Managing Healthcare Costs and Quality
The objective of healthcare is to provide clinical service to all. But with the ever-mounting hospital administrative costs, healthcare providers are finding it extremely difficult to offer affordable healthcare to all. Nearly 63 million people in India are unable to fund their healthcare needs. This is affecting the very objective of healthcare.
Healthcare service providers are also helpless as 95% of their expenses are due to the overheads and cost of healthcare. The hospital financial management is striving hard to achieve profitability in healthcare by curbing costs. Cost management in healthcare has become a titanic challenge which requires the guidance of an expert healthcare consultant to achieve its goal.
Healthcare service providers are also helpless as 95% of their expenses are due to the overheads and cost of healthcare. The hospital financial management is striving hard to achieve profitability in healthcare by curbing costs. Cost management in healthcare has become a titanic challenge which requires the guidance of an expert healthcare consultant to achieve its goal.
Why is cost management in healthcare so crucial?
There is a sea of change in the world of healthcare. Formerly, the hospital financial management used to focus more on generating revenue. Today, the focus has shifted from generating revenue to curbing costs. Healthcare providers are beginning to realize that healthcare alone is not the only yardstick to measure their operational efficiency. The hospital financial management has realized that to sustain in the healthcare business, it is more important to focus on cost management in healthcare.
Can Indian hospitals offer the best quality healthcare at an affordable cost?
The answer is a definite "YES". Indian hospitals are able to provide world-class healthcare which is at par with international standards. But these healthcare services cost only 1/5th of what is spent for the same in the U.S. They are able to manage incumbent costs to achieve superlative quality in their clinical services. This is possible by following a 3 pronged approach in managing healthcare costs and quality.
How can Indian healthcare providers manage costs and quality?
Indian healthcare providers can manage costs to provide peerless quality in their clinical services by following this strategy recommended by Vijay Govindarajan, Professor at Dartmouth College and Ravi Ramamurti, Professor at North Eastern University.
1. The Hub and Spoke framework
This innovative approach suggests that Indian healthcare providers should locate their major "HUB" hospitals in major cities and the minor health centres as the "SPOKES" in rural areas. Both the hub and the spoke hospital can be interconnected by telecommunication links to help the specialists serve the rural patients remotely. By using telemedicine, even rural patients can get the benefit of best healthcare and hospitals can still manage hospital administrative costs and bring them to a bare minimum.
2. Task-shifting
The hospital financial management is going to be all ears for this great idea. Usually, staffing costs are the major brunt of the hospital expenses and the hospital financial management is forever trying to reduce this. By adopting this innovative idea of task-shifting, expenses incurred as salary to top-skilled specialists and physicians can be substantially reduced without compromising on quality.
In task-shifting, the objective is to transfer routine and mundane chores of doctors and highly-paid specialists to lower-skilled workers. The aim is to create a rung of skilled paramedics with at least 2 years experience to perform these basic clinical tasks. These paramedics are trained to do the preliminary medical chores leaving the specialists to handle only the major operations This task-shifting approach not only reduces the burden of the exorbitant salaries paid for specialists but also solves many issues like physician churn, doctor shortage, etc. With more time on their hands, physicians are able to concentrate more on their core operations and deliver better clinical outcomes than before.
3. Frugality
This could be the key to cost management in healthcare. Indian hospitals must adopt a "minimalistic" approach by being frugal in their expense. This can be done by innovative thinking and clever strategizing. Hospitals can seek the help of expert healthcare consultants in this area.
For instance, hospitals can pay a fixed salary to specialists instead of a pay-per-service model. They can reduce wasted space and unutilized equipment. They can use local equipment instead of imported ones to cut down costs.
Such valuable suggestions offered by Experienced healthcare consultants manage costs and quality at hospitals can prove really effective in the long run.
There is a sea of change in the world of healthcare. Formerly, the hospital financial management used to focus more on generating revenue. Today, the focus has shifted from generating revenue to curbing costs. Healthcare providers are beginning to realize that healthcare alone is not the only yardstick to measure their operational efficiency. The hospital financial management has realized that to sustain in the healthcare business, it is more important to focus on cost management in healthcare.
Can Indian hospitals offer the best quality healthcare at an affordable cost?
The answer is a definite "YES". Indian hospitals are able to provide world-class healthcare which is at par with international standards. But these healthcare services cost only 1/5th of what is spent for the same in the U.S. They are able to manage incumbent costs to achieve superlative quality in their clinical services. This is possible by following a 3 pronged approach in managing healthcare costs and quality.
How can Indian healthcare providers manage costs and quality?
Indian healthcare providers can manage costs to provide peerless quality in their clinical services by following this strategy recommended by Vijay Govindarajan, Professor at Dartmouth College and Ravi Ramamurti, Professor at North Eastern University.
1. The Hub and Spoke framework
This innovative approach suggests that Indian healthcare providers should locate their major "HUB" hospitals in major cities and the minor health centres as the "SPOKES" in rural areas. Both the hub and the spoke hospital can be interconnected by telecommunication links to help the specialists serve the rural patients remotely. By using telemedicine, even rural patients can get the benefit of best healthcare and hospitals can still manage hospital administrative costs and bring them to a bare minimum.
2. Task-shifting
The hospital financial management is going to be all ears for this great idea. Usually, staffing costs are the major brunt of the hospital expenses and the hospital financial management is forever trying to reduce this. By adopting this innovative idea of task-shifting, expenses incurred as salary to top-skilled specialists and physicians can be substantially reduced without compromising on quality.
In task-shifting, the objective is to transfer routine and mundane chores of doctors and highly-paid specialists to lower-skilled workers. The aim is to create a rung of skilled paramedics with at least 2 years experience to perform these basic clinical tasks. These paramedics are trained to do the preliminary medical chores leaving the specialists to handle only the major operations This task-shifting approach not only reduces the burden of the exorbitant salaries paid for specialists but also solves many issues like physician churn, doctor shortage, etc. With more time on their hands, physicians are able to concentrate more on their core operations and deliver better clinical outcomes than before.
3. Frugality
This could be the key to cost management in healthcare. Indian hospitals must adopt a "minimalistic" approach by being frugal in their expense. This can be done by innovative thinking and clever strategizing. Hospitals can seek the help of expert healthcare consultants in this area.
For instance, hospitals can pay a fixed salary to specialists instead of a pay-per-service model. They can reduce wasted space and unutilized equipment. They can use local equipment instead of imported ones to cut down costs.
Such valuable suggestions offered by Experienced healthcare consultants manage costs and quality at hospitals can prove really effective in the long run.
Cutting down costs without compromising quality is the main objective of healthcare providers today. Sustainable existence and profitability can be achieved only by prudent cost management in healthcare done with the help of seasoned healthcare consultants.
