Healthcare News & Insights

Adapt your budget to increase innovation: 3 common pitfalls to avoid

You know it as well as anyone, finding room in the budget to adopt new, innovative technology is an epic feat. Innovation just isn’t a priority when there are so many other requirements and restrictions on your cash flow, and it often doesn’t have an immediately visible impact on patient care or safety. 

But we’ve told you before that investing in innovative technologies can keep your hospital at the forefront of the healthcare market. It’s time to start focusing on those innovations while still ensuring your budget stays afloat.

Budget barriers

A new article from Harvard Business Review suggests there are three ways your budget structure could be holding your hospital back:

  1. Your budget units aren’t aligned. Having separate budgets for clinical departments, care areas and ancillary departments makes sense, but the problem comes when those units aren’t communicating and working together. You’re missing out on the chance to bring in innovative processes that can streamline the entire hospital because none of the departments are connected. So you might want to consider creating a central innovation budget you can use to purchase technology solutions that’ll impact multiple units.
  2. Your yearly operating budget is too rigid. If a department goes over budget during the fiscal year, expenses often have to be reduced to get that department back under budget – which can lead to worse patient care and safety. It also cuts down on your facility’s ability to invest in innovation. Also, certain technologies and other innovations might take years to have a significant impact. Instead of putting innovation on a yearly timetable, allowing for flexibility and fluctuation within the budget is the best strategy.
  3. You’re separating the operating- and capital-budget timelines and processes. Software services and other technology could fall into either the operating or capital budget, depending on how they’re purchased and used. But don’t anchor yourself to those categories. Some technology might work better in an altogether different area, or it might be able to fit both categories. Consider which option will be best for your facility’s cash flow.

Stay flexible

You want your organization to stay competitive and continue providing excellent patient care, so try not to limit your hospital to the traditional ways of budgeting.

Instead, take advice from a range of stakeholders, and investigate what other facilities are doing to manage their budgetary and technological concerns to implement innovative care strategies. There’s no one right way to manage innovation, so look for a strategy that works best with your patient mix and aligns with your facility’s priorities.

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