In Healthcare, Every Penny Counts

Carrie Vaughan, for HealthLeaders Media, July 2, 2008

Airline carriers are scrambling for ways to offset rising fuel costs. The solution? Pass those costs onto someone else. Three major U.S. carriers—US Airways Inc., United Airlines Inc., and American Airlines Inc.—have announced plans to charge their coach passengers $15 for the first checked piece of luggage. In addition, US Airways will start charging its coach passengers $2 for a soda.

So what does all this have to do with community hospitals? Your purse strings are about to get tighter with likely reimbursement cuts, as well. So how do you plan to offset those losses? I asked this question a few months back and didn't get any real solutions. Instead, I heard from CEOs hoping to find some answers, as well.

Hospitals need to figure out how to get more dollars in the door. But raising the price of services may not be the most consumer-friendly option—nonprofit hospitals' list prices and billing and collection policies are already being scrutinized. I'm not sure how well it will work for the airline industry, either. Why would I choose to fly with a carrier that will charge me for a soda and checked bags, when I could fly another carrier and not incur those costs? I think American Airlines has a better strategy with its partnership with Aircell LLC to offer Internet services to its passengers for $12.95 for flights three hours or longer and $9.95 for shorter flights. I think that a number of business travelers would be willing to pay for this service.

But what services will patients pay for? With all the talk of consumer-driven healthcare, hospitals haven't been very innovative in this regard. Sure, hospitals are upgrading their facilities so that they are less institutional and more hotel-like. Some even offer concierge services to employees and patients—someone who can pick up dry cleaning, arrange child or pet care, and make hotel or dinner reservations, among other services. Personally, I'm not too worried about getting my dry cleaning picked up while I'm in the hospital. And while the waterfall wall or healing garden may help contribute to the overall patient experience and satisfaction, I think hospitals can do more to appeal to the consumer and get a few more dollars in the door at the same time. What about offering patients massages—$15 for a 15-minute shoulder, hand, or foot massage? I, for one, would feel better, and it's something that I never take the time to do. Better yet, sell these services in the gift shop, so family and friends can buy you a massage versus flowers or a stuffed animal.

Or you can offer catering services through the hospital cafeteria. You may be thinking, "Who wants to hire a hospital to cater a meal?" But some hospital cafeterias offer some of the best food in town and have successful catering services. Many hospitals also offer retail services, providing nursing materials for new moms or bandage materials for wound care patients. But how well are these items actually marketed? Are these services in a nondescript-looking room down a hallway or mixed in with the candies and stuffed animals in the gift shop? Prominently displaying these items in the women's center or wound care center may increase revenues. I've even heard of a gift shop on wheels—volunteers wheel a cart into patients' rooms to let them know about the concierge services and offer them free newspapers. In addition, the cart is stocked with chocolate, toothpaste, and other items that patients can purchase. Five dollars for a box of chocolates may not solve your reimbursement woes, but every penny counts.

Carrie Vaughan is editor of HealthLeaders Media Community and Rural Hospital Weekly. She can be reached at
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