Question

What are the economic drivers for revenue and profitability of a hospital, and what are the potential strategies to maximize profits and returns on investment??

Answer 1

There are different economic drivers for the revenue and profitability of the hospitals. The first economic driver is the favorable government policy that makes health insurance related policies for the individuals and employers. It drives individuals to the hospitals for the health care services. The second economic factor is the rise in income of the consumers. It has made them to spend on preventing health care also. It has raised the profitability of the hospitals. The third economic driver is the investment in R&D to find new medicines, antibiotics and treatment methods that can solve the issues that were incurable in the past. It has increased the revenue level. The fourth factor is the online connectivity of the hospital with the long distance areas as well as rural areas. Here, patients can book the appointment or telemedicine vehicle can visit them and offer health care. Besides, awareness among the people and hospitals being the part of insurance networks, also help to raise th profitability of the hospitals.

There are following potential strategies to maximize the profit and ROI:

A. Spread health care consultation in the rural areas and bring people to the hospitals

B. Develop alternative treatment plans to the patients on the basis of purchasing power

C. Develop web portal so that patients can access the hospital from the distant areas.

D. Become the part of network of insurance service providers

E. Offer multi-specialty services to attract the patients

F. Develop sound corporate governance on ethical policies. It makes a positive impact upon the patients