In the intricate world of healthcare, hospitals face the constant challenge of balancing providing exceptional quality patient care, mitigating financial pressures, and matching the pace of medical innovation. Healthcare consultants offer vital support, providing expertise and strategies to navigate financial complexities. Let’s explore why the contributions of a healthcare consulting firm are so valuable to healthcare organizations.

Navigating the Complex Healthcare Landscape

The healthcare industry is dynamic and multifaceted, requiring a deep understanding of regulatory requirements and hospital financial structures. Healthcare consultants bring this specialized knowledge to help navigate these unique challenges. They offer expertise in areas such as:

• Financial Management: They help hospitals manage costs effectively, freeing up funds to invest in enhanced patient care and innovation. A consultant might also identify an opportunity to increase revenue on a given service line through more appropriate billing and coding, or may point out an alternate supplier with reduced pricing for existing services.
• Operational Efficiency: Consultants assess current clinical and non-clinical workflows and processes, identifying bottlenecks and inefficiencies that hinder productivity.
• Technology Integration: Consultants can help hospitals integrate new technologies and optimize use of software modules already owned. They may identify areas to rationalize and eliminate duplicative technology purchases across campuses and departments.

The Imperative of Financial Oversight

Maintaining financial stability is crucial for hospital systems. Healthcare consultants play a key role in ensuring hospitals prevent runaway spend growth. To manage overall system finances, healthcare consultants can work to:

• Improve Margins: Consultants work to enhance revenue and reduce expenses across categories, leading to improved financial margins. Margins can be improved through negotiating more favorable supplier contracts. Pathstone Partners has improved margins by over $500 million across the combined client portfolio.
• Reduce Operational Costs: By streamlining processes and optimizing resource allocation, consultants identify areas where internal costs can be reduced. Pathstone Partners, for example, focuses on streamlining operations and lowering operational costs for healthcare providers.
• Non-Labor Cost Reduction: Consultants also focus on the optimization of non-labor costs through negotiated price reductions with suppliers and reduced utilization of goods and services. Typical target areas for non-labor cost reduction include laboratory supplies, clinical supplies, clinical purchased services, information technology, and pharmacy.
• Labor Cost Reduction: Consultants provide labor solutions that help with structure optimization, contract labor, premium pay reduction, and overtime reduction.
• Data-Driven Insights: Consultants use data analysis to track spending, identify cost drivers, and provide actionable insights for financial improvement.

Fostering Innovation in Healthcare

Innovation is essential for healthcare to evolve and adapt to changing needs. Healthcare consultants play a role in driving innovation in the following ways:

• Implementing New Technologies: Consultants help hospitals identify, select, and implement innovative technology solutions. Target new technologies may automate existing manual tasks and enhance data collection / revenue cycle management. These innovations can enable staff to focus on higher-level responsibilities and ensure clinicians practice at the top of their licensure.
• Improving Processes: By redesigning workflows and implementing best practices, consultants enable healthcare providers to embrace innovative approaches to patient care and operational management.
• Introducing New Models of Care: Consultants support the adoption of new models of care delivery that can lead to improved patient outcomes and efficiency.

Areas of Focus Consultants work with a variety of healthcare facilities including:

• Acute Care Facilities
• Academic Health Systems
• Regional Health Systems
• Pediatric Health Systems
• Non-Acute Care Facilities
• Community Health Systems

The Value of an Objective Perspective

Healthcare consultants offer an objective perspective that can be invaluable to executives making critical decisions. They can offer an unbiased opinion on:

• • Process Analysis: They analyze workflows, identifying areas of improvement that might be overlooked by internal staff.

• Supplier Relationships: Consultants can help hospitals challenge long-standing supplier partnerships and ensure they are receiving maximum value from current supplier contracts.
• Strategy Development: Consultants work with hospital leadership to develop strategic plans that align with an organization’s goals and values. Their impartial strategic review can set an organization up for the best chance of success.

