Stop Cutting Costs: 4 Other Ways to Bolster the Bottom Line
Stovall discovered that the group was spending $250,000 to $300,000 per physician on recruitment but zilch on retention.
This lopsided approach to physician employment resulted in a 14% physician turnover rate – far above the current industry average of 6.1%. The remedy was the creation of a $100,000 budget to improve retention rates (averaging just $300 per physician), which succeeded in lowering the system’s turnover rate to 4% and saving approximately $1 million per physician who stayed.
2. Process improvement: Lean and Six Sigma methods are ways to improve your processes that bear financial fruit. I’ve written a number of columns and magazine articles on this topic. Creating this type of cultural mindset change requires only a modest up-front investment, depending on how many “black belts” you want to train to get the ball rolling. It’s estimated that 53% of hospitals apply some type of Lean process initiative and 42% use Six Sigma methods, which leaves a lot of room for improvement, quite literally.
My favorite example of why healthcare leaders should implement an enterprise-wide process improvement initiative comes from Seattle Children's Hospital. When this 250-bed hospital began planning a new outpatient facility in late 2007 to expand its capacity, however, it followed the standard “reduce variation” approach to the design of the facility. Just a few months later, however, the tanking economy forced hospital executives to figure out how to reduce the scale and cost of the project without sacrificing the goals for the facility.
Seattle Children’s Hospital management applied a modified version of the Toyota Lean Process Improvement process, called Continuous Performance Improvement, to the entire design process.
- 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
- Revenue Cycles Get a Boost from Simple JPEG Files