Any business aims at procuring profits in the long run and even though healthcare is the most noble business of all, profitability and viability are crucial factors here too. Financial navigation is of paramount importance in healthcare because the medical landscape is constantly evolving and unpredictable. For this, it is quintessential that you learn to manage your costs at every step without compromising on the quality of healthcare that you provide.

Healthcare is unique as an enterprise and cost-cutting strategies that work in other segments cannot be extrapolated to fit into this sphere. The most prominent reason for this is that while dealing with the health and the lives of patients, any cost-cutting technique that involves even a tiny bit of compromise on quality is 100% intolerable. Hence, you should never aim to achieve cost reduction in healthcare by downsizing the quality of equipment, medical supplies, skilled healthcare team, hygiene and sanitation, infrastructure details, safety measures etc. This is because a small lapse in these factors can lead to a big catastrophe. Any cost-cutting measure that can cause a detrimental effect on patient experience or well-being must be ruled out at the very onset.

Cost reduction in healthcare facilities necessitates an in-depth analysis of the impact that it is likely to cause and has to be implemented after thorough brainstorming, planning, monitoring, and reviewing.

Some popular means of cost reduction in healthcare are

 1. Use sustainable methods of construction and energy

This method is for big set-ups like multifloored hospitals. Instead of spending a bomb on electricity bills, you can plan to unleash renewable sources of energy like solar power by incorporating solar panels in your hospital. Many electrical fixtures can run using this in-house harnessed solar energy.

This can cut down your electricity bills in a major way. You can also invest in power-saving instruments and machinery like LED bulbs and five-star graded energy conserving gadgets.

You can also plan for rainwater harvesting systems which can store natural rainwater for your hospital’s use, and this can replenish your water demands and cut down on your water bills.

2. Rent or lease instead of outright purchase

Cost cutting can be done if you take the decision of leasing or renting expensive medical equipment. Healthcare equipment is extremely costly and needs constant upgradation due to rapidly evolving research and technological advances. If you choose to lease, you can not only save on costs of procurement but also leap over the hurdle of medical equipment becoming obsolete or outdated. You can renew the contract of lease with your medical equipment supplier, and upgrade to newer and more advanced models after every term. You can also save on the cost of maintenance, depreciation, etc. if you lease medical equipment. However, select the medical equipment supplier after in-depth study and scrutiny after checking that he/ she is reliable.

3. Outsource

Space is a big constraining factor, especially in metro cities. You might want to provide numerous services to your patients under a single roof, but your hospital may lack the infrastructure and the space needed for these. If this is the case, you should not hesitate to outsource certain departments and services to reliable partners. E.g., laboratory services, administrative departments, record keeping and billing department,s etc. can be outsourced to dependable agencies. This will reduce your space costs in a big way.

4. Prevent staff turn-over

Healthcare is a highly specialized segment that necessitates the employment of a well-trained and highly skilled team. If your attrition rates are high, you will end up spending a ton of time, effort and money in recruitment, credential validation, training, and counseling of inexperienced staff. Cut down on the cost of attrition by using good workforce retention strategies. These can include the provision of a happy work environment, incentives, awards, flexible work hours, family health plans, and insurance.

5. Train your staff in cost-saving protocol

Every member of your team should be trained to incorporate cost saving in their daily protocol. This can be as simple as switching off lights and fans when you leave a room to complex protocols such as machine operation in an energy-saving way.

6. Digitalize to minimize

Understaffing is a widespread problem in big hospitals due to the lacuna in skilled talent. One major cost in hospitals is the skyrocketing accumulation of overtime. To cut this cost, try to use electronic systems and computerized or digital solutions wherever possible. E.g., Use a digital kiosk to note down preliminary history and use hospital management systems to keep records and share medical information.

To summarize, making a healthcare unit profitable in the long run is not possible without an intense focus on cost reduction at every step. Minimizing costs in healthcare without any compromise in patient care and deterioration of patient experience is a challenging task, however, it is possible to achieve this difficult balance with guidance from healthcare consultancy firms. These firms have a team of specialists who are adept at providing tailor-made cost-cutting strategies exactly fitting your hospital’s needs, fund flow, and working ethos. Hospertz is a leading healthcare consultancy firm of India that can help you in this endeavor.

Blog has been written by Dr. Vishal Jadhav, a veteran in the field of hospital consultancy with a rich experience of more than 20 years and founder of the Healthcare Consultancy. Firm, Hospertz.

Dr. Vishal Jadhav, Director

hospertz@gmail.com
+91 9867712705/ 9820833149