Learn How Pathstone Partners Can Make an Impact

Healthcare consultants are essential partners for hospital systems, helping them navigate the complexities of healthcare with expertise, objectivity, and a commitment to reducing costs while maintaining quality patient care. By partnering with a healthcare consultant like Pathstone Partners, hospitals can achieve operational excellence and financial stability, and position themselves for a successful future.

Create Your Strategy

Efficiency often goes hand in hand with other goals, like profitability and patient safety. Consider the following strategies if you’re looking to improve hospital efficiency.

Improve Cross-Department Coordination

Many patients, especially those with comorbid or chronic conditions, work with multiple providers. Even within one hospital, patients rely on the coordination of various departments. A visit to the emergency room might involve services from internal medicine, radiology, the lab and the pharmacy. Ensuring these departments are on the same page and collaborating with each other can help reduce the risk of errors and facilitate more efficient information sharing.

Departmental coordination can also support a positive, collaborative workplace culture and minimize the risk of data silos, miscommunications or redundancy. Some ways you might improve coordination include implementing cohesive technology solutions and creating cultural shifts.

Provide Proper Staff Training

A well-trained staff can work more efficiently, with less need to find answers to questions, fix errors or learn new concepts on the fly. Invest in your team and provide appropriate training. Stay on top of industry trends, new technologies and policy changes as they occur in the organization.

Make Patient Safety Your Top Priority

Putting patient safety first is a worthwhile goal on its own, but it can also increase hospital efficiency. Consider the time and costs associated with errors and delays. If you can avoid a misdiagnosis, you might also avoid the additional work it takes to address complications, legal issues or reputational damage. The additional diagnostic and treatment costs of poor patient safety can greatly impact efficiency and slow down your operations, further reducing profitability.

Look for initiatives that help you be proactive about safety. For example, using decision support systems or cracking down on administrative fraud can help you avoid problems altogether and eliminate the additional resources required to address them.

Contact Pathstone Partners for Healthcare Consulting

It’s no revelation that healthcare organizations are complex. With advanced technology demands, strict regulations, evolving patient needs, vendor complexity and labor challenges, there’s a lot to cover. Pathstone Partners puts experienced consultants on your side. With a focus on non-labor cost reduction, we’re dedicated to improving hospital profitability and efficiency across the board.

We start by identifying areas for opportunity in all non-labor spend categories. Then, we work as an extension of your team to implement and sustain savings initiatives, complete with training and talent development. As an industry leader, we know the value of a long-term partner you can trust for successful implementation and ongoing support.

Reach out to us today to see why over 175 hospitals across the United States have turned to Pathstone Partners for organizational transformation.

Healthcare is an ever-evolving industry

To serve patients and meet business goals, hospitals must adapt to a new landscape, with different technologies, regulations and reimbursement models always appearing. Maximizing profitability and efficiency are two goals that often pose a challenge, as healthcare providers work to balance costs with effective, timely care and innovative services.

Since hospitals can be particularly complex healthcare systems, reaching these goals requires efforts across many parts of the business. Let’s explore some ways to increase profit in hospitals and healthcare systems and boost efficiency.

Understand Revenue Cycle Performance

If you want to find opportunities and areas for improvement, you’ll need to know your revenue cycle on a deeper level. Better data can also help executive team members quickly make informed decisions.

To dive into your revenue cycle, consider implementing revenue cycle analytics. These solutions can turn the raw data into visualizations like graphs and charts and display them in an easy-to-understand dashboard. You can also improve the quality of the data that enters your analytics solution with better reporting tools.

Invest in Healthcare IT Systems

Technology has seen huge advancements in recent years, so if you’re still running on outdated legacy technology, you’re likely missing out on significant profits. Some examples of cost-saving IT initiatives include decision support systems, electronic medical records (EMRs) and computerized physician order entry systems for prescriptions.

