We have made significant progress over the past nine years since the passing of the Affordable Care Act, and in many respects, we are living in a golden era for healthcare innovation. But the complexity of the challenges that our healthcare organizations face has increased: an aging population, tight labor markets and resources, new technologies, regulatory and economic changes, supplier consolidation, and more. Costs continue to rise faster than patient revenue, and reimbursement rates have declined.
To every senior healthcare executive, the topic of cost management is a common refrain that underscores the business reality — trying to do more with less. Hospital budgets are tight and getting tighter. Patients and families rely on you for a wide range of health care services every day. Your community’s well-being aligns closely to your Hospital’s financial well-being. In this environment, it is more important than ever to understand the value of the available possibilities. For many healthcare organizations, it is an unsustainable path which requires re-visiting old assumptions.
As a senior executive of a community-based, mission-driven health care organization, you and your team have already taken a close look at expenses. Perhaps you identified savings opportunities in several expense categories and made some changes leading to improved cash flow. You believe additional savings are unlikely. But are there ways to unearth even more savings without compromising quality or service? Consider what you could do by recovering additional cash flow hidden in your supplier base. You could fund new projects, or enhance existing services or programs to help improve the health of residents in the communities you serve.
Discovering additional savings isn’t wishful thinking. It’s achievable. How? A refocused approach to examining and evaluating your cost management strategies and the underlying assumptions that many organizations have embedded in their practices. Over the next three issues, we will explore ways in which you and your organization can incorporate fresh ideas and examine old paradigms to achieve more significant and more sustainable results.
Just as you incorporate best practices in your business, I’d like to share some practical tips to help you move further along the continuum from “good” to “exceptional” — best practices based on my experience helping organizations like yours.