Podcast Summary

Podcast: Becker’s Healthcare Podcast

Episode: Unlocking ROI in Healthcare Operations and the Role of Expenses vs. Investments
Date: October 22, 2025
Host: Erica Spicer Mason
Guest: Ryan Spalding, Consulting Partner at ERA Group

Episode Overview

This episode explores how healthcare organizations can unlock hidden return on investment (ROI) in their operations by focusing on non-labor expenses, distinguishing between necessary expenses and strategic investments. Erica and Ryan discuss practical strategies for cost optimization that don't compromise patient care or risk staff satisfaction. Ryan shares industry insights, real-world examples, and actionable recommendations for C-suite leaders navigating financial pressures in a challenging healthcare environment.

Key Discussion Points & Insights

1. Introduction to Ryan Spalding & ERA Group

• Ryan works with FQHCs, senior living providers, and large hospital systems to uncover savings in non-labor expenses, including medical supplies, pharmacy, IT, telecom, and insurance.
• He positions himself as an extension of the hospital team, aiming to "uncover hidden margins and opportunities" without touching clinical workflow (00:48).

2. Major Challenge: Fragmentation of Non-Labor Costs

• Healthcare costs are often fragmented, managed across various departments and long-standing contracts—making optimization difficult.
• Leadership rarely has full visibility, and many assume they've already negotiated optimal contracts, especially when group purchasing organizations (GPOs) are involved (02:24).
• Quote:
  "The biggest challenge is really fragmentation. Costs are scattered across various departments, often managed under different long standing contracts that maybe haven't been revisited in a long time."
  — Ryan Spalding [02:29]

3. Deep Forensic Review and Benchmarking

• ERA Group benchmarks contracts not just against industry averages but against real-time market conditions.
• Ryan illustrates with a Methodist retirement community client: despite a good GPO and confidence in their cost management, ERA found $300,000 in annual savings without changing vendors (02:53).
• Quote:
  "We were able to come in and find over $300,000 in annualized savings...all that without switching vendors."
  — Ryan Spalding [03:21]

4. Overcoming the Fear of Supplier Change

• Many leaders fear cost-cutting means disruptive supplier changes ("tightening the belt").
• In reality, about 60% of savings come from better terms with existing suppliers (04:33).
• Category specialists with deep expertise in areas like pharmacy and telecom bring knowledge beyond what internal procurement teams can typically access.
• ERA Group provides broader leverage and current market intelligence from hundreds of clients and decades of staff industry experience.
• Quote:
  "Roughly 60% of the savings we find come from renegotiating better terms with the existing supplier."
  — Ryan Spalding [04:39]

5. Supporting Patient Care and Workforce Investments

• Many leaders want to invest in technology, workforce pay, and patient care, but fear risk, like vendor changes.
• Ryan recommends starting with areas that don't impact clinical experience—“non-glamorous” categories like telecom, merchant services, insurance, and document storage, which often offer ample savings opportunities (06:50).
• Treat cost optimization as a strategic growth lever rather than a one-off fix—freeing up funds enables innovation, hiring, and quality improvement.
• ERA Group’s contingency fee model means no cost to the provider unless savings are found, removing risk from the equation.
• Quote:
  "Treat cost optimization as a strategic growth lever, not a one time fix."
  — Ryan Spalding [07:27]

6. The Value of a Second Set of Eyes

• Even the most well-run organizations are likely overspending somewhere due to healthcare’s inherent complexity.
• It’s valuable for leadership to invite external experts to revisit contracts, especially after major events like audits or when instinct suggests untapped savings.
• Quote:
  "Even the most well run healthcare organizations are likely overspending somewhere. Not because they're doing anything wrong, but really the system is complex and constantly changing."
  — Ryan Spalding [08:50]

Notable Quotes & Memorable Moments

• On Hidden Opportunities:
  "Our job is to bring some clarity, find dollars you didn't know you had, and give you back a little bit of that breathing room that is already pretty tight to begin with."
  — Ryan Spalding [09:29]

• On Taking a Fresh Look:
  "If you're feeling the pressure but unsure where to find margin, that's a sign. It may be time for a second set of eyes to take a look."
  — Ryan Spalding [08:56]

• On the Scope of Savings:
  "...categories like telecom, merchant services, insurance, even document storage. They're all non glamorous things to talk about, but they're high opportunity to find some of that hidden margin..."
  — Ryan Spalding [07:03]

Important Timestamps

• [00:48] — Ryan introduces his role and approach
• [02:24] — Discussion of healthcare cost fragmentation and challenges
• [03:21] — Example of $300,000 savings found for a client
• [04:33] — How forensic reviews differ from internal procurement
• [06:50] — Aligning cost reduction with strategic investments
• [08:49] — The call for a "second set of eyes" and final takeaways

Final Takeaways

• Partnering with external specialists can reveal hidden savings without disrupting clinical care or necessitating supplier churn.
• Cost optimization should be an ongoing, strategic effort enabling investment in patient care and staff support.
• Even high-performing organizations benefit from an outside perspective, especially as the healthcare landscape evolves.

For more episodes and insights, visit Becker’s Healthcare Podcast at beckershospitalreview.com.