4 Cost Reduction Strategies for Hospitals

Cost of operation can be overwhelming especially for start-up hospitals and if not properly managed can result in lot of financial stress. In the face of dwindling reimbursement, increasing competition, need to adhere to global healthcare standard and other factors, reducing the cost of operation is therefore a major concern for hospitals worldwide.


Here are some effective strategies to reduce operation cost for hospitals

Use hospital records to review your staffing plan
Cost of labour is one of the largest expenses in most hospitals. Careful review of hospital data can help minimise labour cost. Information from hospital data can reveal which shift or period of the year is volume heavy, which departments are over staffed, staff efficiency among other things. The information gotten can be used to assign staff to duty, establish labour expectation, adjust staff contract and implement layoffs.

Outsource some services
In-house operation for certain medical services can be quite expensive. Services like in house medical laboratory can be cost intensive, and as such, can be outsourced by liaising with a commercial facility with a tested expertise.

Eliminate unnecessary expenses
Automation of service processes can help prevent wastage of resources, cut lots of unnecessary expenses and minimise service delay.
For example installing a hospital information system can greatly reduce cost of labour, office supplies and the like.
Automation can be used in several aspect of the hospital like billing, record keeping, laboratory, patient follow up etc.

Routine evaluation for cost leakages
Routine evaluation of daily processes in the hospital can provide useful information on effectiveness of such processes. For example evaluation of number of gauze used during specific surgeries can be used in packaging the different surgical packs.
Evaluation of cost verse benefit of solar power to generator may help guild the decision on the choice of energy.

Each hospital is unique and as such, it’s the responsibility of the management to analyse the hospital and devise strategies that suit their need and capacity.