I’m sure that spiraling prices (gas, food, plastics, chemicals, etc.) caught us all off guard because we didn’t see it coming. Or at least made us aware of how fragile price stability is no matter how good you are at negotiations or how many group purchasing organizations you belong to.

The good news is that prices are beginning to stabilize somewhat this year, but that’s not the answer to our price dilemma since we have all seen that our GPOs are sending us more price increases than price reductions over the last 12 months.

It’s now time to offset your price increases by counter-balancing them with new savings strategies that aren’t affected by inflation if you want to meet your savings goals year after year. As one material manager told me the other day, he is "tired of squeezing blood from a stone." That’s why he is now looking for new ways to save beyond price.

Here are five surefire savings strategies beyond price that can yield you an even better return-on-investment on your time and in your efforts to quickly overcome price shortfalls in any given year:

1. Develop specifications on all your purchases. Buying by brand name product is the fastest way to have a bloated supply budget. A much more scientific and cost-effective way is to actually write functional specifications for what your customers absolutely, positively require. You would then search out a match to these requirements with your GPOs, manufacturers or distributors to dramatically reduce your supply chain expenses that now won’t be feature rich or over or under specified.

2. Target your utilization misalignments. Seventy-nine percent of all of your new savings opportunities are hidden in the utilizations of the products, services and technologies you are now buying. That’s why you need to look beyond price and start to pay serious attention to how your products, services and technologies are being employed by your hospital staff, since these savings are just waiting to be harvested.

3. Perform contract value analysis. It has been my experience that there is a whole lot of fat in healthcare organizations’ purchase service contracts that needs to be squeezed out. Case in point! A 350-bed hospital we are working with just uncovered $1.9 million in purchase service savings that no one knew existed because it wasn’t on their radar screen. That is why you need to perform contract value analysis on all contracts over $25,000 to quickly reduce your purchase service cost and improve your hospital’s bottom line.

4. Incentivize your VA teams to save more. Incentivizing your value analysis team(s) boils down to this essential unassailable fact, "Everyone wants to win. And if you create a good competition, everyone will try hard to be in the winners’ circle," says Henry Canaday. That’s why it is vital that you reward your value analysis team(s) for their achievements in order to create excitement, competition and ultimately better savings performance.

5. Ferret out even more PPI savings. There are still more double digit savings available in your physician preference items if you look at the patterns, trends, and the variations in your surgeons’ practices. To put it another way, if you just have your surgeons actually conform to the medical requirements of their patients you can save hundreds of thousands, maybe even millions annually.

These five surefire strategies represent just a few ideas that are available to you to counter-balance your price increases now and in the future. As a client said to me the other day, "today’s savings shouldn’t be all about price, raising cost must be offset by other strategies" if healthcare organizations are to survive and thrive in this new healthcare economy.

All of your savings shouldn’t be all about price if your hospital is to keep pace with inflation in this new healthcare economy. That’s why you need new savings beyond price strategies, tactics and techniques to propel you in a new direction that will save you millions, and won’t be affected by current or future inflationary factors. If you accept this insight as fact, you can continue to generate significant supply chain expense savings every year, while everybody else is hitting the wall on price.