These digital technologies could offer significant benefits to hospital profitability. Annual savings from efficiency benefits alone could exceed $77 billion. By improving scheduling and coordination, for instance, a hospital could reduce hospital stays, increase productivity, and nurse administration time.

The safety benefits of healthcare IT can also boost your bottom line. A medication order system could alert physicians to potential drug reactions, helping eliminate adverse events overall. Healthcare IT technology can provide innumerable benefits for disease prevention and chronic disease management, which are becoming especially relevant in value-based care initiatives.

Reduce Readmission Rates

Readmissions are costly for the patient and the practice, and many of them are preventable. By collecting and analyzing data across the continuum of care, such as follow-up care, hospitals can focus on reducing readmission rates. Lower rates can help achieve maximum reimbursements and avoid penalizations from the Centers for Medicare and Medicaid Services (CMS).

Properly Negotiate Vendor Agreements

The vendors you work with have extensive training and resources to devote to contract negotiation, ensuring that their company has the upper hand. Hospitals typically don’t have the same kind of resources, which can put you at a disadvantage. Spend some time on training to ensure that anyone making these agreements knows the basics of successful negotiation.

You may also want to consider working with a healthcare consultant. At Pathstone Partners, we come to negotiations prepared to make hospital profit improvements. We might collect data on supplier relationships, out-of-line pricing benchmarks, hospital growth and reimbursement rates to gain the most leverage before meeting with a vendor.

Perform Line-Item Analyses

Your line-item analysis is a key part of understanding your monthly spending. Many hospitals are overpaying. A line-item analysis can provide additional security by confirming that all listed items and invoice pricing are included in the vendor contract and that hourly rates are consistent. Manual analysis is virtually impossible, even for smaller hospitals. Automated line-item analysis is another area where IT investments can help significantly.

Consider a Telehealth Strategy

Telehealth has seen a 38-fold increase from pre-pandemic numbers. Offering these digital service options can open up new revenue streams and expand your reach within a community. Telehealth is especially valuable in rural settings or in areas facing provider shortages, where it can make healthcare possible for people who would otherwise struggle to get to a doctor. Telehealth is also an excellent tool for managing chronic conditions and improving patient relationships.

What are Inventory Management Systems

Healthcare inventory management is incredibly important in medical facility processes. Inventory management systems can help hospitals and other medical organizations streamline their processes to save time and money while providing quality care to patients.

A streamlined inventory management system makes it easier to track equipment and supplies, which improves communication between departments, reduces theft, increases productivity, maintains compliance, and reduces the time it takes for medical personnel to sign equipment in and out for use. When you improve your medical supply inventory management, you improve several processes within your organization.

Why Is Inventory Management Important?

Healthcare organizations must keep track of various inventory, including:

• Medical supplies
• Medical equipment
• Patient prescriptions
• Health and wellness products

While a simple Excel spreadsheet may seem enough to manage inventory successfully, it’s actually more effective to implement a streamlined inventory management strategy. An efficient management workflow can help medical facilities save time, money, and effort. Medical facilities are pressured to reduce costs, and streamlining inventory management is one way to cut spending.

With proper medical inventory tracking and planning, hospitals can save time and money. Planning out the supplies needed can save $1,800 per surgery and precious minutes of time, for example.

Healthcare inventory management is a workflow that tracks a health system’s orders, purchases, inventory, payments, health product sales, and prescriptions. An effective workflow will help an organization avoid supply and monetary losses with an accurate and updated product and supply log. Inventory management also provides the following benefits:

• Contract compliance: Effective healthcare inventory management helps organizations order and use the correct amount of products so they don’t obtain too few or too many supplies. This prevents them from breaking bulk purchasing contracts.
• Digitized data: Virtual inventory management streamlines your processes to eliminate errors and the need for paper workflows. Paperless data also allows you to organize your information and inventory efficiently.
• Improved communication: With an efficient healthcare inventory management system, administrative teams can effectively communicate with other healthcare teams to keep track of supplies and equipment.
• Equipment and instrument protection: Inventory management prevents theft because it allows you to track where equipment is at all times.

