Nowadays, consumers shop around for their healthcare needs and there is strong competition between hospitals and other healthcare facilities. For that reason, hospitals must be smart when it comes to their finances and make budgeting a top priority. Luckily, there are countless ways for hospitals to cut overheads and increase profits, without sacrificing patient care. Here are four strategies to reduce operational costs in hospitals.
1. Complete a financial audit
If you are seeking to reduce operational costs in your hospital, then completing a financial audit is a great starting point. A financial audit will give you a clear overview of your revenue cycle and overhead costs. This information can then be used to identify weaknesses and develop strategies to cut expenses within your healthcare facility.
Having access to financial analytics will also enable you to make informed spending decisions which will increase your overall financial performance. You can easily install accounting software to monitor your hospital’s finances. There is also a fantastic selection of healthcare auditing companies that can perform audits on an annual or bi-annual basis and help you reduce operational costs and minimize financial risks.
2. Outsource non-essential activities
Outsourcing can be an excellent way to boost efficiency and save money. When you outsource certain activities, you reduce labor costs and overheads. This means that your healthcare staff can focus on the core elements of your business that will drive profitability i.e. patient care.
According to Hospital and Healthcare Management, the most common area to outsource in healthcare is IT administration. Some other popular areas of healthcare to outsource include patient appointment scheduling, medical billing, and marketing. When done correctly, outsourcing can enable hospitals to cut costs while enhancing service levels and patient outcomes.
3. Improve the patient experience
Ensuring that patients are satisfied throughout the hospital experience plays a vital role in reducing operational costs and increasing revenue. Research shows that hospitals with higher patient satisfaction typically have higher profit margins. This is because patients who have a positive experience are much more likely to use your services again in the future. You should also keep in mind that 70% of patients use customer reviews to help them find a physician and 95% of patients find online doctor reviews reliable according to a survey by mobilehealthnews.com.
For that reason, you must focus on providing an excellent patient experience. You can improve patient care by providing healthcare staff with quality training, ensuring high levels of cleanliness, and personalizing the patient experience.
4. Avoid unnecessary testing
Unnecessary laboratory testing is a huge wasted expense that costs healthcare facilities billions of dollars each year. Avoid unnecessary testing by being cautious when ordering lab tests and creating standardized protocols to follow when requesting medical tests. Ensure that laboratory tests are being ordered out of necessity rather than habit. You should also maintain clear electronic healthcare records to help avoid duplicate tests. Minimizing unnecessary testing can increase patient satisfaction and reduce operational costs within your hospital.