- Understand where the savings could come from
- Establish a methodology for estimating these savings
- Calculate the possible savings for the particular group
Step 1. Understand where the savings could come from
Cost savings can come from anywhere across the system. This includes acute, primary, social, community and mental-health care. For example, in acute care, savings can come from non-elective admissions, elective admissions, outpatient appointments or A&E attendances. The first step for providers is to identify where in the system their savings could potentially come from.
The most likely place for savings to come from integrated care is in non-elective hospital admissions and other acute services. One of the major ideas of integrating care is to shift care from expensive settings, like the emergency room, to cheaper settings, like the home or the community. By adding more preventative support, many integrated care interventions aim to reduce the burden on the acute sector.
Step 2. Establish a methodology for estimating these savings
Once providers have given some thought to where they think the savings could come from, the next step is to actually estimate these potential savings so that they can be compared with the costs calculated in the previous section. There are many methodologies that can be used to estimate savings – robust analysis is likely to draw on more than one. A few of them are shown in the exhibit below.
Step 3. Calculate the possible savings for the particular group
After establishing a methodology and deciding where the savings will likely come from, the last step is to calculate the actual impact. The calculation for this at a high level is shown below.
Total cost attributable to relevant area of saving for the group
Potential percentage savings estimated with chosen methodology
Potential estimated savings