South Florida Hospital News
Monday May 25, 2020
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November 2014 - Volume 11 - Issue 5

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Telecom Audits Saving Hospitals Up to $100,000 a Year or More

All healthcare systems constantly juggle cash flow management, waste elimination and maximizing profits. Despite an influx of patients coming through your doors and monthly revenue growth, your hospital or practice might struggle to make a healthy profit. One likely reason is that you are not managing your expenses optimally.
 
According to Ken Reda, managing partner for Profit Advisory Group (PAG), a full-service telecommunications consulting firm based in Charlotte, NC, two common oversights among line item expenses are telecommunications and IT.
 
“About 80 percent of a hospital’s telecom and IT-related bills contain hidden costs and errors which can cost you thousands annually,” said Reda.
 
For example, cellular plans, web-based conferencing and mobile applications often have new add-ons or features necessary to improve efficiency or comply with federal health regulations. One problem is these features are approved without removing an older or outdated feature. As a result, many organizations are paying for two versions of the same add-on.
 
It’s easy these days for telecom and IT invoices to be overlooked, Reda noted. “With IT and telecom staff being cut back at many hospitals, most managers don’t have the time to review these bills looking for overages and redundancies.”
 
He added that telecom vendors spent years working to make their invoices as confusing to read as possible. “It’s hard enough for experts to find errors with that being their sole focus, so the telecom and IT staffs are not at fault.”
 
That’s where Reda’s firm comes in. PAG specializes in cost reductions in the healthcare and educational fields. It conducts a telecom audit in a 60-to-90 day period during which it fully reviews an organization’s telecommunications and IT expenses.
 
“We’re doing a deep dive into your expenses and looking line-by-line to see if you’re getting charged correctly,” said Reda. “We also use our collective 100 years of telecom and IT experience among our staff to make sure we find every little penny.”
 
A standard telecom audit generally includes:
• Expert review of every line item on your invoices
• Thorough comparison of charges to contract and billing tariffs
• Identification of any billing mistakes
• Identification of under-used (or unused) services
• Identification of any credits/refunds due from your carrier
• Complete inventory of all lines, circuits, wireless devices and features across the enterprise
• All services properly assigned to correct cost centers
• Understanding of all existing contracts, what commitments are, and when terms expire
• Development of a formal contract strategy
• New contracts entered which level the playing field regarding terms and conditions
• Thorough review of procurement policies for telecom-related orders (including disconnections)
• Suggestions for procurement policy revisions to eliminate potential breakpoints
• Blueprint for future vendor accountability reviews to ensure proactive management of services
• Price points, correct billing, etc. so that corrections put into place stay correct moving forward
• Negotiations for customizing telecom contracts
 
During these audits, PAG aims to reduce costs in these four areas: monthly recurring charges; telecom overage charges; third-party billing; and unused features. After the audit, PAG presents its findings and offers recommendations. If the hospital wants to proceed, PAG will implement the recommendations and track them over the next 12 months.
 
“We stay involved with our clients for over a year which is different than most companies in our space,” said Reda. “Oftentimes, companies will go in, conduct an audit, send the bill and they are gone. We stay involved to make sure our recommendations are in place and working for a solid twelve months.”
 
In a typical PAG audit, clients recover up to two months of expenses in refunds and receives an overall reduction of 23 percent of the telecom spend. It also charges based on a percentage of savings, so they don’t pay any money out of pocket.
 
“We’ve heard from many hospital CFO’s that we helped save jobs as a result of our audits,” said Reda. “Many of these hospitals are nonprofit, so if we can ultimately save them between $70,000 and $100,000 annually, that’s a nurse-and-a-half depending where you are in the country.”
 
Lesli Kennedy, associate vice president of case management for McLeod Health in Florence, SC, said her healthcare organization’s annual telecom expenses were over $1.5 million before approaching PAG. After PAG’s audit, McLeod reduced its overall annual expenses by more than $500,000 and obtained a six-figure refund for previous overcharges.
 
“I recommend Profit Advisory Group without hesitation,” said Kennedy. “Allocating costs and budgeting across a five-hospital system is now simple. They were responsive when we had questions and their staff was courteous and professional. We needed their help and they delivered.”
For more information on how your hospital can save money with a telecom audit, contact PAG at 1-888-943-1235 or visit www.profitadvisorygroup.com.
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