As Washington wrestles with reforming the healthcare insurance system, The Center for Modeling Optimal Outcomes® LLC, a Jackson, NJ-based think tank, developed an organizational operating model that focuses on eliminating inefficient processes and wasteful spending.
The Center's portfolio, which consists of a variety of process models and services, is available for industry-wide adoption and implementation.
Founded by one of the nation's leading healthcare expense management experts, William J. McFaul, and fortified by a diverse team of clinical and operational staff and advisers, The Center created and developed a series of cost-reduction and management service lines designed to generate meaningful and realistic reductions in operating expenses, as well as a series of clinically focused specialties geared toward improving patient outcomes.
Based on a random sampling of published data from 50 hospitals and health systems conducted by The Center, McFaul's team identified a number of factors that indicated the percentage of total hospital spending attributed to non-payroll expenditures is far greater than previously thought. The Center can work with other hospitals and health systems perform their own similar studies.
"When I worked with the Department of Health in New Jersey during the DRG experiment in the late 1970s we found the percentage of non-payroll expenses was in the range of 40 percent to 45 percent," McFaul noted. "Our recent analysis indicates that today the number is as high as 57 percent. Adjusting for a few non-controllable factors such as regulatory and licensure fees, interest, depreciation and capital related costs, we feel it is safe to use a range of 50 percent to 55 percent."