Healthcare News & Insights

7 strategies for community hospitals to improve their bottom line

For small community hospitals, it can be difficult to boost quality of care. Larger hospitals and health systems have more resources at their disposal, and community hospitals may lag behind. But that doesn’t mean it’s impossible for smaller hospitals to make progress – they just have to use different strategies to achieve success. 

GettyImages-171579543Despite lower patient volume and stiff competition from larger facilities, community hospitals can survive and thrive in an era of value-based payments if they put themselves on the right track now.

Achieving success

In a news briefing from the Advisory Board, two of the organization’s expert researchers, Trevor Goldsmith and Andrea Martin, discuss seven ways for community hospitals to improve revenue and quality of care in the current healthcare climate:

  1. Focus on outpatient growth. Outpatient services will become more popular as payors implement different reimbursement models that focus on providing outpatient care, instead of overnight hospital stays. So demand will increase, which means there’ll be room for community hospitals to focus on the outpatient services local residents need most so they can attract more patients.
  2. Form independent partnerships with other organizations. Smaller hospitals may hear the word “partnership” and think it means they have to merge with a larger facility or health system. But that’s not the case. Hospitals of all sizes are forming independent alliances with each other to improve patient care without losing their individual brands. In addition, facilities are working with other partners, from ride-sharing services to community food banks, to improve the patient experience overall.
  3. Keep costs low. Both payors and patients will be more attracted to a facility where they can get more bang for their buck, and community hospitals can fill that role. To do so, it’s important for smaller hospitals to know their costs and identify areas where they can save money (including their supply chains). That way, they can pass on those savings to consumers and carriers.
  4. Be cautious about investing in population health. Larger health systems and hospitals have faltered when making big investments in population health, so community hospitals should be well aware of their limitations, as well as any potential trouble spots that could arise, before participating in any initiatives on their own.
  5. Engage your physicians in the hospital’s goal. According to additional research from the Advisory Board, doctors at community hospitals are more likely to believe that the values held by top hospital executives are aligned with physicians’ interests. It’s important for smaller hospitals to be transparent with their doctors about the hospital’s objectives and providers’ role in achieving them. That way, they’ll be engaged in the facility’s mission.
  6. Improve community outreach to patients and independent physicians. Often, people who aren’t already patients or providers at a community hospital aren’t informed of how well the facility’s performing in terms of providing cost-effective, high-quality care to patients. So it’s necessary for smaller community hospitals to toot their own horns and discuss their strengths, and how they’re moving to improve on their weaknesses.
  7. If a merger’s necessary, think ahead. In some cases, a community hospital’s best strategy is to fully merge with a larger facility or join a large health system. If your facility is considering this route, your best bet is to look for a potential opportunity while the hospital is still performing well financially. That way, decisions aren’t being made in haste, and your hospital has time to consider more options instead of rushing to get out of a bad financial situation.

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