Hospitals have a lot of bases to cover when it comes to allocating their spending. Hospitals have to spend money to cover medical supplies, medical equipment, the maintenance and upkeep of the building and facilities, insurance, medical research, training staff, employing physicians, physiotherapists, surgeons, administrative staff, and so on as well as paying for various other healthcare purchased services. Running a hospital is undoubtedly an expensive business. Hospitals that overspend consistently and don’t manage to reduce their high levels of spending will find themselves getting into serious financial difficulties.
We have come up with some tips for how hospitals can prevent themselves from overspending today and become more cost-effective as organizations.
One way that hospitals can successfully manage their finances and bring down rising costs is by outsourcing services to third-party providers. This process may include outsourcing clinical services to external organizations such as ambulance services, pharmacy, rehabilitation services, the staffing of medical professionals, and so on. For example, a hospital wanting to reduce their spending costs more effectively may decide to employ trained registered nurses from an external provider such as a professional nurse staffing agency, instead of paying for the expensive salary of in-house nurses.
So, outsourcing is a method that hospitals can use that are looking to reduce their overall spending levels. Outsourcing can also be a great way for hospitals to deal swiftly with any staff shortage issues. If there is a lack of doctors available for a night shift, for example, outsourcing may mean you may be able to rely on a doctor coming into the hospital and doing the job from an external medical staffing agency.
Outsourcing can also be a great help for helping hospitals to ensure error-free medical billing for patients. Hospitals and healthcare professionals process hundreds of medical records every single day. However, medical coding and billing can be complicated. Outsourcing allows hospitals to enable specially trained dedicated teams to deal with medical billing and all those matters.
However, hospitals wanting to outsource their clinical services to external providers and organizations should be aware that there is a lot of regulation surrounding outsourcing when it comes to paying for clinical services as ‘purchased services’. Understandably, there is rigorous clinical oversight to make sure everything with staff coming in from external providers is going smoothly and patients are receiving top-quality care and they are satisfied with the service the hospital is providing to them.
Although outsourcing can save hospitals money and have other benefits, there are a few downsides to outsourcing too. One negative side of outsourcing is that it can increase staff turnover as more staff come and go, instead of staying with the same tight-knit in-house teams in the hospital. Teams working together in a high-pressure environment often become very close and develop a strong bond with one another and a healthy strong team spirit emerges. So, outsourcing and constantly trying to shoehorn new members of clinical staff into different departments of the hospital can sometimes have a negative impact on the team morale of the hospital staff.
Focus on Retaining Staff and Keeping Staff Turnover Low
Another way to keep spending low is by the human resources and management departments of the hospital working to make a conscious effort to focus on retaining hospital staff and keeping staff turnover at a low level.
A good way to retain staff is by communicating with them properly and demonstrating that you as an employer are willing to listen to their workplace concerns and feedback. You can communicate with hospital staff by arranging appraisal meetings in-person to review their work performance, this may take place between staff members and hospital management. Other ways of communicating and engaging with hospital staff today could include things such as creating staff surveys and questionnaires, emails, social media posts, and so on.
One other way to retain staff in a hospital is by setting clearly defined measurable goals that hospital staff members can strive to work hard and reach. Important staff targets being met should come with performance rewards and bonuses. Some ideas for performance rewards to motivate hospital staff may include an extra few days’ holiday, pay bonuses, a promotion to a more senior role with a higher salary. Working in a hospital involves being a true team player, and the inability to retain staff may have a knock-on effect on staff morale and cause other members of staff to consider if they should also think of leaving their job at the hospital too.
Monitor Spending and Finances Closely
In order to keep a hospital’s spending in check and to prevent any overspending, a hospital should monitor its spending closely. Hospitals should look in-depth on a regular basis to monitor their expenditure and what they are spending money on. Line-item details are useful for hospitals as they provide them with a more detailed breakdown of accounts and purchased services, and how much is being spent, and on what. This can be done by utilising the technology through platforms like VIE Healthcare Consulting. This allows hospitals to access the line item details for outsourced services to monitor and manage how much is being spent.
Make Efficient Savings to Reduce the Building and Maintenance Costs
A hospital can make savings by running its building and facilities more efficiently and at a lower cost. Running the hospital’s building more cost-effectively may include taking measures such as using energy-efficient light bulbs, outsourcing key maintenance services such as cleaning and painting to affordably priced external staffing providers, and reduce spending on waste management by using reusable/recyclable materials and removing single-use plastics from the hospital.
Make sure the running costs of the hospital facilities stay low and money is not wasted on a daily basis on things such as having the heating up to the full maximum temperature when it’s just not necessary. Saving money on the running of the building may however require hospital management to introduce a bit of staff education. Encouraging staff members to do simple everyday things at work such as the last person to leave a room making sure that they switch the light off, could potentially save the hospital a lot of money by preventing energy from being wasted regularly.
However, the hospital will every few years have to spend money on important upgrades. For example, if constant maintenance issues are occurring every day in the radiology department building that was constructed back in the 1950s using older materials, it is perhaps time for the hospital to invest in spending money on building a new radiology department. Although this will of course initially seem like a large chunk of money, it will prevent a lot more dollars from being spent on fixing and repairing maintenance issues.
Improve Your Recruitment Strategy
Another way that a hospital can save money in the long-term is also by having a clear recruitment strategy and making sure they employ the very best of the best in the medical profession. For example, if a hospital employs a reliable top brain surgeon, you will not then have to spend time and money on continually hiring and firing brain surgeons who are not up to your high standards and incapable of providing high-quality surgery to patients.
So, when it comes to saving money on spending, hospitals have to be resourceful and willing to think outside the box.