UC Health’s Leveraging Scale for Value initiative, launched in 2014, built momentum in its first year and continues to ramp up its efforts. The program aims to save at least $150 million a year for the next five years with UC medical centers collaborating to increase efficiencies in revenue cycle, supply chain, clinical laboratories and information technology.

“We are taking advantage of the scale of UC medical centers,” said Dr. John Stobo, UC Health executive vice president. “These collaborations are not only reducing costs but also inspiring better care and new ways to work together that will improve health.”

In the rapidly changing and complex era of health reform, hospitals face pressure to be more efficient. UC Health undertook the cost-saving initiative as projections showed that, without action, UC medical center expenses could exceed revenues as soon as 2017. The initiative is helping enable UC’s self-supporting $8.6 billion clinical enterprise to continue to provide educational support for UC’s medical and other health professional schools, fulfill its public service mission, and maintain quality in a competitive health care market.

The cost-saving changes have started small but are adding up at UC’s five medical centers — Davis, Irvine, Los Angeles, San Diego and San Francisco.

Revenue cycle efforts, chaired by UCLA Health chief financial officer Paul Staton, generated value of more than $20 million in fiscal 2015 and are projected to expand in 2016. A number of targeted process improvements have been implemented at each medical center to enhance operational performance such as tracking progress of accounts and monitoring backlogs.

In supply chain, a UC Irvine group working on the procurement of blood shared best practices on its blood utilization efforts. The practices were adopted by other UC medical centers and resulted in more than $2 million in savings for blood products in fiscal 2015.

At UC Davis, the burn intensive care unit and procurement teams collaborated to improve how they utilized and stocked supplies. Nurses visited the distribution supplier and made suggestions to realign the supply cart so that items would be easier to find, enabling them to treat more burn patients. They also added price labels on linen carts, which raised awareness and reduced costs as workers have used linens more efficiently. Next steps include implementing similar improvements across UC Davis and expanding efforts to other UC medical centers.

“They’re little things. They create momentum. Everybody is a change agent. They become believers,” said Pat Knight, UC Health chief procurement officer.

This is an edited version of a story originally published by the University of California Newsroom.