How to Maintain Financial Stability in Business?
Maintaining financial stability in healthcare is like walking a tightrope. Every hospital has to constantly deliver good quality clinical care in order to earn revenue. At the same time, they have to focus on keeping costs and overheads in control. It is indeed a balancing act that healthcare provides have to follow in order to be financially stable in their business. But this financial stability can come only with proper hospital finance management. This requires the guidance for a seasoned healthcare business consultant.
Healthcare finance consulting experts can suggest the right financial stability measures to keep the hospital up and running profitably all the time. Here are some tips offered by an experienced healthcare business consultant towards maintaining financial stability in healthcare.
Pointers to maintain financial stability in healthcare
Maintaining financial stability in any business is challenging and in healthcare, it is a Himalayan task. This is because healthcare, by itself is an industry that incurs major overheads in order to function smoothly. But still, every hospital can remain financially stable by adopting this 4 pronged approach.
1. Increase Revenue
Hospitals need a constant influx of money to keep their wheels turning. Every healthcare provider must think of innovative means of increasing their revenue. They can enlist the services of a competent healthcare business consultant to give new ideas like these.
- Use events PR and social media to promote the hospital's visibility
- Cash in on the loyalty of existing patients by giving them discounts for their regular health visits and incentives on new referrals
- Connect with independent physicians and offer them incentives or profit-sharing for patient referrals. Encourage them to use your hospital's lab and diagnostic facilities at reduced rates.
Such radical steps have to be taken to augment revenue and increase the cash flow of funds into the hospital.
2. Cut Costs
Even if a hospital has a steady cash flow, it cannot remain financially stable if it does not control its expenses. Some drastic steps have to be taken to cut costs and expense at the hospital like this:
- Take stock of the staff situation at the hospital. Evaluate the performers and the idlers. Weed out the inefficient staff who are a drain on your hospital's income.
- Assess the physician utilization at the hospital. Try to engage physicians and specialists on an "on-call" or part-time basis to avoid having them on the full roster and paying them unnecessarily.
- Take stock of your inventory on a monthly basis. Try to streamline the ordering of medical supplies by ordering only basic essentials and procuring the rest on a need basis.
- Cut operational costs like electricity by using solar panels, natural ventilation, etc.
3. Improve Collections
Hospitals often fail to collect their dues from patients or their service partners. This delay in collections increases the liability of the hospital. every hospital must adopt stringent measures to collect payments like these:
Hospitals often fail to collect their dues from patients or their service partners. This delay in collections increases the liability of the hospital. every hospital must adopt stringent measures to collect payments like these:
- Collect payments from patients upfront as point-of-service payments
- Prompt your service partners like partner-hospitals or physicians to pay on time and follow up in earnest.
- Have all documentation ready to meet the insurance claims of payment to expedite collection from the insurance company.
- Evaluate the utilization of beds, labs, scan equipment and even ambulances at your hospital. If they are not fully utilized, partner with neighborhood hospital and lease them for their use.
- Limit the use of water and electricity by training your staff on their prudent use.
- Use online appointment scheduling and patient registration to reduce paper and stationery overheads.
Apart from this, hospitals must constantly upgrade their core-competency and offer specialized services to cater to the clinical needs of the local community. This will enhance the reputation of the hospital, attract more patients and augur more income. Hospitals should undertake periodical audits to control their expenditure and minimize their costs. This kind of a balanced approach with revenue generation on one hand and cost reduction on the other is the only way to attain financial stability in healthcare.
Every hospital should balance itself financially in the rough waters of the healthcare industry. To do this, it can use an expert healthcare business consultant as its guiding light to reach the shore of success.
