Hospitals tightening up on labor, service costs

Under intense pressure to lower costs, hospitals are being forced to trim labor and service expenses as a means of survival. While layoffs get most of the press, hospitals aren't just pink-slipping employees, according to one consultant.

For one thing, hospitals are instituting hiring freezes. They're also conducting labor productivity analyses to make sure that, say, their nurse staffing stacks up well against what their peers are spending.

Hospitals are also looking at management salaries, particularly managers that don't have direct contact with patients, according to Paul Osborne, managing director of Huron Consulting Group.

In cases where health systems have acquired new facilities, many administrators are changing the way they operate new properties, Osborne says. If the new property's operating costs are growing more than the system's patient volume, they're likely to cut jobs there, he suggests.

Hospitals are also taking a look at outsourced services, such as food and environmental management, to see if bringing them in-house will lower costs. Meanwhile, administrators are taking hard looks at clinical service lines and axing those that don't show a profit.

To learn more about these strategies:
- read this Healthcare Finance News piece

Suggested Articles

The ideal began to get real on Tuesday, as seven of the top contenders for the Democratic nomination sparred over the price tag on healthcare reform.

Aetna is partnering with Emory Healthcare and Northside Hospital System to bring its Whole Health program to the Atlanta market. 

When KLAS Research asked more than 300 healthcare leaders to identify the most disruptive company in healthcare, one tech giant was top of mind.