Healthcare is one of the most, if not the most, dynamic industries in the US. From shifting demographics, to evolving business models, to complicated regulatory oversight, there is no shortage of change to which healthcare systems must be able to adjust. While care delivery is slower to evolve, teams responsible for the administrative aspects of healthcare…
The Hospital CFO’s Guide: Best Places to Make Cuts
Making cuts can be difficult for CFOs in any industry, but the process can be particularly tough for those in healthcare. On top of considering the bottom line, CFOs in healthcare also need to consider how their cuts will affect patient care, growth opportunities and employee satisfaction, both now and in the future. If you’re currently dealing with these financial problems faced by hospitals, below are some points that may help you make quality decisions which benefit everyone involved in your organization:
Talk to Your Employees
Although often overlooked, one of the easiest ways to get an understanding of where cuts need to be made is to talk to employees. While numbers and spreadsheets can provide valuable data regarding expenditures, getting the perspective of the people working within your organization can make a huge difference in knowing what they face on a daily basis. Often, everyday employees can deliver key insights into cost-cutting measures by letting you know where they see waste and where they see inefficient practices being implemented. Financial challenges in healthcare are easier to solve than you might think by simply taking the time to listen to employee concerns.
Revisit Vendor Contracts
Vendor costs typically change as the economy changes as a whole, so it’s a good idea to revisit contracts on an annual basis. Many times, costs can be cut by negotiating better terms with vendors without affecting patient care or employee satisfaction. When negotiating new contracts, consider entering into shorter terms at the start to avoid being locked into deals that won’t reflect changes in economic conditions over time. You should also be continually researching vendors to see if you can find ones that may be able to provide comparable products and services at lower prices.
Utilize Community Outreach Programs
You can also consider community outreach wellness programs as a method of cutting costs. By educating people in your community about ways to make healthier decisions, your organization can narrow its focus of care and concentrate on patients more thoroughly. This can be done by partnering with existing community outreach campaigns that would love to have the name recognition associated with your hospital, but you can also create low-cost outreach campaigns on your own. Remember that the goal is to reduce preventable treatments, so spending a little more now can pay off big down the road.
Expansion May Actually Cut Costs
Although it seems counter-intuitive on the surface, expanding and growing your organization can actually lead to savings. This occurs because expanding can reduce congestion in your existing infrastructure. To plan accordingly, take a look at the numbers year-over-year for patient treatment versus costs involved in maintaining your organization. Then, compare that data to the growth of the community your organization serves during the same time period as well as projected growth numbers provided by local and state governmental reporting agencies. This can help you to see where you may need to expand and grow in order to more efficiently and effectively serve patients without placing the financial burden on one facility. A bigger facility however, is only successful if it has an effective financial plan in place.
Investing in Good Financial Software
Finally, investing in good financial software is essential when it comes to managing cuts. Using financial medical software for hospitals, you have the opportunity to see key metrics that are specific to your particular organization. Some of these may include simple things such as expenditures and personnel hours worked, but top medical software companies often include detailed analysis tools to measure investments, government funding, grants and endowments.
To learn more about how hospital finance software can help you make the right cuts at the right time, contact Strata Decision. Utilizing advanced healthcare software programming designed specifically for medical professionals, solutions provided by hospital software companies like Strata Decision’s can help your organization deliver quality care for patients and improve employee satisfaction for many years to come. Call [phone] or click here to schedule a demo.