Analysis of Your Hospital Margins is The Key to Growth
The Healthcare Leadership Experiece with Lisa Miller Episode 29 Healthcare Predictions with Lisa Miller Cost Aware for Patient Care Positive Hospital Margins

Growing through Analysis

In these audiograms, taken from Episode 19 of The Healthcare Leadership Experience, Lisa discusses the need for analyzing hospital margins and the role that cost awareness plays in patient care.

It’s a Huge Myth That Hospitals Are Making Lots of Money

If your hospital has a positive margin derived mainly from investments, fundraising and other capital sources, that’s a problem. While security investments are good, the goal for every organization is to have a positive margin from operations alone. That is key.

Balancing Optimization and Growth

Hospital margin growth is important, expansion is important but if your new service line has a minimum or even negative margin and isn’t capturing all possible opportunities it seems misplaced. When it comes to optimization versus innovation both are important, but I would rather optimize than grow a negative problem. Innovation can play a key role in reducing costs, but there has to be accountability. There’s a balance between knowing when to move on from optimization towards innovation and growth.

Regular Data Analysis of Hospital Margins Ensures Accountability

Data analytics impacts the way we analyze outcomes, from hospital discharge to readmissions, Social Determinants of Health (SDOH), and from managed care to cost. There are probably over 100 different ways data analytics can be applied to healthcare performance but in general, it is underused. I encourage hospitals to have a list of all areas they utilize data analytics capabilities.

Vendor Negotiations Have a Direct Correlation on Your Margins

A study of the Fortune 1000 companies with a systematic negotiation process versus those without found a difference in the profitability of almost 14%. Vendor negotiation directly affects your hospital’s profitability and is tied to financial outcomes. Think about the volume of contracts your hospital manages, whether related to costs, reimbursements or joint venture agreements. The more skilled you become at negotiation and implementing a vendor negotiation strategy, the higher your financial reward.

Lisa Miller

Lisa Miller

Lisa Miller is a consultant, speaker, and podcast host. Her consulting firm, VIE Healthcare, has provided services to over 1,000 hospitals and organizations since 1999.

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Discover 15 Effective Cost Savings Strategies That Most Hospitals Can Apply Right Now

Learn how these five principles can help you reduce costs immediately.

VIE Healthcare 15 Effective Cost Savings Strategies Report Cover Image

A strategy developed from analyzing over 5,000 hospitals

A simple step-by-step plan in plain language

Proven processes to organize and motivate your team to find savings

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DOWNLOAD FREE REPORT

Discover 15 Effective Cost Savings Strategies That Most Hospitals Can Apply Right Now

Learn how these five principles can help you reduce costs immediately.

VIE Healthcare 15 Effective Cost Savings Strategies Report Cover Image

A strategy developed from analyzing over 5,000 hospitals

A simple step-by-step plan in plain language

Proven processes to organize and motivate your team to find savings

We protect your information