Passageways Blog

Like every other business, hospitals need to make money. Yet most of them have been the slowest to realize that they are not an amalgamation of small sections, but enterprises that need to utilize their size better and get more efficient to become more successful. No other industry could survive with the kind of margins that hospitals make, but they can't afford to charge patients more. The only option:  have less cost.

Hospital woes are low margins, increasing receivables, reduced cash balance, and uncompensated care.  And since the start of the economic downturn these problems have become worse. The initial response to this has been downsizing in terms of staff, services, and stalling or even cancelling capital projects. Now that the new healthcare bill has passed, some relief should be provided to Hospitals (once it becomes active) on their uncompensated patient care. But it's too early to start counting that money. Hospitals need to shape up to keep the doors open until that flow starts. The goal is to get efficient to reach the stage where they start becoming more profitable.  It doesn't matter if you are for profit or not, the money shall just help you invest in better services for the community.

 Here are 5 thoughts on what Hospitals can do to get more efficient...

• 1. Focus on what you are good at - "Oft given and cheap advice, seldom taken to heart." Not every hospital needs to be a multi specialty location. Look at balance sheets to understand money makers and loss leaders. Other than convenience why would anyone come to your Hospital? A couple of important non-clinical focus areas have to be Patient Satisfaction and Staff Satisfaction. Do not just measure it, get active on it. Find the pain points and work towards changing those. If you are not sure then get help.

• 2. Get the experts - "A lot of hospitals have gone this route and ....... nothing changed." Honestly, industrial experts understand more about material and work flow. Get their help to design your patient flow. IT experts know more about how to get the best out of your information network, use their services. Get your people on board with these changes early and keep them engaged. Measure progress through the cycle of change and you might have to tweak the process if it is not working. Remember to do a sanity check to ensure that you are not slipping back to old habits.

• 3. Dashboards - "What gets measured gets done." This old saying is very misleading. What people believe in is what actually gets done. Choose your dashboards very carefully and make sure to the right stakeholders to buy in. Be sure that stakeholders understand their role in a process. Harvest information from your peers and network to see what is working for them and why. There is a cost associated with every action (time, manpower, IT etc.), be cognizant of that and focused on what the problems are.

• 4. Manage your dollar - "It is very easy to spend money but very difficult to make it." Think very carefully before investing your money. Ask your peers and others within the medical community. If you are not already a part of an association or community, join one and become an active contributor. Utilize the power of an interested and invested group of people to understand pro's, con's, and options.

• 5. Retention is the key - "The cost of losing an employee is about 38 percent of the departing employee's annual wage." Retain your staff. They are the ones who developed a rapport with the patients. Use your intranet portal to develop an organization identity. If you don't have and intranet portal, then get one. Use intranet portals and other communication tools to make their job simpler and reduce stress at work. Making information easier to access on your intranet portal empowers your employee and helps create standards at work. This helps making life simpler, therefore making you employees happier.

None of the above can be done without a strong and engaged management team. If you can't convince the board, a smaller group of people, then you can't convince the staff. Professional management and governance needs to become the norm rather than the exception. Improvement requires change at various levels, workflow is the easiest one. Pushing the belief that we can do better and getting out "I know best" rut is the tough one. Get people on board early and keep them engaged is key.