Quick Tips to Cut Down Your Hospital's Overhead
Written by John McMalcolm
How Can You Cut Down on Your Hospital's Overhead?
The cost of healthcare in the United States is the highest in the world, and it is rising at a faster rate than the average income of Americans.
A significant percentage of Americans are forced to delay or forgo needed medical treatments or examinations because they have problems paying their medical bills.
As a result, some hospitals are losing customers and struggling to stay afloat. It is difficult for hospitals to remain profitable if they are not drawing enough customers because of their high overhead costs and low profit margins. One thing that hospitals can do to stay competitive is to reduce their overhead costs.
Re-assess Staffing Needs
The wages of your employees make up a large portion of your hospital's total overhead cost. If you spend some time reassessing your staffing needs, you may find that there are ways to reduce your staff costs without compromising efficiency and quality.
Identify employees who are not really essential to the operation of your hospital, as well as those who are overqualified and therefore overpaid.
Depending on circumstances, you can choose to release them, demote them, reduce their wages or move them into part-time positions.
These decisions are difficult to make and can have a negative impact on the morale of your staff, but they are nonetheless necessary if they can help your hospital remain profitable.
Get the Best Deals on Supplies
It is essential that you re-negotiate your contracts with your suppliers from time to time to ensure that you are getting the most competitive prices for your supplies.
If you find that your current suppliers are not giving you the best deals, you can do comparison shopping by getting quotes from other suppliers.
Consider the option of buying your supplies over the Internet because online suppliers are known to offer lower prices. Additionally, you can save substantially by getting lower shipping rates.
Renegotiate Lease Agreements and Refinance Debt
Another way to reduce your hospital's overhead costs is to restructure equipment leases.
If there are pieces of equipment that are not being used frequently, you should consider leasing them on a per-procedure basis instead of paying a monthly rate.
One disadvantage of leasing equipment on a per-procedure basis is that it can cause some scheduling problems for your physicians. Now that interest rates are low, it may also be a good idea to refinance your loans.
Monitor Miscellaneous Expenses
Miscellaneous expenses can add up to a sizable amount if they are not properly controlled.
Some of the things you can do to reduce your miscellaneous expenses include finding the best rates for professional services such as accounting and legal services, monitoring long-distance telephone calls and determining the most cost-effective billing option.
Also, make a point to check all your hospital's bank statements to ensure that all the charges listed are correct.
Minimizing overhead requires constant effort and commitment, but it is a worthwhile endeavor that can significantly improve your hospital's competitiveness and profitability.
About the Author
How healthcare can safeguard itself against cyberthreats
One of the most fundamental lessons from the COVID crisis is that health should always be a priority. In a similar fashion to the human body that frequently fights off viruses and foreign invaders that intend to cause it harm, the sector itself is now a prime target for another type of external threat: cyberattacks.
The figures speak for themselves: between December and January this year, hospitals in the UK were at 89% capacity, with 7,000 fewer available beds than there usually are. As the pandemic increased pressure on hospitals, clinics, and research facilities to create a treatment for patients globally, it has left the sector exposed to hackers who, like a virus, have been targeting it relentlessly and evolving their tactics.
From patient records being held ransom, to fake emails claiming to originate from the UN WHO, the NHS, or vaccine centres, through to attacks on the cold supply chain to find out the secret formula of the COVID vaccine, the healthcare industry is facing constant cyberattacks and struggling to cope. This threat is unlikely to go away anytime soon – and as such, the industry needs to take a proactive, preventative stance to stay safe in a dynamic digital world.
The responsive nature of healthcare – particularly of hospitals – means that efficiency is crucial to the industry’s standard operations. To support this, the sector has been embracing technological advancements that can improve the quality of work, enabling staff to meet pressing deadlines, and enhancing patient care. For example, the industry has been digitising records and improving its ways of working through digital means over the past few years.
This shift is critical to offer high quality patient care; yet, it also means the sector has become more dependent on IT, which can come with a risk if cybersecurity processes employed are deemed as inadequate.
