The uncertainty of healthcare reform has forced providers and suppliers to place some bets in an effort to beat the odds for change, while responding to the real financial pressures happening right now. Many are making significant decisions based on what could happen tomorrow but they don’t really know what the future holds. Consolidation is a perfect example – it’s happening among provider organizations at a tremendous rate. But while some healthcare organizations are consolidating to achieve strategic business goals, others are simply reacting to anticipated change within the industry.
Regardless of which bet has been placed – from consolidation in anticipation of market contraction to expansion in anticipation of new revenue streams – there are a number of good business practices that can be put into place ahead of healthcare reform to increase the likelihood of future success.
Data drives all good business practices. "Big Data" is a common buzzword these days. While the volume of data generated in the delivery of healthcare doesn’t always get as much press as data volume in what many would consider to be core “Big Data” industries/activities (such as climate modeling, social media, genomic analytics, etc.), it is equally impactful to a hospital’s operations. The challenge is for hospitals to make that data actionable and meaningful so that they can be responsive to current pressures and the changes that lie ahead.
One area where the power of data can be harnessed to yield significant results is in supply spend. For many hospitals, the cost of supplies is already exceeding the cost of labor and analysts predict supply costs will continue to grow. As hospitals face uncertainly on how and how much they will be reimbursed for care in the years ahead, it’s critical that they find ways to control and reduce their operational expenses – and supplies are a heavy hitter. Having accurate and accessible purchasing data – something that hospitals can consume and use right away - can drive better business decisions in the procure to pay and revenue cycles, including areas such as product contracting, sourcing, order and inventory management, and financial management.
In a time of great uncertainty, there are myriad tactical steps that providers can take to help them make the best decisions for their organizations. I’ll delve deeper into these tactics in future editions of The Healthcare Hub.