5 Ways to Buffer against the Financial Losses of Your Hospital

Everyone thinks that running a hospital is like running a casino! -With money pouring in from jackpots and bumper bonanzas! But, this is far from the truth. Many private hospitals are struggling to make ends meet and some even close down. Is there any way to protect hospitals from financial loss? Let’s analyze.

Why should a hospital run at loss? They charge for everything- check-up, diagnosis, scans, treatment, admissions, room charges, food, etc. This is what you think. But improper operational management for hospitals often spell its doom due to the following reasons

1. Excessive overheads like expensive resources, unwanted equipment, overstaffing, excessive medical supplies etc.
2. Improper staff co-ordination leading to wastage of service, poor delivery of service and ultimately loss of patients as customers.
3. No inventory control leading to wastage, theft or misuse of hospital supplies and equipment.
4. No networking with physicians leading to poor referrals and in-patient income
5. Not competitive in terms of cost and service.

Ok.  So now you know your hospital is running at a loss. What to do next?

1. Identify reasons for loss by data-mining

It is time now to delve deep into data to find out the reasons for the financial loss at your hospital. Use analytics and metrics, review accounts and inventory, equate income with expenses and finally narrow down the loopholes through which money is trickling out.

2. Revamp your hospital administration

Take a bold step and revamp your hospital administration. Scrutinize each department and do away with inefficient staff and extravagant expenses. Streamline inter-department co-ordination. Centralize the organization and make people accountable for all assets of the hospital. Undertake the following measures in cutting costs-

• Cut unnecessary overheads, staff and medical purchase: Your hospital is not a display showroom. Make it more functional and purposeful by retrenching unwanted overheads, staff and cutting down on the extra medical purchases. Retain only what is absolutely essential and do away with the rest. If eliminating is difficult, put resources to alternate use.
• Be granular with supplies and tight-reined in inventory control: Most often it is hospital supplies that account for a major portion of its expenses. Have tight-reined control on inventory and be frugal in dispensing with supplies. This will reduce wastage and make people more accountable.
• Streamline use of technology: Technology in the form of medical equipment and its use can take up most of your money. Do a double check to see if the equipment are being rightly used and if they are earning their worth. If not, there is no point in just hoarding the equipment for vanity’s sake. Unused equipment can be sold off and some of the advanced services can be outsourced.

3. Standardize clinical procedures

Create documents or blueprints of all hospital procedures- diagnostic and treatment. Clearly define everything right form number of physicians, equipment and supplies etc to ensure that nothing is wasted. Outline the steps to help avoid wastage of time.

4. Initiate better networking with local physicians

Maintaining a good rapport with local physicians and establishing a network is vital for your hospital’s success and income. This will give you new opportunities and patient referrals.

5. Offer an extra plus

Outwitting the competition is also important to augment your income as a hospital. Think of ways to offer extra benefits from your hospital in terms of cost or service. You can even think of a specialized line of service which is exclusive and available at only your hospital.

1. Outsourcing some facilities like labs, scans or other diagnostic testing
2. Tying up with other hospitals
3. Putting up your hospital for lease.

Whichever option you choose, never lose hope for financial losses are like passing clouds. They can be overcome with the right approach and attitude. Think clearly and arrive at the right strategy for buffering your hospital’s financial loss using the above tips. But never give up for running a hospital is a noble cause that you should be proud of always.