Dec 13 2022

How Healthcare Organizations Can Streamline Workflows as a Cost-Saving Initiative

A daunting financial landscape doesn’t mean innovation and partnerships take a backseat.

Healthcare organizations are expected to enter strong financial headwinds in the first quarter of 2023, with high inflation, labor shortages and continuing sickness from COVID-19 and other viruses.

Hospitals continue to report negative operating margins for the end of the year. Some health systems are eyeing real estate changes to find cost savings or drive more value. Organizations can also consider process changes to streamline workflows and cut costs. Automation, stronger cybersecurity, managed services, and contract and supplier consolidation are all areas where healthcare organizations can focus their efforts for the new year.

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Driving Efficiency with Automation and Artificial Intelligence

Process automation is technology that can be implemented today that can impact the bottom line for labor costs and increase efficiency. Such automation can also be used to improve processes across an organization — a tougher task, but one that can open the door to cost savings. An example of this would be invoice three-way matching, a process that involves procuring, receiving and paying for goods. It’s very labor intensive but helps to control costs, reduce fraud and improve cash flow. Automation through systems integration can make invoice three-way matching seamless and decrease the time spent performing these tasks.

Many enterprise resource planning solutions, such as those from Oracle and others, have process automation built into their platforms and can support healthcare organizations as they migrate to the cloud. Altogether, ERP tools can help streamline administrative processes in HR, finance and supply chain management that are contributing to skyrocketing labor costs.

Automation can also improve clinical processes. For example, Monument Health in South Dakota turned to Artisight, a solution that combines video and artificial intelligence to automate hospital workflows. It first used the tool to track handwashing and has plans to use it to help with patient monitoring.

Improvements in AI also help providers offer better diagnoses. Physicians or specialists who can provide quicker interventions will ultimately help drive healthcare costs down.

Upfront Investments in Cybersecurity Lead to Long-Term Savings

For healthcare organizations that are still working on their cybersecurity strategies, there may be initial upfront costs, but the long-term payoff of avoiding a cyberattack will make the investment worth it.

Cybersecurity threats in the healthcare space have increased at an alarming rate over the past several years. If you consider the costs of recovering data, the labor involved in rebuilding and the potential of lost revenue from system downtime and reputational harm, it’s no surprise that recovering from cyberattacks can turn a healthcare organization’s financial status upside down.

Rather than building a security team in house and scrambling for skilled professionals who are already in short supply, a more cost-effective and achievable solution might be to partner with a company that has the expertise and depth of experience in healthcare cybersecurity.

EXPLORE: How mature security analytics can be a weapon against cyberthreats.

Other Opportunities for Managed Services in Healthcare

Cybersecurity is not the only area where managed services can help drive cost savings. Healthcare leaders can outsource specialties such as IT, HR, food service, labs and pharmacies as part of their cost-reduction strategy to reduce overhead and free up hospital dollars for re-investment in technology, clinicians and other critical functions.

However, it’s important to manage these services correctly. Having too many vendors and protocols can lead to increased expense and be counterproductive. Also, variability in services provided can impact quality and, potentially, patient care. Conversely, consolidating services through a single partner can lead to lower overall costs and increased quality. A single partner also makes it easier administratively, which can also reduce costs.

Having too many vendors and protocols can lead to increased expense and be counterproductive.”

Prioritize Contract and Supplier Consolidation in Healthcare

Having too many supplies can be counterproductive to cost-saving initiatives. Focusing just on product price may save a few dollars in the short term, but the labor involved in managing multiple suppliers for the same product category can be extensive. The solution would be to find a partner that can provide the product needed, on time, at a good price and can provide this at a service level that can help lower the organization’s labor hours. In addition, when talking about supplies and drugs, establishing strong relation-based contracts, whether through a group purchasing organization or locally negotiated, can be a key to reducing costs.

Healthcare organizations must take inventory of all the groups or services that they rely on, across all department. Leaders may find redundancies that can be trimmed down and consolidated. It's important that an organization has a central hub for services and a central way to manage expectations, whether it’s contract management or supply chain management. It may be challenging to get disparate departments on the same page, but organizations should avoid situations where they’re using three different companies to accomplish the same tasks.

READ MORE: Find out how health systems can stay on top of supply chain management.

Don’t Be Overwhelmed in the New Year

Cost-saving targets are not new, and they can come up annually regardless of economic conditions. But thinking of such targets as “how do we spend less money?” is much less effective than “how can we improve organizational processes?” 

Let’s look at budget scrutiny as opportunities for organizational improvements. What happens when departments are communicating more with each other and sharing resources? What happens when we focus on improvement of certain workflows rather than cutting costs?

Healthcare organizations can’t face the daunting financial landscape alone. Industrywide changes to longstanding payment structures need to happen as technology improves and patient expectations continue to change.

This article is part of HealthTech’s MonITor blog series. Please join the discussion on Twitter by using #WellnessIT.

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