Sleuthing for (More) Savings In Your Budget
Hejna suggests that financial leaders ensure the services a facility offers are "right-sized" to meet the demand of the area. For instance, that could include revisiting physician services arrangements, decreasing or increasing employed physicians, or scaling back on physician alignment. Rightsizing isn't about layoffs, it's about ensuring you have exactly what you need to make your facility operate perfectly—no more and no less.
Tip 4: Eliminate process waste. Everyone from your maintenance workers to your CEO needs to be operating at optimum efficiency. Toyota's Lean Efficiency offers one methodology to try; there's also Six Sigma. Both of these credos are long-term fixes to solving the wasteful mindset that pervades many facility staff. "You have to take the whole care delivery process and be sure it is as efficient as possible—from a cost standpoint, that's where you'll squeeze out the most value."
Tip 5: Know when to stop cutting. Not unlike someone who finds success in weight loss, knowing when to stop trimming the fat is important. If your facility becomes too emaciated you could damage some greatly needed services. Hejna says to always be mindful of your mission when approaching cutting.
"Cost reduction is all about anticipating need, and that flows from the analysis of demand and being able to predict, at least annually—quarterly is better—what your volume is going to be," he says.
Actualizing sustainable savings for your hospital over the long-term requires financial leaders to become comfortable with being uncomfortable. You must challenge the existing way your hospital does business and you must encourage your staff to embrace these changes too. Thankfully, the more often you do challenge the existing budget and then measure the process and progress of your changes, ultimately you will see there is intrinsic value—translation: money—in doing so.
Note: You can sign up to receive HealthLeaders Media Finance, a free weekly e-newsletter that reports on the top finance issues facing healthcare leaders.
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
- As Medicare Advantage Cuts Loom, Disagreement Over Program's Stability
- Medicare Advantage Carriers See 'No Choice' But to Accept Cuts
- Centralizing the Revenue Cycle Protects the Bottom Line
- CA Fines 8 Hospitals for Medical Errors
- Physicians to Appeal 'Docs v. Glocks' Ruling in FL
- Doctors Feel Pressure to Accept Risk-based Reimbursement
- Surgical Checklists Unused in 10% of Hospitals, CMS Data Shows
- Employers Weigh Risks, Benefits of Private Exchanges
- 3 Management Lessons from a Supermarket Debacle
- A Fresh Look at End-of-Life Care