How LOGEX Costing helps Kainuun sote to achieve transparency of their costs and cost structure
About the client
Kainuu Social Welfare and Health Care Joint Authority, or Kainuun sote, provides social- and healthcare for seven municipalities. Kainuu is the first region in Finland to integrate primary-, secondary- and social care. This type of integration is the basis for sweeping reforms in Finnish Health and Social services, resulting in 21 new wellbeing services counties in Finland in 2023.
Kainuun sote employs about 3400 people and reports operating costs totalling nearly 380 million euros. So far, LOGEX Costing has supported Kainuun sote in achieving transparency of their costs and cost structure, mainly in special care. Our work there has laid the perfect foundation for the future expansion of our collaboration.
The challenge
Kainuun sote wanted to better understand the cost associated with catering and specifically per catered item. Doing so would help make better decisions around what to produce in-house and what to have catered for by external providers. Compared to the cost of treatments in special care, catering might not seem the natural starting point for meaningful efficiencies or cost savings. However, support functions can often respond quicker to the need for efficiencies than other departments. Furthermore, opportunities to improve costs often highlight actionable operational changes that are easier to implement than changing treatment or physician behaviours. After all, achieving efficiencies by changing part of the catering supply chain is less controversial than asking a surgeon to change their working methods when in theatre.
That is not to say that medical leaders were not involved in the process. To get the transparency that Kainuun sote was after, they also described the cost of their care pathways.
Cost information is important for opening up discussions about care paths and processes with the medical leaders and hospital high-ups. Accurate cost information is crucial when deciding, for example, the frequency of providing real breast milk to newborns. If you suggest reducing the frequency, you might run into strong resistance based on feelings, so you need data to back up the suggestions for decision making.
Minna Haverinen, Service manager of Kainuun’s catering services.
To increase the impact of their work, Kainuun sote also aimed to benchmark catering costs with other hospital regions. Although the available data did not allow them to do so, the Kainuun sote approach can now be used as a blueprint for other units. Many of them are LOGEX clients that have not done calculations for catering yet, we are set to use the expertise and knowledge gained to build to scale.
The solution
With the implementation of LOGEX Costing, Kainuun sote can now calculate new areas of functions and determine calculations and activities. The biggest benefit has been when multi-professional teams, together with LOGEX experts, have sat together in workshops to look at the figures and trace the origins of costs.
Transparency and traceability were seen as really important features in Costing. “We need the ones who know the solution, we need those who know the calculations and the subject experts to come together to evaluate the findings,” according to Minna. According to Taneli Pikkarainen, who works as a financial planner and is our main contact, LOGEX Costing is a good solution when expanding to other units, as it is so easy to manoeuvre. Both Minna and Taneli are clear: projects like these would not be possible by using only spreadsheets.
LOGEX Costing provides them with a tool where they can easily combine data from different legacy systems, like SAP and Jamix, which is an application for foodservice operators, for calculating product-specific cost of production.
Financial Control
Our Financial Control suite enables you to gain mastery over patient volumes, resources and finances for the entire organisation, leading to better financial performance—with the numbers to prove it.
We cover the full spectrum of financial and operational processes, from costing and budgeting to forecasting and contracting.
Our activity-based costing model empowers you to:
Calculate, apply, and optimise
Make cost calculations for healthcare providers that are easy to understand, apply, and optimise.
Maximise the flow of resources
Allocate resources and costs to patients, care activities and episodes.
Benchmark and improve
Benchmark unit costs with national and international peers to identify areas for improvement.
Deliver, regulate and meet standards
Deliver information to national regulators automatically and in full compliance with National Cost Collection requirements.
Our activity-based budgeting model makes it possible to:
Build and benchmark budgets
Seamlessly link volumes, resources and finances in one budget.
Anticipate and respond to future demand
Match the deployment of resources and manpower to the future demand for care.
Zero in on areas for improvement
Determine how portfolio choices impact operations, and spot areas for improvement.
Involve physicians and managers in budgeting
Bottom-up budgeting functionality facilitates collaboration with non-financial stakeholders.
Our forecasting model enables you to:
Forecast and monitor volume, revenue and cost
Stay on top of expected vs. realised volumes, revenues and costs on a near real-time basis.
Analyse and factor risk into payer contracts
Automate value-at-risk calculations for all contractual agreements with commissioners.
Leverage machine learning algorithms
Build and maintain reliable, easy-to-access forecasts based on machine learning algorithms.
Produce timely, compliant reports with ease
Deliver periodic financial results that are fully compliant with national regulations.
Bring down costs by providing the right treatments, at the right time. We help you take the first step, starting with a critical assessment of treatment options and care processes.
Reduce variation among physicians and providers
Identify unwarranted variation in treatment decisions and care processes.
Deep-dive into data adjusted for meaningful differences
Compare disease-specific peer group selections adjusted for case-mix, patient characteristics and complexity scores.
Elevate commissioner contracts from volume- to value-based
Establish objective indicators to qualify for innovative value driven contracts with commissioners.
Benefits
Overall ease of use
Simple navigation with a full audit trail integrated analytics and benchmarking. No need for internal SQL skills. Costing practitioners and Trust colleagues can focus on engagement and identifying performance improvement opportunities
Hosting
- Fully hosted and secure
- No need to rely on internal IT infrastructure and resources or invest in expensive infrastructure
Engagement
- Integrated analytics so less reliance on Trust-wide BI infrastructure
- Unlimited use
- Full access control
- “Live” system enables use in meetings
Pricing
- Fully inclusive annual subscription with no hidden extras
- All Technical Consulting support included
- Unlimited use included
- Analytics included
Speed
- Fast set up and model build
- Make changes live and use for discussion in meetings
NHSI submission requirements
- Easy visualisation of how your costs relate to NHSI categories
- Automated submission outputs
Implementation
Fast turnaround with limited input required from the Trust team
More value from Costing data
- Use costing data and methodology for budgeting, forecasting, and costing care pathways
- Fully integrated financial management control platform
System working and benchmarking
- Easily configured to support group working
- Integrated benchmarking to identify performance improvement opportunities
The impact
The most tangible results include a new price list for the catering function, based on vastly improved insight into costs associated with catering, and plans to optimise the catering delivery using accurate costing information. However, the biggest impact of this project might well be the fact that there is now a queue outside Taneli Pikkarainen´s door with units that are eager to have their cost correctly calculated.