attacking the cost issue on several fronts - and winning For example IHC is able to save over S25 million a year through centralized services alone while continuing to provide quality I I JL medical care Here are some of the ways IHC is working to keep the lid on costs: 1 System-wid- e Savings an integrated system of hospitals and medical care facilities IHC can take advantage of economies of scale and other benefits to lower costs For example: Health screenings Centralized management Centralized services By In 1975 IHC joined multihospital organizations in establishing Multihospital Mutual Insurance Ltd (MMI) This insurance comother liability coverpany provides high-levage for hospitals clinics and physicians Through MMI IHC saves over S3 5 million in premiums annually 2 IHC’s IHC is QUE studies many patients locally In many cases load medical care avoids transportation costs by treating problems on the spot a major source of Quality Utilization 3 and Hospital” Mean? “Not-for-Pro- flt “non-profit- An Ounce of Prevention Early medical intervention in an illness costs far less than treating an illness in its Three different in managed health care plans help employers and employees reduce the cost of medical care ra quality improement while eliminating inefficiency and waste (or Health Plans choices tinuous “Not-for-prof- it Managed Care IHC Efficiency (QUE) studies help assure con- What Does rural hospitals and neighborhood clinics such as InstaCare are able to treat hospital” means that the primary purpose of the ”) hospital is to serve the community There are two common misconceptions about hospital organizations: They don’t receive money for the services they provide and 2) They don’t have money left over after they meet expenses Neither of these assumptions is correct Any organization whether or nonto has That and a means exist to run on budget profit collecting disbursing money needs to take in more or non-prof- it Similarly any organization whether money than is spent as a safety net to cushion against unexpected expenses and to allow for modernization This safety net is called a “margin” A main difference is in the size and use of the margin hospital companies must provide a competitive return to stockholders from their margins in addition to providing reserves for the future They have an incentive to maximize their margins hospitals exist to provide services to the community and set their margins as low as possible yet sufficient to continue serving hospitals set their rates to break even over the long run allowing for inflation growth and modernization hospital organizations also act differently They undertake many prothat are not economically justified but that are important for the community jects it Another difference is that hospitals hospitals pay taxes while do not Local and federal governments recognize the unique contributions to the comhospitals and do not require that these institutions pay taxes munity made by non-prof- it IHC’s hospitals would have paid about J51 million in property taxes in 1988 if it were a company In dial same year IHC hospitals provided more than $ 8 free million in charity care alone and their total contribution to the community amounted to over 150 million not including an additional J15 million which IHC has donated to the IHC Foundation in 1988 and 19891) for-prof- it for-prof- it coordinating services throughout the IHC system IHC can maximize use of existing services and avoid duplication of services For example laundry services located at one facility can handle the laundry requirements of several facilities More will be done in this area in the future Self-insuran- ce Rural and local health centers health information for the Intermountain West As an integrated system IHC avoids redundant layers of management in its various facilities Restructuring to save costs and maximize efficiency is an ongoing process recently an entire layer of senior management was eliminated Individual facilities screenings Education equipment may be high rt the equipment ultimately pays for itself by treating or diagnosing patients more effectively sponsor numerous free health screenings every year from cholesterol measurements to cancer tests In addition the system sponsors numerous region-wid- e As Volume buying IHC negotiates volume discounts by buying supplies on a large scale This buying power applies to both goods and services High tech diagnostics and treatments Although the initial cost of advanced stages One of the major ways IHC works to lower medical costs is in emphasizing prevention and early detection of disease in the following ways: For-prof- it for-prof- for-prof- it - Alary Ann Washington directs environmental services — a centralized service of IHC |