Without the correct security measures in place, the desired efficiency gains realised, can be easily lost in a heartbeat. Simply put, an elementary glitch in the system can have a tremendous ripple effect on many areas, from accessing patient records and conducting scans, to maintaining physical security and protecting the intellectual property of experimental treatment development.
To prevent this, healthcare organisations need to ensure they’re considering cybersecurity as part of their overall digital transformation strategy – and setting the right foundations to create a culture where safety goes hand in hand with patient care.
Before implementing cybersecurity process, healthcare organisations need to assess the potential risks they face. Depending on how much confidential data the trust has, where it is stored, who has access to it and via which means, the cybersecurity strategy and associated solutions will change.
It’s fair to say that a medical device start-up where all employees have a corporate-sanctioned laptop and access data via a VPN will have radically different needs to a large hospital with hundreds of frontline workers connecting to the hospital’s Wi-Fi using their personal device.
These requirements will pale by comparison to a global pharmaceutical giant with offices in multiple locations, a large R&D department researching new treatments for complex diseases and a fully integrated supply chain. Considering the existing setup and what the organisations is looking to achieve with its digital transformation strategy will therefore have an immediate impact on the cybersecurity strategy.
Despite this, there are fundamentals that any organisation should implement:
Review and test your back-up policy to ensure it is thorough and sufficient – By checking that the organisation’s back-up is running smoothly, IT teams can limit any risks of disruption in the midst of an incident and of losing data permanently.
In our recent State of Email Security report, we found that six out of ten organisations have been victims of ransomware in 2020. As a result, afflicted organisations have lost an average of six days to downtime. One third of organisations even admitted that they failed to get their data back, despite paying the ransom. In the healthcare industry, this could mean losing valuable patient records or data related to new treatments – two areas the sector cannot afford to be cavalier about.
Conduct due diligence across the organisation’s supply chain – Healthcare organisations should review their ways of working with partners, providers and regulatory institutions they work with in order to prevent any weak link in their cybersecurity chain. Without this due diligence, organisations leave themselves exposed to the risks of third party-led incidents.
Roll out mandatory cybersecurity awareness training - Healthcare organisations shouldn’t neglect the training and awareness of their entire staff – including frontline workers who may not access the corporate network on a regular basis. According to our State of Email Security report, only one fifth of organisations carry out ongoing cyber awareness training.
This suggests it is not widely considered as a fundamental part of most organisations cyber-resilience strategy, despite the fact many employees rely on their organisation’s corporate network to work. By providing systematic training, healthcare organisations can help workers at all levels better understand the current cyberthreats they face, how they could impact their organisation, the role they play in defending the networks, and develop consistent, good cybersecurity hygiene habits to limit the risks of incidents.
Consider a degree of separation – Information and Operational Technology (IT and OT) networks should be separated.
Although mutually supported and reliance on each other, employees shouldn’t be accessing one via the other. This should be complemented by a considered tried and tested contingency and resiliency plan that allows crucial services to function unabated should there be a compromise. Similarly, admin terminals should not have internet access to afford a degree of hardening and protection for these critical accounts.
As the sector becomes a common target for fraudulent and malicious activity, putting cybersecurity at the core of the organisation’s operations is critical. It will help limit the risks of disruption due to cyberattacks, reduce time spent by the cybersecurity team to resolve easily avoidable errors, and ensure that institutions can deliver patient care, safe in the knowledge that their networks are safe.
Fighting future threats
With technology continuing to change the face of healthcare, the surface area and vectors available for attacks by malicious actors is constantly increasing. With the introduction of apps, networked monitoring devices, and a need for communication, the attack vector is ever expanding, a trend that needs to be monitored and secured against.
To prevent any damage to patients, staff, or the organisation they are responsible for, healthcare leaders must put security front and centre of their digital transformation strategy. Only then can the sector harness the full benefits of technology. Doing this should include implementing cybersecurity awareness training to challenge misconceptions around security, encourage conversation, and to ensure employee knowledge of the security basics and threats faced.
This ultimately allows healthcare organisations to do what they do best: provide the highest standard of patient care, safe in the knowledge that their operations, patients, and data are safe.