Labor Efficiency Emerges as Cost Containment Measure

This article appears in the October 2012 issue of HealthLeaders magazine.

For many healthcare leaders, it's a case of easier said than done.

"Hospitals are real good at identifying expenses and cutting them," says William Cors, MD, MMM, FACPE, chief medical quality officer at the 185-staffed-bed Pocono Medical Center of East Stroudsburg, Pa. "But if they are so good at it, why doesn't it ever solve the problem?"

Cost Containment: Targeting Cuts, Enhancing Efficiency, and Using IT

There are three principal levers that business leaders can pull to reduce costs, and respondents to the 2012 HealthLeaders Media Cost Containment Survey use all of them. First, one can reduce the amount spent for items. Second, one can issue and enforce a spending target by edict. Third, one can operate more efficiently. Of the three, operating more efficiently may be the most challenging to implement, but may offer the best opportunity for sustainable gains.