Types of Healthcare Inventory Management

Many hospitals lack a standardized inventory management process, but a standard process can significantly decrease spending. There are two different types of healthcare inventory management, so it’s important to understand the benefits and disadvantages of both. Healthcare facilities can manage inventory using one of the following methods:

Periodic Inventory

Periodic inventory requires employees to update inventory data manually. For this method, employees take inventory periodically. For example, they may take inventory once a week or at the end of a similar period of time. While this method may be sufficient for small healthcare facilities, it is not ideal for hospitals and larger healthcare organizations.

This inventory management method leaves significant room for error and takes time away from other important tasks. Larger healthcare facilities benefit more from the perpetual inventory method.

Perpetual Inventory

The perpetual inventory management method continually and automatically updates inventory data. The advanced software needed to operate a perpetual inventory system can cost more than practicing manual periodic inventory, but its benefits surpass its cost. Perpetual inventory systems account for important details such as purchases, deliveries, additions, and subtractions. They allow medical staff to track equipment use at all times so all supplies are accounted for.

Hospital Inventory Management Best Practices

Inventory management is important in hospital and medical organization settings. With proper inventory management, you can increase productivity and know where your medical equipment and supplies are at all times. To improve your hospital inventory management, implement the following best practices:

1. Organize Your Inventory to Avoid Redundancies

Healthcare providers can often misplace supplies or equipment they already have. This can occur when someone mixes up inventory or delivers supplies to the wrong person or place. As a result, employees may end up ordering redundant supplies and equipment to replace misplaced items.

Inventory management can ensure all supplies and equipment pieces are easily located at all times. It can help hospital staff deliver supplies to the correct individuals and return equipment to the correct location when they are finished using it.

Implementing a hospital tracking system allows you to label and tag your equipment and supplies in your database. You can add locations to track where items are and where they should be at all times.

2. Create Tags for Equipment and Supplies

When equipment has tags with labels, barcodes, and identification numbers, staff can easily check pieces of equipment out for use or sign them off to other staff members.

Using a radio-frequency identification (RFID) system makes it easier to locate who last used a piece of equipment if it goes missing. This tagging system can also increase productivity and efficiency and help protect equipment and supplies from theft. Tagging equipment also streamlines its maintenance process and helps you monitor its life cycle.

3. Collect Department Data and Examine Existing Patterns

Collecting data can provide significant insight into existing usage patterns. It’s important to track how much equipment and supplies employees use so you can adjust accordingly. By collecting and analyzing data, you can avoid ordering only the supplies that you need, and you can openly share how your department is progressively saving money.

When you implement a data-driven approach in your supply management method, you can make informed decisions and collaborate effectively with clinical leadership.

4. Implement a Medical Inventory Management System

Manually managing inventory can lead to errors, missing supplies, overspending, and inefficiency. Implementing a clinical inventory management system can eliminate errors and create a more consistent process that makes it easier to document usage, prepare reports and maintain compliance. A supply management system can help your hospital or medical facility save time and money by protecting your equipment and allowing you to find its location at all times.

Let Pathstone Partners Help You With Your Inventory Management

An effective inventory management system can significantly improve your hospital or medical facility’s processes. Implementing an inventory management system can help you save money on supplies, locate equipment at all times, prevent theft, increase productivity and maintain compliance.

Perpetual inventory management is much more effective than periodic or manual inventory management, so having advanced software to track your supplies can significantly benefit your healthcare facility. When you implement best practices for inventory management, you help medical staff focus on important tasks by making equipment and supplies readily available.

Pathstone Partners can help you streamline your processes and make informed decisions with medical inventory management solutions. Our consultants will collaborate with your medical leadership team to drive value and results. We will help you bridge communication gaps and achieve consistent cost savings so you can provide quality patient care as efficiently as possible. Consult with Pathstone to learn more about our healthcare consulting solutions and how we can help you manage your inventory effectively.