Healthcare News & Insights

How hospitals can cut costs, improve their bottom lines

The evolution of the healthcare industry is changing how hospital leaders approach their finances. With insurers focusing on reducing inpatient and readmission services, many facilities have compensated for smaller profits by cutting operation costs. 

466442319Though not a cure-all solution for financial issues, cost cutting can free up resources for hospitals to implement other important programs that improve their quality of care — and ultimately benefit their reimbursement and bottom lines.

Standardizing care, saving money

Some hospitals have cut costs by standardizing how their physicians deliver care, and aligning their procedures with guidelines from professional organizations, according to the Wall Street Journal.

The goal is to reduce test and procedure overuse by getting doctors to focus on following treatment guidelines and reminding them of the evidence backing those guidelines. Some hospitals do this through further education and training, but others use more forceful methods to get doctors on-board.

For example: Christiana Care Health System based in Delaware changed its computer system so doctors would have to follow the American Heart Association’s (AHA) guidelines on cardiac monitoring to order the procedure.

They redesigned the system by eliminating the option to order monitoring for conditions not included in the AHA’s guidelines. If doctors still had a legitimate reason for ordering the test they could get around this feature, but the change helped prevent doctors from ordering the tests too often for lesser conditions.

Similarly, Christiana Care included a recommended time period for monitoring in the computer system. If patients remained in the building beyond that time frame, nurses would automatically stop the monitoring or ask for a physician’s opinion if they believed it was unsafe to do so.

Researchers found this step cut the number of patients using that technology and reduced the daily costs for monitoring by 70%. But the best part is that these changes led to no adverse effects on patients’ care.

Green ways to cut costs

According to HealthcareFinanaceNews, other hospitals are finding ways to cut expenses by reducing utility usage in the facility.

The Mercy Health System in Ohio received several new demand response contracts to help it reduce its utility usage, particularly during peak hours. These programs pay organizations for participating and for their performance in reducing energy use.

By proactively finding energy-saving opportunities, the system has been able to add millions of dollars to its bottom line.

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