Question

In: Economics

The health care organization you are an administrator for is seeing a continual drop in operating...

The health care organization you are an administrator for is seeing a continual drop in operating income for the last 5 years. What steps would you take to analyze the situation in order to develop a strategic plan to address the drop in operating income? Remember that operating income considers both revenue and expenses.

Solutions

Expert Solution

Dear Student,

Below are the answer to your question

strategic plan to address the drop in operating income

Abstract

Hospitals today face many challenges including an economic recession, increases in uninsured care and growing competition for outpatient services. However, there are still many steps hospitals can take to increase their profitability amid these economic conditions.

1. Reduce staffing costs by using data to drive staffing decisions

Because labor is the largest single expense for hospitals, it is critical that hospitals are not over- or under- staffing their facilities.Hospitals leaders can consider the use of flexible staffing, such as part-time or hourly employees, and adjust staffing based on patient census data. Leaders should also monitor the efficiency of this staffing by continuously reviewing benchmarking data such as hours worked per case.

Flexible staffing is especially useful for OR nursing staff. OR managers should review clock-in times versus surgery-start times and determine if their staff is consistently arriving before a surgery actually begins. If this is the case, mangers can utilize flexible staffing to allow nursing staff to arrive later so that when surgeries run over, no overtime expenses are incurred

2. Reduce supply costs by better managing vendors.

Hospital leaders can reduce supply costs by working with vendors to improve contracts and encouraging physicians to make fiscally responsible supply decisions.Hospital leaders should not shy away from approaching vendors for discounts.Hospitals can also reduce supply costs be reducing the number of vendors. Goshen, for example, is in the process of reducing the number of vendors in its surgical suite and aims to eventually scale the vendors down to 4-6 companies.

3.Ensure that your OR is utilized by physicians efficiently

All hospitals can benefit from tightening up the efficiency of their operating rooms, but it is especially critical that less busy facilities ensure that their ORs are used as efficiently as possible.

"When physicians' schedules create gaps in the OR schedule, it effects a hospital's ability to staff effectively, which can create significant labor costs for the hospital"

4. Involve physicians in cost reduction efforts.

Hospitals should work to encourage physicians to become more concerned about the costs of supplies and other activities, such as unnecessary tests and inefficient coding processes that may drive up hospital costs.

Hospitals can encourage the use of products from vendors that are cost-effective, but still high quality, especially in areas such as orthopedic implants, which can be considerably costly for hospitals

5. Consider outsourcing the management of some services

During tough economic times, some hospitals may benefit from outsourcing or partnering with other organizations for certain services, such as food and laundry services, and even, in some cases, clinical services

6. Consider partnering with local physicians to reduce competition for outpatient cases

An increasing number of hospitals are joint venturing with local physicians and surgery center management companies to offer outpatient services through the development of a surgery center. hospitals are beginning to focus on the need for a comprehensive outpatient strategy and recognizing the need to partner with doctors to effectively execute on this strategy.

7. Grow case volume by attracting new physicians to your facility

Identifying and attracting additional physicians to bring cases to your hospital is another way that hospital leaders can increase profits. Physician-owned hospitals can bring in additional physicians as partners, while other types of facilities can recruit new physicians who are willing to perform cases at their hospitals.

8. Consider adding profitable service lines

Hospitals may also be able to grow case volume and profits by adding new service lines. However, hospitals need to be careful to do their homework on the expected profitability and ROI for any new lines added, especially in a market where access to the funds required to invest in new service lines may be tight.

9. Consider hiring hospitalist to manage inpatient care.

Hospitals that use hospitalist to care for patients can benefit from the more efficient care and better documentation that specialized hospitalist can potentially provide.Hospitalists may be the most reliable and cost-effective means available for hospital leaders to transform medical delivery in their health system

10. Renegotiate managed care contract

One of the most important ways that hospitals can improve their profitability is by continually evaluating and renegotiating their managed care contracts. Hospitals must demand their fair share of premiums from third-party players in order to subsidize the underpayment of Medicare and Medicaid,

Looking forward


Hospitals that focus on enacting these best practices are likely to see improvements in their profitability; however, hospitals can also benefit by using today's economic conditions as an opportunity to improve their overarching approach to business, creating a more sustainable organization in the future.

If you like the answer, Kindly subscribe and up vote

Thank You !!


Related Solutions

Let us assume that you are a health care administrator. Management of any health care organization...
Let us assume that you are a health care administrator. Management of any health care organization contains many challenges, but also provides equal opportunities. As we are aware there are four levels of long term care available: A Skilled Nursing Facility (SNF) An Assisted Living Facility Subacute & Acute Care A Community Senior Housing Program As a health care administrator, discuss how would you integrate each level of service? Include in your discussion the challenges you would encounter during such...
How would you, as an administrator of the health care organization, address the implications arising from...
How would you, as an administrator of the health care organization, address the implications arising from the court's decision in the Darling v Charleston community Hospital case
Managing Health Care Quality Imagine that you are a hospital administrator at the Sunlight Hospital in...
Managing Health Care Quality Imagine that you are a hospital administrator at the Sunlight Hospital in California. The main complaint among the patients is the quality of care. Your job is to understand the state of the hospital, create value, increase efficiency, and turn the facility into a local hospital of choice. Whenever you are making visits in various wards to meet the employees and the patients, you hear how the patients love the hospital, but they would like to...
Choose a health care organization of interest to you. Identify a health care issue/topic relevant for...
Choose a health care organization of interest to you. Identify a health care issue/topic relevant for this organization (workplace safety, patient safety, quality, fraud and abuse, injury, etc.). Discuss the relevance of this issue or topic for the organization. Evaluate the organization's ability to meet the legal and ethical requirements based on agency regulations.
You are a hospital administrator assigned to oversee patient satisfaction and you have two health care...
You are a hospital administrator assigned to oversee patient satisfaction and you have two health care workers that have been neglecting patients because of their difficulty in working together due to their dislike for one another. What approach(es) would you use to try and resolve the conflict between the two workers to promote better patient quality care?
You work for a small health care facility with three doctors, an administrator, one nurse and...
You work for a small health care facility with three doctors, an administrator, one nurse and four office staff members. The facility has been considering an intranet for the past year. You have been asked to create a list of functions that could be included in the intranet. The only guidance that has been given to you is that the intranet should be useful to office staff, management, and the clinical staff. Include in your discussion a memo to the...
How could you use information to communicate cross-culturally as a health care administrator?                           &nb
How could you use information to communicate cross-culturally as a health care administrator?                                                                                
imagine you are adapting this policy to the health care organization at which you work (or...
imagine you are adapting this policy to the health care organization at which you work (or where you wish to work). Describe the organization and discuss the following: The stakeholders involved in policy formation and their impact on health care policy formation and structures. The response you expect from those stakeholders. The specific impact this governmental policy will make (positive, negative, indifferent) and why?
Imagine you are the CEO of a health care organization. You would like to implement a...
Imagine you are the CEO of a health care organization. You would like to implement a patient-centric health information management system (HIMS) within the organization. This system needs to take into consideration health care costs and safety. You need your executive team on board to ensure the successful implementation of this patient-centric health care technology information system. You plan to present a detailed report to your management team about the patient-centric approach, its benefits and challenges, and why your organization...
Differentiate between the operating budget and capital budget in a well-managed health care organization. What types...
Differentiate between the operating budget and capital budget in a well-managed health care organization. What types of expenses are included in each?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT