Chair Lee on H&H contract renegotiations and technology
Lee asks about contract savings and in-house versus external services. CFO Olberg explains they frequently renegotiate contracts with vendors, leveraging H&H's nearly $13B enterprise scale, and are targeting $100M in additional savings. AI is being explored for denials and efficiency.
And then speaking of contracts, which contracts were part of the savings exercises?
And in general, how often does H&A?
H look into the contracts for funding efficiencies.
John?
Yeah.
Good afternoon.
Good afternoon.
Yes, this is also, as Mitch had mentioned, just part of our normal course of business to make sure that the contracts that we have with a wide variety of vendors are giving us a fair price.
So we frequently, as the contracts expire, will go back.
And that could be a host of supplies and services that are delivered at health and hospitals by outside vendors.
Okay.
And then how often do you look at them, and are there areas of where maybe it would make more sense to bring them in-house versus doing it externally?
Yes, we're always looking for the cost benefit of doing something in-house versus hiring it out.
We also take advantage of, you know, we're almost a $13 billion enterprise.
And I think as we learned over the years is that we have a certain amount of leverage in terms of how we purchase, right?
So we take advantage of that.
Contracts are different.
Some, when they expire, give us the opportunity to go back and renegotiate.
There could be certain situations where we may say we're not satisfied with this price.
So it's an ongoing effort, especially with our larger vendors, and we've been pretty successful at that, and we're actually trying to line up.
Perhaps we're looking forward to this year and the following year, because as Mitch mentioned, we have pretty sizable deficits in those out years, but we've targeted a $100 million savings target on top of what we've
you know, provided here.
That's amazing.
Yeah, because I've brought this up in other hearings as well, where as a city we have tremendous buying power, and so if we can leverage that in any way, we should definitely look into that.
And has technology helped at all with that in terms of streamlining, cutting costs, and those types of things?
Certainly.
We're always looking for that opportunity.
And certainly the world of AI is a whole other new environment for us, but we look at that in terms of ways to maybe more effectively deliver care.
And as Mitch had mentioned, with denials, we're starting to explore perhaps using AI technology with that.
I know on the clinical notes and all of those things, it's helped a lot of folks be more efficient.
So that's great.
Okay, perfect.