In the uncertain wake of healthcare reform, company CEOs need to do what they can to “heal thyself”

Originally published in the February 2011 issue.

Nearly a full year after federal health reform legislation passed Congress and was signed into law by President Obama, the controversies – and the court fights – continue to pile up. Just a few days ago, a federal judge in Florida ruled that the so-called “individual mandate” that would require most Americans to buy private health insurance is unconstitutional.

The ruling comes on the heels of a similar ruling by a Virginia judge in December.  Unlike the judge in Virginia, however, the Florida judge also ruled that the entire healthcare reform legislation must be nullified.  Almost certainly, the judgment will be appealed, then appealed again, and ultimately wind up before the U.S. Supreme Court.

Currently the heavy betting is that the decision will split evenly along ideological lines, with the four more liberal justices supportinghealthcare reform and four conservatives voting against – and with Justice Anthony Kennedy swaying the balance.

In the meantime, organizations across the country are struggling to continue to provide healthcare benefits to their employees – or are choosing to drop coverage that they can no longer afford.

Win or lose, the financial stakes for any organization offering healthcare benefits to its employees – let alone hospitals and insurers — could be huge.

But any Supreme Court decision is not likely to occur until June 2012, so what should CEOs and CFOs be concerned about in the meantime?

Looking Within.  In these days of continued economic uncertainty, soaring insurance costs and the ongoing debate over the viability of healthcare reform, the pressure to “do more with less” has never been greater.

More and more organizations have begun to take a hard look at their organization-wide spending and determined they needed to get more control and coordination into that process.   But how best to do it?

Frequently, there is a natural tendency to begin going down the path of hiring and developing an in-house procurement team that eventually might be able to develop sufficient expertise – in a relatively short amount of time — to review, assess and manage the sourcing process on behalf of the company or organization.

In this case, however, “might” doesn’t necessarily make “right.”

There is a better alternative – and it’s a solution that organizations in any industry can utilize to their advantage.

Experience for Hire.  The good news is you don’t have to build that kind of cost-savings program from scratch.  By working with an experienced and effective sourcing and procurement consultant, a company can bypass the inherent learning curve, hiring of these resources and timeline that such an effort would require and begin realizing cost savings and increased efficiencies from the get-go — savings that can be incredibly lucrative.

At Source One, we’ve worked with hundreds of companies over the course of nearly 20 years, including some of the biggest players in the healthcare industry.  Over the course of that time, our firm has negotiated with more than 7,000 suppliers in over 100 different categories of spending – and helped our clients achieve across-the-board savings of 18% on their direct and indirect spend budgets.

We do this by working closely with corporate administration and staff, existing vendors and suppliers to evaluate spending activity, streamline supply chains and achieve the highest level of quality possible at the most reasonable cost.

Synchronized Incentive.  Furthermore, we have a built-in incentive to help organizations realize maximum savings, because the only fee we charge is a percentage of the savings we actually achieve.

For the company CFO looking to get a handle on his organization’s healthcare spending, as well as other overhead costs, the bottom line is
clear.  There is no risk, no overhead, and no new investment required – only a real desire to find a truly effective and manageable way to “do more with less”   In these challenging and uncertain times, it’s an option many companies quite literally can’t afford to overlook.

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