Balanced Budget: 5 Finance Tips for Healthcare Businesses

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Whether it’s lower reimbursements or a transition to value-based healthcare, providers are faced with increasing pressure to cut the cost of care. In the U.S. in 2013, about $8,700 was spent per patient, twice the amount of some European countries providing excellent care. Operations must be managed more efficiently. Here are a few tips in controlling costs.

Set Technical Priorities

It can be difficult for hospitals and other healthcare providers to establish what equipment needs to be purchased versus what can be put off for a while longer. Providing quality patient care is always paramount, but not every investment in technology will bring healthy returns before it becomes obsolete. It’s crucial that you set long-term goals, define the steps necessary to achieve them, and assess the financial risk in each scenario.

Purchasing Policies

There are many types of supplies that must be purchased to stay operational, from coffee filters to syringes. Administrators should look to implement savings into their purchasing structure wherever possible as an ongoing practice. Think about buying recycled or reusable materials where possible, establishing fixed-price contracts, and submitting bulk purchase orders for nonperishables that will provide substantial discounts.

Monitor Logistics

Supply chains should be viewed in terms of the tangible value they provide your organization. One strategy for healthcare providers is to define supply chain metrics that rate vendors according to your expectations. When new manufacturers or distributors reach out to you, get all the information you need, or ask for trial periods, to measure their value to your organization against vendors you’re already using. This way you’ll be able to make frequent improvements in your purchasing decisions.

Reduce Waste

Waste reduction is vital to lowering expenses. Team leaders should be held accountable for inefficiencies such as wasted time, excessive use of materials, damaged goods, and mistakes. Analysis tools can help to correlate this information and find out where the most costly waste is occurring. Administrators can then implement policies to correct the contributing factors, whether it’s reorganizing inventory or discipline for recurring incidents of careless behavior.

Track Data

The most efficient way achieve financial stability is to have a secure data system in place that tracks all information down to each individual transaction. This will not only enable staff to run reports as needed for operational transparency, but will help to satisfy compliance regulations, such as HIPAA protection of patient billing and personal information. Providers also need to meet aggregate spend guidelines regarding payments or gifts from vendors. Failure to produce this information when required could lead to substantial fines.

Healthcare leaders should establish and observe best practices both internally and as a reflection of industry changes. You should sustain a balance between cutting costs and following regulations.

Dixie is a proud mother of three wonderful girls and the happy wife a great husband. She loves writing in any of her spare time!

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