Learn how to take control of your health system’s cost savings by adopting these short and long-term IT opportunities.
After caring for patients through the worst of the COVID-19 pandemic, hospitals, health systems, and their teams are now battling another crisis – the economy. The financial strain and challenges facing the healthcare industry today are staggering and continue to be a top issue for most, if not all, healthcare CEOs.
Who Should Read This?
IT leaders looking to reduce spending within their departments
Healthcare system executives focused on cost saving opportunities that help retain staff and increase patient experiences
Anyone who is interested in options for improving the cost of healthcare IT
The Problem
As a whole, the healthcare industry has been experiencing difficult clinician shortages for years, with hospitals and health systems operating in the red largely due to a competitive labor market requiring expensive labor contracts. Patient volume has also increased causing industry pressure, partly due to patients choosing differing modes of care – a new shift that’s demanding organizations to improve productivity and spending. Adding to this is the already high expenses for drugs and medical supplies, mixed with rising inflation and declining operating margins, leaving the healthcare industry in a financial crisis.
These unprecedented challenges hit the industry hard in 2022 and are expected to affect organizations well into 2023. There are now many hospitals and health systems entering 2023 with credit downgrades and revisions that is mostly based upon their increased labor costs, resulting in negative cash flow. And in a recent McKinsey study, the estimated annual US national health expenditure, due to inflation, is likely to be $370 billion higher by 2027 compared to pre-pandemic times. These stressful financial situations have left healthcare systems increasingly focused on discovering critical cost saving opportunities to not only keep themselves afloat, but to continue providing care to their communities.
What Healthcare Leaders Can Do
With health systems largely focused on managing their costs, it is important that healthcare systems find the right balance between providing a quality patient experience and finding organizational cost realization. According to Harvard Business Review, health systems that cut spending in staffing, equipment, and supply areas actually hinder delivering quality patient experiences. Equally vital is to avoid preemptively cutting jobs, especially in an already fragile workforce environment, until all cost saving opportunities have been examined and implemented. Otherwise, you risk creating a burn-out environment, with distracted and overburdened providers and staff, and providing poor patient experiences, who potentially could experience increased treatment costs or safety risks as a result.
Knowing that many organizations will be faced with cost control measures and budget cuts in these upcoming years, an investment in the right technology, and a proper audit of already acquired tech, can greatly assist in the identification of opportunities and realization of cost savings in both the short and long-term. Organizations should focus first on their short-term cost saving capabilities and then turn to the long-term cost saving opportunities.
Download our white paper to learn more about:
- Decommissioning Systems
- EHR & ERP Top of Use
- Retooling PMO and Digital
- Driving Operational Efficiency
- Pulsing Project Needs
- Conducting a Deeper Application Rationalization
- Managed Services
- Business Resilience
