Managing Unit Costs: Bringing Order To The Process

Does your organization know the cost of the units of services provided to consumers—and the factors that drive those costs? For many executive teams, the answer is “no.” And in an increasingly complex reimbursement environment, that creates several challenges.

The first challenge is managing fee-for-service reimbursement arrangements in a time of margin compression. Fee-for-service payment rates have been flat for many services for several years (which means they have declined in real terms). And with the increase in staffing costs and high inflation over the past two years, margins are shrinking. Managers need to understand . . .