Anna Solano

Cost Containment Health care

Cost containment is one of the ways in which healthcare organizations will attempt to control costs within their organizations. Although cost containment can be applied across an organization as a whole, it is most often applied to individual processes in order to reduce costs and increase efficiency. 

Cost containment healthcare identifies areas where costs might arise and mitigates that risk by ensuring the process, department or individual does not exceed established limits. Organizations must be able to identify where the cost is likely to occur and take the necessary steps to ensure the process is as efficient as possible.

The policies and procedures of healthcare cost containment are usually required when a rise in cost becomes too large for the organization. This is often the first technique in an organization's attempts to manage or contain rising costs. Examples of these processes include increased labor costs, increased insurance fees, and increases in maintenance costs (which can result over time from poor equipment maintenance).