Despite the efforts of healthcare groups to tighten their belts, reining in operating costs is still a tough nut to crack. Members of the Medical Group Management Association (MGMA) say that dealing with rising operating costs is the third most intense challenge they face.
Of course, attacking operating costs has been the order of the day in all industries. Staffing costs have been cut by reducing staff, overtime, and benefits. Overhead (leases, utilities, etc.) has been pared. Waste of supplies has been targeted. The use of outside services has been analyzed and trimmed. The list goes on.
Where else to look? After going after the obvious wasteful spending, healthcare groups need to look for potential cost savings elsewhere—or take a fresh look at where they've already cut. Take staffing, for example. What about the issue of turnover? Recruiting and training new staff is expensive. Can staff policies be changed to reduce turnover?
In terms of new ground, think about re-examining backoffice operations. True, these areas have been targeted for the obvious savings, but what about hidden savings in the processes themselves? Take accounts payable, for example. It can cost up to $25 to process and pay a paper invoice, according to the IAPP (International Accounts Payable Professionals). An electronic invoicing and payment system can slash that amount to a few dollars. Multiply that savings times the number of invoices you process and just imagine the impact on the bottom line.
Tell us: What have you done to uncover hidden savings in your operation? Give us your ideas and success stories to share with other readers.