Keeping a hospital in operation is a difficult balancing act. It is simultaneously a business that must be run in a profitable fashion, yet it cannot sacrifice important services that its community needs.
Maintaining a proper ratio of profitability and community provision is indeed challenging, but it can be done. There are hospitals of every size that are both profitable and beneficial, and the Affordable Care Act, even if it is changed, has begun to pave a sustainable path for making sure that everyone has access to adequate health care.
How do some hospitals thrive in a certain environment while others struggle in a similar one? While there are always variables from community to community and facility to facility, what often makes the difference is the efficiency of the hospital. Keeping costs low, revenue steady, and services balanced is key to keeping that precarious balance. Here are some of the areas that often tip the scales.
Poor Medical Billing
The most essential part of keeping a hospital afloat financially is getting paid for services rendered. When personnel doesn’t do a good job with this, the entire operation suffers financially. Unfortunately, this is particularly true in smaller hospitals because their staffs don’t have as much experience in the endless array of insurance providers, and many small-town managers hate to turn delinquent bills over for collection.
For that reason, some hospitals have chosen Billing Advantage to handle this situation. It gives them experienced, devoted personnel for billing that they couldn’t otherwise afford, and it separates the billing and collection process from the local facility so that the revenue can come in without local repercussions.
Inadequate Cost Control
Of course, billing is only accurate if it bills for every cost. Many hospitals suffer financial leakage thanks to poor management of goods and services. If a floor nurse fails to document that an IV line was replaced, that item is an unpaid cost. If personnel are sloppy with sterile items and contaminate instruments that must then be replaced, the autoclave costs go up without a corresponding increase in revenue.
Much of this problem can be addressed with good training, but sometimes it is just the reality of a hectic workplace. And ironically, the rapid scanning of items used with a patient is such a fast process that workers can often forget if they have done it or not. Develop a protocol so that the item is always scanned at a certain point in use so that the overall digitization of records and care is efficient and effective.
Missing The Market
Many people still think of the hospital as the place to go when you get sick or hurt, and that’s the end of it. In reality, of course, today’s hospitals involve physicians’ practices, therapists of all kinds, and various outpatient treatment processes. That is the reason most hospitals today are officially titled “medical centers”.
As a more comprehensive institution, a hospital has the option to add a number of these other services. Those that are in demand will help the hospital’s bottom line, but if the facility invests in expensive space, equipment, and personnel without sufficient local need for it, it turns into a big financial drain.
In order to make the right choices, hospitals need to gather statistics on what conditions are prevalent in their market area, assess the level of competition, and then decide what to add.
Hospitals are an essential part of our health care system. They provide life-saving and life-changing services in towns and cities of all sizes, helping physicians and other practitioners to be more effective in the care they provide to their patients. Keeping these institutions financially sound is vital to the overall health of communities and economies.