Hospitals and health systems continue to face demanding conditions and financial challenges well into 2023, including increased administrative expenses, a healthcare worker shortage, and increased labor costs. And although there has been a stabilization in operating margins over the past several months according to several industry reports, the trendline continues to show some organizations remain challenged. This has created the need for hospitals to adopt continuous cost optimization measures and labor productivity efforts. As much as 2023 is expected to be a challenging year, it is more important than ever for hospitals and health systems to be strategic and efficient in their operations, look at current revenue streams, and plan for new ones.
The top revenue-producing departments in a hospital typically include surgery, cardiology, and cardiovascular services, though other departments are increasingly becoming more significant sources of revenue and expense. For example, neurovascular and neuro-interventional services can also be a good source of revenue. These services often address complex neurovascular problems but can also be used to treat a variety of other conditions such as chronic headaches and spine disorders. Consequently, these services can be a profitable source of revenue for hospitals.
How Does Strategic Planning Increase Hospital Revenue?
Hospitals can generate additional income and enhance their financial status by adopting new or innovative ways to increase revenue. These strategies may include diversifying service offerings, expanding the scope of services, modernizing, optimizing operational processes, focusing on marketing initiatives, and leveraging data and analytics. In advance of any major changes that need to be made which will help the hospital anticipate changes in the environment and adapt accordingly, the strategic planning process should be initiated. Strategic planning is vital for hospitals to set long-term goals and objectives, identify areas of opportunity, and develop strategies and tactics to reach those goals. This process can help ensure a hospital is taking the steps needed to improve service lines, generate new revenue streams, optimize operational performance, increase overall profitability, and adapt to changes in the ever-evolving healthcare landscape.
Hospital executives often have a general understanding of the strategic planning process, but because they are operating in an increasingly complex and competitive environment, may need assistance. Support may be with the actual strategic planning, data analysis, process improvement, and/ or implementation of the plan. Many organizations need assistance in developing a comprehensive strategy and plan that takes into consideration the nuances and complexities of a service line or operational processes. Additionally, hospital executives may need assistance in setting goals and objectives, measuring progress, and implementing the plan. Guidance on strategic planning, process improvement, data analysis, and project management can be obtained by bringing in a healthcare consulting firm with the industry knowledge and insight needed.
Benefits of Hiring Consultants for Hospitals
Corazon believes a key consideration in making the choice of a consulting firm is whether they are dedicated to the specific area of health care that is needed. For example, if a hospital is interested in optimizing its cardiovascular, neurovascular, or surgical services service line, finding a consulting firm that is dedicated and experienced in those areas of service is preferred over a company that provides consulting in multiple areas. Hiring a niched healthcare consulting firm instead of a big firm can provide hospitals and health systems with a more specialized and tailored approach to their needs. Niched firms often have more intimate knowledge of specific aspects of the service line, such as regulatory matters, strategic planning, operations optimization, and specific data analysis. A niched firm, such as Corazon, can provide more personalized service and support that aligns more closely with the hospital’s or health system’s needs and are often more cost-effective than big consulting firms. (Check out our team of expert consultants here)
Corazon believes that the best consultants have deep domain knowledge in their industry and can explain complex issues so that team members can easily understand. They should be able to clearly communicate how they will work to solve problems and what the benefits of their solutions are. Another consideration is trusting the consulting firm can deliver consistent results and maintain a certain level of desired quality with regard to employee retention. Building trust is difficult with a high turnover rate, consistency may be lost, which can lead to poor service quality. Corazon also believes that the hospital/ health system needs to consider the consulting firm’s experience and track record of success and expertise in areas such as strategic planning, process improvement, data analysis, and project management. In a nutshell, the hospital/ health system should be assured that the consulting team is highly qualified, experienced, and reliable.
Bringing in a healthcare consulting firm can benefit a hospital in other ways as well, such as by providing expert guidance on identifying areas of waste and suggesting areas of improvement, assisting in streamlining processes, identifying cost-cutting initiatives, and looking for ways to optimize the ability to deliver high-quality care to patients efficiently and cost-effectively. All of which help the organization make smarter and more informed decisions about how to move forward in the current climate.
Corazon is Key to Hospital Revenue Growth
Corazon believes engaging a healthcare consulting firm can help the hospital/ health system navigate this challenging environment and reach its goals by providing the guidance and advice needed to develop effective strategic and operational plans and processes and stay up to date with the latest trends in healthcare. In today’s world of fast-evolving shifts in care, market consolidation, and the need for optimization and revenue enhancement, engaging knowledgeable experts who can validate what is going on in the industry and where the market is heading is the smart choice.
Experienced and focused, Corazon is available for help with strategic planning, operations assessment, or decision-making for a service line or new revenue source.