Cost Reduction

In an era of mounting fiscal uncertainty marked by flat, and in some cases downward, trending net revenue lines, the need for reducing cost has never been greater. Yet many cost reduction strategies fall flat. In the end, most providers say these initiatives either did not produce the level of savings needed or that the costs crept back into the organization.

With unprecedented top line pressure, this time providers have determined that it is absolutely imperative to find cost savings opportunities, implement them effectively, and hold the gain over the long-term.

In these two articles for Healthcare Finance News, Liz Kirk, Strata Decision’s Vice President of Cost Improvement Solutions, addresses the many reasons why cost reduction efforts fail, and how organizations can make smarter decisions to position themselves for success.

  1. “Creating a Purpose-Built Healthcare Organization”- In this article, Liz explains that a purpose-built organization is one in which the roles are specifically designed and staffed to produce the output that is needed in the most efficient manner. Employing a built-for-purpose strategy across your healthcare organization will help not only to improve performance on key metrics, but also drive out a significant amount of excess cost.
    ACTION: Read the full article here.
  2. “Benchmarking is Not a Cost Reduction Strategy”- In this article, Liz shares why operational benchmarking should not be the first, second, or even third tactic that organizations turn to as part of their massive cost cutting initiatives. Not only does this strategy cost money, which providers are actually trying to save, but it also promotes sameness when what is needed now more than ever is innovation. To drive out cost, organizations must look inward to fix broken processes in order to see meaningful results.
    ACTION: Read the full article here.

When a hospital or other healthcare facility relies on the expert examination and analysis of financial and clinical productivity and performance results by an expert team, both cost and margin effects on the healthcare facility can be assessed. These top facility administrators, management and attending physicians have the knowledge and expertise to identify the overall financial and healthcare impact of all adverse conditions, events and effects. This highly qualified team of experts can combine their knowledge and experience to determine the necessary operational changes to instate helpful cost-effective measures that will not adversely impact patient care while initiating healthcare cost reduction.

Hospital and health center leaders can successfully initiate and sustain effective healthcare cost reductions in clinical areas of their facilities by collaborating on effective new cost reduction policies. Combining all their diverse areas of expertise, the specialized members of this team can make rapid and lasting progress toward permanent cost-reduction in numerous areas of their facilities. These experts know that when they devote less time to crunching numbers and more time to working with clinical leaders on the staff, they can see impressive and beneficial results in greatly improving patient care practices.

Savvy hospital administrators and healthcare center clinicians understand that by enhancing clinical treatment quality, they can ensure that good healthcare is more affordable for many patients. When excellent, appropriate and efficient medical care is provided in the best way, patients incur less treatment complications, adverse effects and readmissions to the hospital.

These healthcare leaders know that by working “upstream” with members of the public before they seek hospital care, clinicians can significantly reduce the need for these patients to receive ongoing care. After patients suffering from serious illness recover, clinicians and medical support personnel will work with these patients “downstream” to promote an effective and complete recovery for them.