Joe Wasserman: Eight thoughts about cost reduction

In recent months, our industry has experienced unforeseen financial pressures as a result of the economic downturn impacting our patient volumes, operating income and investment income.

The proper response is to lower our operating expenses. This is not likely a transitory situation, and ultimately we need to learn how to operate profitably under our Medicare reimbursement.

The lack of a well planned and executed expense reduction plan may well result in catastrophic financial and operational difficulties.

What to do? Consider these perspectives:

1) Transparency: Share your financial data routinely with your management, staff, physicians and the community, and not just your board. Include state and national comparative data. Most of your constituents are likely not aware of industry trends.

2) Lead by Example: Executive management should reduce their expenses first before asking others to do so, and need to publicize your reductions.

3) Phased and Flexible Approach: Since we do not know, and can not anticipate, what the future may hold, a multi-phased approach communicated in advance will prove to be much more effective. It also will allow the organization to know what may occur next as they understand the ongoing financial performance.


Suggested Articles

CVS Health is joining forces with UPS to test several different applications for drone delivery, including sending products directly to patients.

Cleveland Clinic and telehealth company American Well are launching a Cleveland-based joint venture telehealth company.

Humana and Microsoft announced a seven-year strategic partnership to build predictive solutions and intelligent automation to support Humana members.