From new technology to advances in medical research, the healthcare industry is rapidly changing. One trend that continues is the year over year increase of healthcare costs. In 2018, the average annual premium for family coverage rose 5 percent, and in many states, the costs continue to increase at a rate faster than inflation. As a result, much of the burden is shifting from payers to providers.
The margin of return from Medicare and Medicaid continues to decrease and if hospitals want to not only survive but thrive in today’s healthcare market, they’ll have to get creative in order to reduce their reliance on private payers. Here are five ways hospitals can reduce rising healthcare costs:
- Reduce overhead: Employees are usually the first that comes to mind when someone mentions reducing overhead, but layoffs aren’t necessarily the answer. In some cases, they can do more harm to your bottom line than good. Take a hard look at other overhead costs like your billing, coding and claims processes. Hospitals may be able to reduce costs by optimizing or outsourcing some of the current processes and procedures that simply don’t make sense to manage in-house.
- Embrace technology: Healthcare professionals are generally eager to adopt new technology like diagnostic imaging or robotics but are then reluctant when it comes to introducing new software systems. While they will require an initial investment, introducing a revenue cycle management system, computer-assisted coding or automated transcription technology can save both time and money in the long run.
- Identify and monitor key performance indicators: It won’t do any good to implement changes if you don’t continuously monitor how effective those changes are. Identify key performance indicators (KPIs) such as the number of patients, the average amount of time spent per patient, hours worked per employee, amount of overtime hours, how long it takes to receive reimbursement from insurance claims, etc. Look for patterns and areas for potential improvement. Monitoring KPIs will help you allocate resources where they will have the greatest impact.
- Make smart switches: Reducing costs doesn’t have to mean using less. Hospitals can achieve savings by simply by switching to a comparable product or new vendor. Instead of providing bottled water in the physicians’ lounge considering installing water bottle filling stations. Doing so will also reduce single-use plastic consumption and waste disposal costs. Does your hospital retain multiple vendors for related services? Like the discount your insurance company offers for bundling home and auto insurance, you may be able to negotiate lower rates by consolidating services and using fewer vendors.
- Reward employee ideas for savings: Who better to ask for ideas on ways to reduce costs than hospital staff and employees? Not only will this improve employee satisfaction by making them feel they have a seat at the table, but it also reduces your risk of eliminating something that your employees greatly value. Ask hospital staff and employees to submit their ideas and reward those that are implemented. Because they are the “boots on the ground” they are likely to have suggestions executives may not have even considered. Simple ideas like switching from disposable paper gowns to washable cloth gowns can yield significant savings.
If your hospital is evaluating areas to reduce costs while improving efficiency, consider Fast Chart’s medical transcription services. Our state-of-the-art technology can reduce your transcription costs and deliver reliable results. Contact us to start saving today.