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CASE STUDY

HOW A HEALTH SYSTEM SAVED MILLIONS OF DOLLARS

Unnecessary services, poor rental and lease terms meant
the customer was losing money on its technology portfolio.

One of our customers is a health system that needed to upgrade nearly a thousand medication-dispensing cabinets for its various healthcare facilities and thought the current vendor-sponsored rental program was the best way to go.  It appeared EASY, as the vendor said they would account for all the assets, both for removal and new deployments.  But upon a more detailed analysis of the vendor quote and terms by CHG and client stakeholders, it was clear, EASY was very COSTLY.   

As CHG-MERIDIAN set out to get a full accounting of the cabinets our customer was using, we reviewed the contracts that the cabinet vendor had provided. This vendor was not transparent when it came to the terms of the rentals/leases, and it took our experts months to gather all the relevant information from the existing six-year-old portfolio of assets to match against the proposed replacements  This was in large part due to the fact that no one from either the vendor or the client remained from the previous order six years prior.

Once we had compiled the necessary details, we found that this particular health system was paying for a range of services that added to its bill without adding value. In a few instances, our client was paying for rent and maintenance for assets that no longer existed, as well as paying for other unnecessary services. Additionally, the incumbent vendor failed to account for more than $800,000 in assets owned by the client and only addressed assets “under rent.”  As a result, it skewed the RFP and was disruptive to the budgetary process.

After completing this thorough accounting, we created a roadmap for the health system to get the most value from its investment. We replaced vendor leases with customized financing inclusive of TLM and contract management and were able to save this customer millions of dollars.  These savings were created by a granular accounting of the project installation process and a flexible financing matching the lifecycle of the asset.

This health system no longer pays for services it doesn’t use and no longer pays high monthly rates for its medication-dispensing cabinets. CHG-MERIDIAN did more than sketch out a roadmap for optimizing the investment in technology – we implemented the plan side-by-side with the customer.  The client gained a “client-centric financing” truly saving millions as opposed to settling for a vendor “stockholder-centric” high-rate model.

CHG-MERIDIAN’s asset discovery process is the first step on the road to an optimized technology portfolio, and it’s a step we have taken with customers many times.

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