Steps to Improve Profits

We live in a dog eat dog world. The competitive nature of the global market has put pressure on all types of businesses everywhere. And the medical industry just like any other revenue generating body suffers from the same global market pressure that is part and parcel of running a business.

With competition growing every single day, it is getting tougher for hospitals to thrive as compared to earlier times. Moreover, the several revenue related changes that has happened over the past few years in the medical industry has made it even more difficult for hospitals to make healthy profits. Some of these changes include. 

  • An increase in the number of outpatient surgery centers and urgent care centers has led to dwindling market growth.
  • Lower profit margins due to a shift to value based and bundled payments.
  • Referral sources have also reduced because physicians prefer to work under contract for specific hospitals.
  • Patients have also started to become more value conscious which has forced price cuts. 

Such changes in the economic environment has been hard on hospitals. But there are certain steps a hospital can take to help with their falling budget and profit margins. Let’s take a look at a few.

  • Revise and increase the number of services offered – There are hospitals that specialize in treating specific conditions. Some of them have seen success given the quality of their service. But when a hospital is not doing well financially, it would be advisable for them to follow a more holistic approach to healthcare. Apart from providing patients with a wider range of usual services such as surgery, hospitals must also work towards partnering with other providers to expand into areas such as nutrition counselling and wellness programs.
  • Services must be patient centric – Although hospitals have to focus on patients’ outcomes for certain conditions and illnesses due to mandates from the feds, they must also pay attention to outcomes that are important from the patients’ point of view, such as treatment length and total recovery time. This way they can gain ground on their competitors who offer similar quality services.
  • Brand value – It is no surprise that well renowned facilities receive more traffic than smaller organizations. This makes sense, as the more famous institutions have built their credibility through consistent delivery of quality services. Newer, less popular hospitals would obviously have a tough time competing with the likes of such established powerhouses. For this reason, the smaller establishments must focus on improving their brand value by focusing on any and all of their achievements such as successful press coverages or new innovative features that they have which other hospitals don’t. 
  • Market growth – It is important for a medical institution to provide services that make them look more attractive to the consumers. Being upfront about the costs is one way they can pull in more traffic. This way value conscious customers feel more comfortable as they wouldn’t have to deal with hidden costs and payers would also be more inclined to work with such organizations as they would have clear financial data. 

As we can all imagine, it is not easy to make profits in this competitive, cutthroat environment. But when we have quality on our side and add a dash of planning and a pinch of smart management to it, anything is possible.