In the current cost crisis, every hospital needs to identify cost savings to drive margin improvement.
Here are three strategies your hospital can adopt now.
1. Carry out a thorough review of all contracts and costs.
Hospitals with a robust cost management approach commit to carrying out an in-depth analysis of their contracts and costs.
Whether you’ve just renegotiated a contract or carried out a value analysis, we recommend carrying out this exercise.
We often uncover pricing errors, such as excess charges, during a contract review.
2. Build a strong supply chain team.
For me, this is one of the most effective ways hospitals can address the cost crisis.
Supply chain excellence is vital to the successful operation and profitability of your hospital.
High-performance hospitals invest in and build world-class capabilities in analytics, sourcing, negotiating, and contracting.
Take a look at the capabilities and resources across your organization.
You might need to hire people with analytics capabilities, or strong negotiation skills.
You might need to bring in interns to carry out support work for your key teams.
Whatever skills your organization needs, building a solid internal team will give you a strong competitive edge.
Every hospital also needs to offer its supply team continuous learning opportunities.
A budget of $3,000 per person allows them to attend courses on negotiation or analytics, for example.
Encourage your teams to expand their skills base every year.
It will enhance their job performance, enable them to develop more expertise, and benefit your hospital.
3. Be disciplined around budgets.
Successful cost management requires more than a monthly review of budget variations.
Be committed and curious about the line item details of your invoices.
These three strategies are what high-performing hospitals are doing to address their cost issues.
I encourage your hospital to do the same.
Reach out at email@example.com to discuss your cost savings goals and how we can support and accelerate cost savings opportunities in your organization.