Medicare’s national pricing has providers tightening their belts (Should you be getting lean?)

Further reimbursement cuts are expected when Medicare implements its national competitive bidding pricing on January 1st of next year. Liz Beaulieu of HME News reports, “For an idea of what providers are grappling with … the new pricing for oxygen concentrators would be $86.36 per month, a 47% reduction, if the town is considered a standard MSA, and $77.94, a 43% reduction, if it’s considered a rural area.”

Shrinking margins aren’t new to healthcare providers and specialty pharmacies, and while some have taken steps to reduce costs, like limiting the number of brands they carry per product category and favoring less costly options, many are considering more holistic approaches like becoming a lean organization.

You’ve most likely heard of “lean manufacturing”, but you may not be aware of how these principles can be applied to any organization, including service-based companies, to drive efficiency and cost reduction without negative impact to your patients.

Briefly, the core idea of lean is to maximize customer value while minimizing waste through continuous improvement across value streams. There are three areas of focus that enable this: Purpose, Process, and People.

Purpose: What customer problems will the organization solve?

Process: How will the organization assess each major value stream to make sure each step is valuable, capable, available, adequate, flexible, and that all the steps are linked by flow, pull, and leveling?

People: How can the organization insure that every important process has someone responsible for continually evaluating that value stream in terms of business purpose and lean process? How can everyone touching the value stream be actively engaged in operating it correctly and continually improving it?

Lean is a big topic and we certainly can’t tell you everything you need to know to successfully implement it. However, in our next two posts we will cover lean principles and getting started with lean in enough detail to help you evaluate whether this approach may be the right one for your organization.

Subscribe to our updates to make sure you don’t miss them!
[contact-form-7 id=”667″ title=”RWMB-News Opt In”]

Snap Medical - PR photo
Snap Medical Products
RWM-CLYS inside
Medical Supply Kits
RWM Custom Product
Right Way Medical Products
Cleanroom Supplies
High Quality Disposables
Scroll to Top

Prior to founding Right Way Medical, Prati held various roles with Apria Healthcare, B. Braun Medical, and Medical Technology Resources, where his final role was Sr. Vice President of Sales and Operations. During his time serving at Medical Technology Resources he was influential in assisting in its acquisition to Medical Specialties Distributor, a company that has since been acquired by McKesson in 2018.

Prati has been involved in various philanthropic organizations including The Make-A-Wish Foundation, A Kid Again, Orphan’s Promise and has served in various board and volunteer roles at Cypress Wesleyan Church (Alton Darby and Dublin campuses) and the Vineyard Church of Columbus.

Josh Prati resides in Powell, Ohio with his wife Christa and two cats, Remey and Molly. He enjoys working out, developing relationships over a home cooked meal, great wine, and is an avid Ohio State Buckeye and Pittsburgh Steeler fan.