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Four Ways Healthcare Organizations can Improve Their Financial Performance
The core goal of healthcare organizations is to provide quality patient care and healthcare services. That being said, healthcare organizations also need to focus on their financial performance and ensure that their facility remains profitable. Fortunately, healthcare organizations like hospitals can introduce several strategies to increase revenue while maintaining a high level of patient care. With that in mind, here are four ways healthcare organizations can improve their financial performance.
1. Train staff to deliver exceptional patient care
Patient care is directly linked to financial performance and many studies have found that patient experience impacts revenue. Healthcare organizations should be aware of this and develop a strong patient care strategy to increase profitability. One of the most effective ways to improve the patient experience is by training healthcare staff on how to deliver exceptional patient care. Make sure that you offer employees regular training to update their skills and expertise in patient care, and best healthcare practices.
Focus on improving patient loyalty and decreasing patient turnover to further boost revenue. According to research by the Harvard Business Review, increasing retention rates by just 5% can boost profits by 25% and 95%. With that in mind, it is far more cost-effective to focus on retaining existing patients rather than winning over new patients.
2. Utilize financial management software
Managing healthcare finances and accounts can be a difficult and time-consuming task. Luckily, there is a massive selection of accounting software and tools that can make financial management easier. Download financial management software to monitor operational costs, track your monthly budget, and maintain accurate financial records. You should also consider arranging a yearly claims audit to check for financial issues such as overpayments or medical billing errors. Adopting good financial management will mitigate financial risks and improve your financial performance in the long-run.
3. Negotiate better deals with vendors
Supplies are one of the largest expenses in healthcare organizations. Negotiating lower deals with your vendors is a simple way to slash your overheads and increase your bottom line. Speak to your existing vendors to see if they can offer discounts if you order supplies in bulk. Although, make sure that you monitor your inventory closely to ensure that you don’t order supplies that you don’t need. If your existing vendor is unable to offer a discount, then shop around and consider switching to a new vendor to reduce supply costs.
4. Use data to control labor costs
Labor costs are another large expenditure within healthcare organizations. Healthcare facilities must ensure that they have adequate staff cover to meet patient needs and provide quality care but at the same time, they should avoid overstaffing areas. Healthcare organizations should monitor staff data closely to help them identify trends and keep labor costs to a minimum. This data can also be used to make informed decisions when it comes to hiring, assigning overtime, or making redundancies. You could consider outsourcing staffing if you notice that a certain area of your organization has high labor costs.
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