Cost Challenges Facing Healthcare Organizations
Hospitals used to be reimbursed at a line-item level, where a charge was only issued with each item used or service provided. That bill was then sent to the patient or insurer, incentivizing procedures and tests.
Now, hospitals are given a certain amount for each diagnosis-related group (DRG). The hospital must then figure out how to best spend that fee while keeping the patient’s overall health status as the priority. Below are three of the most significant risks involved with delaying these strategies.
Lack of Resources or Bandwidth for Strategy Management
When we think of healthcare resources, we paint a picture of physical supplies like gloves, medications or medical kits. As you can imagine, a lack of these resources for healthcare settings can affect the quality of patient care and the work environment for providers. For these reasons, increasing the supply of resources is one of the first places organizations invest extra funds, delaying any plan or initiative.
However, consider extending the needed resources for hospitals to include general knowledge about strategic management — or bandwidth. For the success of cost-reducing plans, teams must have the capacity, energy and motivation to deal with the situation. Understanding your goals and knowing how to implement a strategy can help your organization manage cost reduction.
Decision-Making Process Complexity and Length
Making the final decisions for these strategies can be lengthy and full of multiple levels. Because of this complex process, implementing strategies can be seen as more of a hassle than a help. People and organizations have often pushed a cost-reduction strategy to the wayside because of the many factors involved, including maintaining employee and patient safety.
However, don’t let the lengthy process scare you away from making necessary changes for the betterment of your healthcare organization. Taking the required steps can change this daunting task into a helpful resource to utilize for years to come.
Poor or Inadequate Data for Initiative Support
Data analytics in healthcare are important for categorizing data to use it toward the organization’s operations and services. Poor data organization can add to your costs.
Insufficient data can interfere with patient medical records, increasing potential errors and hindering the patient experience. It may even impact your organization’s security, and data breaches are exceptionally costly.
Take control of your data to best help with the decision-making process. This way, you can pinpoint precisely where cost reductions are needed based on recent data, making initiative support much more efficient.
Take Action
Any organization has several challenges that threaten the success of reducing costs. Overcoming these challenges is vital to ensure we create an environment for patients to heal and thrive. What healthcare organizations decide to implement now can create a sustainable model for the future.
Contact Pathstone Partners today and discover how we can help your margins!
