Cost reduction strategies in hospitals are a growing concern, especially after the pandemic. It’s important to reduce costs and save money where possible without damaging the hospital’s efficiency and quality.
Hospitals can even improve their service quality by making just a few changes that will make a huge difference in their budget. Let’s take a look and how and why.
Savings From Switching to Energy-Efficient Lamps
Switching to energy-efficient lamps in hospitals and can have a great turn out for savings since energy costs used inside hospitals and other medical entities can be a huge burden.
By using smarter energy management techniques, hospitals can save a lot of money while also helping the environment.
Strategic Energy Management (SEM) has an important relationship between energy savings and cost savings:
- LED lights vary in brightness levels and proper lighting controls will allow hospitals to customize the light in a room to the patient’s health and comfort.
- There are also LED lights with dimming features that permit health care staff to adjust the light levels according to the patient’s needs. This also promotes relaxation and alertness.
- To add, many LED lights today are used with smart lighting controls, being quite convenient.
Energy-efficient lighting needs an initial investment, though this investment will pay off in the long run. Resurrection Health Care reported a huge annual saving of around $900,000 after changing to energy-efficient lighting in their facilities. This proves that making every room energy-efficient has great positive effects on hospitals cutting costs
Savings From Standardizing Environmental Services
The price of healthcare-associated infections (HAIs) is growing; one in every 31 hospitalized patients will develop a medical-acquired infection. While good quality environmental services may seem to clash with cost reduction in hospitals, they actually reduce the risk of HAIs by around 5%. Apart from cost savings, standard environmental service will also better patient flow and give a high perception of a clean and neat sanitation.
- Many purchased services are managed on a local level and by several vendors. Meaning that hospitals can have a hard time when tracking their total spending as well as they track their supplies.
- A lot of hospitals also manage their service contracts with end-user departments, which also makes it hard to collect data to analyze properly.
- Environmental, social and governance performance (ESG) should be included in national health system rankings. By standardizing these metrics, hospitals can measure their real impact, giving way to develop better practices.
A study from Health Affairs argues that by using environmental services in hospital cost reduction strategies, savings can extend to $5 billion within the next five years of its implementation. This means that in ten years that number would increase to $15 billion.
Savings From Reducing Delays in Billing
One of the most common problems are delaying payments. Giving a bigger grip to payment terms is one way to improve timely payments:
- Customers will be more willing to pay faster if they are required to.
- It helps to manage expectations and gives customers time to schedule payments. This allows businesses to significantly improve their cash flow.
- Profit margins will also be affected by estimating the peak month profit and its corresponding reduction.
Using this approach can also be extended to other projects, where the project management can agree to make a change in both the front and back end.
Savings From Single-Use Medical Devices
Reprocessing used medical equipment can save costs in hospitals for up to 50%:
- A new device cost around half as much as a reprocessed one. This creates a huge savings amount in the long term.
- Reprocessing used medical devices still provides excellent quality patient care. Furthermore, these devices are Inspected by the FDA to make sure of the quality.
- There are reusable devices which can be perfectly used several times.
- Reused devices are much more friendly to the environment.
- Reusable non-critical medical devices are also a great for cost-savings. Although, it is necessary to balance the environmental concerns with the need of infection control.
The cost-reduction measures may vary from one hospital to another, but they are very significant.
Staff Training and Management
Hospitals today are facing staff shortages, which makes training, controlling overtime, retention and recognition programs important when considering a cost-cutting strategy.
The importance of training and developing staff has a big connection to a hospital’s savings. More training and development opportunities are huge incentives for workers to stay, which contributes to a bigger long-term cost reduction.
In a national survey, 70% of the respondents said that additional support in training and development gave them confidence in their employers and helped them stay in their position. Considering a different generation, Millennials reached 87%.
Weigh Food Portions
A great way to reduce waste while saving some money is with the proper adjustment of meal potions. The kitchen staff can weigh every portion which will positively affect the costs in food.
A patient survey can also help improve food quality and its taste.
It can also help to contact a food waste tracking company to assess the situation of your food waste.
A study published by the director of Facility and Technology Services at Providence St. Peter Hospital in Olympia he water conservation can save a 390-bed hospital at up to $250,000 a year.
Good water pipe care to avoid leaks and water saving toilet flushes like motion sensors are a great example of where to save water.
Most appointments and queries are still done via phone. This means the staff will be too busy on the phone instead of doing other, necessary tasks and in turn will have an impact on performance and costs.
By using a medical service answering provider you can avoid this problem.
Improve Temperature Management
Just like a family home, hospitals need to make sure they manage their temperature in each room efficiently. Heating utility bills can always be reduced with proper thought, and this can have a big impact on monthly cost savings.