Quick Tips to Cut Down Your Hospital's Overhead
Written by John McMalcolm
How Can You Cut Down on Your Hospital's Overhead?
The cost of healthcare in the United States is the highest in the world, and it is rising at a faster rate than the average income of Americans.
A significant percentage of Americans are forced to delay or forgo needed medical treatments or examinations because they have problems paying their medical bills.
As a result, some hospitals are losing customers and struggling to stay afloat. It is difficult for hospitals to remain profitable if they are not drawing enough customers because of their high overhead costs and low profit margins. One thing that hospitals can do to stay competitive is to reduce their overhead costs.
Re-assess Staffing Needs
The wages of your employees make up a large portion of your hospital's total overhead cost. If you spend some time reassessing your staffing needs, you may find that there are ways to reduce your staff costs without compromising efficiency and quality.
Identify employees who are not really essential to the operation of your hospital, as well as those who are overqualified and therefore overpaid.
Depending on circumstances, you can choose to release them, demote them, reduce their wages or move them into part-time positions.
These decisions are difficult to make and can have a negative impact on the morale of your staff, but they are nonetheless necessary if they can help your hospital remain profitable.
Get the Best Deals on Supplies
It is essential that you re-negotiate your contracts with your suppliers from time to time to ensure that you are getting the most competitive prices for your supplies.
If you find that your current suppliers are not giving you the best deals, you can do comparison shopping by getting quotes from other suppliers.
Consider the option of buying your supplies over the Internet because online suppliers are known to offer lower prices. Additionally, you can save substantially by getting lower shipping rates.
Renegotiate Lease Agreements and Refinance Debt
Another way to reduce your hospital's overhead costs is to restructure equipment leases.
If there are pieces of equipment that are not being used frequently, you should consider leasing them on a per-procedure basis instead of paying a monthly rate.
One disadvantage of leasing equipment on a per-procedure basis is that it can cause some scheduling problems for your physicians. Now that interest rates are low, it may also be a good idea to refinance your loans.
Monitor Miscellaneous Expenses
Miscellaneous expenses can add up to a sizable amount if they are not properly controlled.
Some of the things you can do to reduce your miscellaneous expenses include finding the best rates for professional services such as accounting and legal services, monitoring long-distance telephone calls and determining the most cost-effective billing option.
Also, make a point to check all your hospital's bank statements to ensure that all the charges listed are correct.
Minimizing overhead requires constant effort and commitment, but it is a worthwhile endeavor that can significantly improve your hospital's competitiveness and profitability.
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