For some healthcare organizations, budgets can stretch very thin. Previous years have seen a spate of rural hospital closures grab headlines, but these aren’t the only members of the medical community at risk. Many providers face increasing financial strain, which emphasizes the importance of seeking out strategies to reduce healthcare costs.
Profitability and healthcare are not two words that people often want associating with each other. As a medical practice, you understand that your priority is the care for patients and the protection of their well-being — but you cannot do that if your practice closes. Reducing costs and increasing net revenue is essential for development and the future success of your practice, clinic, or service.
Cutting costs doesn’t have to be the laborious, complicated, and time-intensive task it appears to be, however. There are plenty of simple strategies to reduce healthcare costs that are available to you — strategies that you can start to implement immediately.
Appointment reminder systems are integral to any modern healthcare provider. Non-attendance of sessions can severely impact your ability to not only care for patients but also grow as an organization. With as many as 40% of healthcare appointments missed, this presents a significant loss of revenue for your medical practice.
However, there are ways around this problem — or at least, reduce its impact. Appointment reminders have been shown to increase attendance rates by up to 36%, so the introduction of reminders could enable your healthcare organization to increase its revenue stream dramatically. However, while some systems can help as part of your strategies to reduce healthcare costs, others are not so effective.
Studies into the effectiveness of healthcare reminders have highlighted that automated appointment reminder software is far more beneficial when it comes to reducing costs and improving ROI than when compared to using live agents, your employees, or even practice management.
Care coordinators and administrative staff tasked with reminding patients of their schedule by using texts or phone calls absorb a lot of time and money. Not only is this inefficient when it comes to the consumption of resources, but it also diverts attention away from other skill-based tasks that could provide greater profitability for your organization.
Integrating reminder software with your appointment schedulers, enabling it to automatically submit customized messages to your patients that informs them of their treatment and service commitments, can result in both:
In any aspect of project management, from running a healthcare organization to a small commercial business, it’s easy to become complacent with spending when you’ve got to focus on other matters. In the medical sector, this problem can be even more significant, as when it comes to caring for patients, menial tasks can be easy to neglect.
Cost analysis of your expenditure is exactly the kind of job you might put off when looking to secure other service elements, but in reality, it plays an important part in cost savings and is a powerful strategy for reducing healthcare costs. Why? Because you could be paying out for services, goods, and resources that you don’t need, increasing costs while not receiving any additional benefit — or not enough benefit to justify the cost.
For example, many healthcare organizations continue to use fax machines to transmit documentation, but digital faxing can provide the same functionality, without incurring the significant costs of old technology. If you don’t look at the costs you are paying out, you’ll never be aware of places within your healthcare organization you could optimize for reduced spending.
Analysis of expenditure is critical for identification of problems, but analysis alone won’t solve inefficient practices. Following your investigation, steps must be taken to reduce overheads based on the information you’ve acquired.
Take the discoveries of your analysis and evaluate areas where you could potentially see savings. Common areas where you might have found problems include overpaying for suppliers and equipment, forking out too much for insurance premiums, and even maintaining unnecessary or inefficient staff — if you’ve recently updated to more efficient methods like automated reminder calls, is your front office staffing now over saturated?
You can then implement strategies to reduce healthcare costs by shifting where you are investing your money. Your analysis may have found you are paying too much on accounting fees, therefore you find a new accountant. It may instead show that you are running marketing campaigns that aren’t bringing in any new patients, so you cease this kind of acquisition activity.
Keeping costs down in healthcare can often be about smart investments. Don’t accept fees for services just because that’s what you are used to paying. Constant optimization of costs is crucial to keeping practice doors open.
82% of people will stop using a business if they have a bad customer experience, or are unsatisfied with what is on offer. In healthcare, there isn’t always the option to go elsewhere, but if you have competing services in your area, there is a risk this can occur. And that is a problem.
Data shows that retention of patients has a direct effect on profitability and revenue. This is because encouraging repeat visits is more cost-effective than acquiring new patients. Finding new consumers for your healthcare services can be expensive.
Combined that with the fact that retained patients are more likely to provide greater investments in terms of services and treatments, and you’ll find you reduce your expenditure by making sure more of your patients return for more sessions and appointments.
You don’t want to elongate treatment courses unnecessarily, but you do want to provide a quality and convincing service that brings individuals back when appropriate. Maintaining patient satisfaction is core to this, but how can you introduce this idea into your strategies to reduce healthcare costs? What can you do to keep patients coming back, reducing your overall expenditure while also increasing revenue?
As with the automation of healthcare reminders, the industry is constantly developing ways of offering treatments and care plans. From new technologies to medical discoveries, available resources are adaptive and can sometimes change overnight.
You may also find that previously un affordable tech and treatment options eventually become financially viable, becoming cheaper to operate as time goes by, as their commercial value drops. The key principle here is industry awareness.
Actively seeking out new solutions for your healthcare organization means you’ll be more likely to find ways of replacing or adapting current systems to reduce expenditure. A current example of this is the adoption of the PillCam over the traditional Endoscopy.
Cost-analysis research into the procedure has discovered that in some circumstances, it can be 800% cheaper to use the PillCam over standard tube-mounted camera techniques. Not to mention being more attractive to the patient, and a safer alternative as well. Essentially, if you know what is available to you, then you can integrate it with your practice as part of strategies to reduce healthcare costs.
If you are interested in even more technology-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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