Hospitals are fundamentally businesses, so owners and administrators must ensure that they perform well financially, just like any other enterprise. The recent coronavirus pandemic has undoubtedly put a huge strain on hospitals' finances. However, a recent analysis revealed that many hospitals were struggling financially before COVID-19, recording a 21.3% fall in operating margins from 2018 to 2019. Regardless of the numbers, you can improve your hospital's financial performance by following several proven strategies and techniques. Below are some helpful tips worth knowing to boost your hospital's financial performance.
1. Limit Your Readmissions
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Research reveals that out of five elderly patients, one was readmitted to the hospital within a month of discharge, which cost Medicare about $15 billion annually. Hospital readmissions are stressful for patients, but they can also negatively impact your revenue. Your facility will pay huge penalties to the Centers for Medicare and Medicaid Services (CMS) and other health insurance payers if it has high rates. Therefore, it is prudent to include a huge decline in readmission rates in your hospital cost reduction plan to avoid paying hefty penalties. You can reduce readmissions by improving your patient engagement, so your patients and families can understand their duties in the recovery process. Additionally, you can ensure that your pharmacy can offer any unique medication needed after discharge to lower your rates.
2. Invest In A Great Revenue Cycle Management Solution
Revenue cycle management for healthcare is perhaps the most vital function for hospitals to maintain a strong financial standing and treat their patients. Many healthcare providers operate in silos throughout the revenue cycle but can rely on revenue cycle management solutions to better manage their finances. This way, hospitals can become more competitive and improve their bottom line.
3. Avoid Wasteful Supply Use And Testing
Many hospitals discard several supplies without even using them, leading to a lot of supply waste that can harm finances. As such, it is prudent to recycle all usable supplies to put them to good use instead of throwing them away. Furthermore, you can educate your staff on the financial consequences of wasted hospital supplies to make them more conscious of wastage. Additionally, organize your supply room and discard expired products. You can also establish a strong supply chain that allows your facility to receive new supplies only when it needs them. Also, it is common knowledge in medicine that physicians routinely order unnecessary and wasteful tests on patients. These needless tests cost about $200 billion annually, so you can train your frontline staff to discuss patients' individual needs to reduce the number of unnecessary tests requested.
4. Promote Patient Satisfaction
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Many experts agree that high levels of patient satisfaction can lead to improvements in your hospital's finances. This is because patients are more likely to return to your facility in the future if they are satisfied the first time. A 2016 study suggests that medical facilities that offer better patient experiences enjoy about 50% higher profit margins than their counterparts providing an average patient experience. Consequently, boosting patient satisfaction may be the perfect strategy to enhance your hospital's financial performance if it struggles to reduce waste or cut service costs.
