Cost efficiency and reductions top the priorities list of nearly every financial leader in healthcare. But is the cost-cutting tunnel vision too narrow? Or are there better options for boosting the bottom line?
In a recent survey of the HealthLeaders Media CFO Exchange, the number one priority anticipated by CFOs for the next three years is cost reductions. Yet maximizing revenue came in eighth on this list of nine priorities. I find this one-sided view interesting.
Every financial leader has heard the expression “you cannot cut your way to prosperity,” yet with all the concerns over Medicare reimbursement decreases, what you know you should be doing versus what you are doing don’t always jibe. I’m not suggesting CFOs stop looking for ways to reduce costs, but as our survey results suggest, you may want to concentrate equally on protecting and improving the top line.
Here are four opportunities beyond cost-cutting for your hospital or health system to enrich its financial picture:
1. Physician retention: It’s not enough to recruit the best doctors for your hospital – you also have to keep them, or you are essentially throwing thousands of dollars out the front door. Physician recruitment dollars are the subject of more than a few healthcare conferences, yet physician retention is rarely mentioned by financial leaders.
In June I wrote about how J. Gregory Stovall, MD, senior vice president of medical affairs for Trinity Mother Frances Hospitals and Clinics in Tyler, TX, crunched the health system’s recruitment and retention numbers for his CFO.