It’s no secret that the healthcare industry is under increasingly intense financial pressure. With operating experiences growing at above-inflation rates, many healthcare businesses are finding that they’re struggling to maintain standards, right at a time when patient expectations are higher than ever.

Meeting these challenges is made even more difficult by a reluctance to cut costs, with many businesses seeing it as a risky move that could compromise standards and impact staff morale.

Cutting costs can produce those outcomes, but only if they’re not managed correctly. With more healthcare businesses than ever trying to reduce expenses, many effective strategies have emerged that can help businesses get a firmer grip on their finances while ensuring that patient outcomes remain the same — or even improve. 

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Adopt a Flexible Approach to Staffing 

Staffing is generally thought to be the number one expense for healthcare businesses, typically accounting for some 50 – 70% of total operating expenses.

Anything that helps to bring those costs down by even a few percentage points can have a significant impact. The problem, historically, is that cutting staffing expenses risked harming staff morale. 

But new approaches are developing that are demonstrating that it’s possible to keep staffing costs down without impacting morale. Traditional staffing models assume consistent demand, but patient needs fluctuate. Using smart staffing scheduling software, such as Workforce Management Software, can help to reduce unnecessary scheduling and overtime, without compromising patient care. 

Buy Used, Not New 

Healthcare businesses often need advanced equipment to deliver the highest level of care, but how they obtain that equipment can vary. All too often, healthcare businesses assume that their only option is to buy new, but it can often be a lot more practical to buy used, which can significantly reduce expenses, without compromising quality. There are refurbished ambulances for sale, as well as ultrasound machines and CT scanners, that perform just as well as new models at a fraction of the cost. Indeed, they can perform so well that buying refurbished healthcare equipment can be recommended even if the healthcare business isn’t overly concerned about cutting costs, since the money saved can go towards improving areas that directly impact the patient experience. 

Invest in Telemedicine

Telemedicine has seen rapid growth in recent years, with patients increasingly open to these kinds of appointments. Still, despite proving popular, some healthcare businesses still haven’t quite got their systems up to speed. Many still see it as a poor equivalent of in-person appointments.

The truth is that telemedicine, when done correctly, really can make a big difference to the healthcare business’s bottom line without incurring unmanageable additional expenses. It’s only the initial setup that can be costly; from there, businesses can benefit from reduced no-shows (people are less likely to cancel an appointment they can attend from their own home) and allow for healthcare facilities to attract many more patients, especially those in underserved areas, such as rural areas. 

Negotiate With Suppliers 

Many healthcare businesses operate under the belief that their supply-related expenses are fixed, but that’s rarely the case. They’re often up for negotiation. If you’re a large, repeat customer, then it’s worthwhile investigating opportunities to reduce your supplier-related expenses. Historically, the problem has been that many healthcare businesses — especially smaller ones — do not have procurement experts in-house. Joining a GPO, or outsourcing procurement to a third-party company, can help businesses get the best deal. 

In addition to failing to negotiate, many businesses stay with the same suppliers out of convenience, not realizing that they could be getting a much better deal if they switched to a new supplier. When it comes to renewals, don’t automatically agree to a new deal without first checking that there is not a better deal to be had. 

Invest in Equipment Maintenance

Investing in equipment maintenance is one of the best ways for healthcare businesses to reduce their expenses, yet it’s often overlooked for a simple reason: healthcare businesses view it as an expense, rather than an investment that saves money in the long run.

It’s much cheaper to invest in maintenance than it is to pay for an emergency repair or replacement. By being proactive about equipment maintenance, businesses can significantly delay purchasing those expensive replacements.  

Outsource Non-Core Services

Healthcare businesses, like all businesses, tend to have a lot of requirements that they typically perform in-house, but which could be done for cheaper — and better — if they outsourced to a third-party company. It’s a lot cheaper to outsource IT needs to an IT company, or hire an external cleaning agency than it is to hire an in-house team. 

Not only can this help to keep costs down, but it can also have a significant impact on the overall running of the business. Without having to continually wrestle with these jobs in-house, the healthcare business can simply spend the time and energy on doing the tasks that really drive things forward, secure in the knowledge that the key tasks have been taken care of. 

Hire Experts to Identify Inefficiencies 

Hiring experts can seem like a large, unnecessary expense, but there are instances when it can be an investment that offers long-term payback. This is the case with hiring a consultant to identify inefficiencies and opportunities to save, which can have both immediate and long-lasting benefits. 

This is recommended because there is typically only so much that healthcare businesses can do in-house, since their main priority is — and should be — delivering high-quality care to their patients. Hire a consultant, and you might just be surprised by how many inefficiencies they can identify. 

Prioritize High-Margin Services

Healthcare businesses tend to offer a lot of services, but not all of them will be equally valuable. Some will offer much higher margins; others won’t. In many instances, hospitals treat all of their services as the same, when it could make a lot more sense to focus their energy on the ones that really drive revenue. This doesn’t mean that the lower-margin services should be cut, but it’s more about knowing which parts of the business deserve your focus and attention.Â