The Advisory Board’s Annual Health Care CEO Survey found that cost control is now healthcare system CEOs’ number one priority. The nationwide survey took place between December 2017 and March 2018, with 146 C-suite executives from hospitals and health systems providing their responses. Beating out revenue growth, 62% of surveyed CEOs identify “preparing the enterprise for sustainable cost control” as their utmost priority—the most of any of the 33 concerns outlined.
“Health system CEOs recognize that any effective growth or financial-sustainability strategy must be built on a competitive cost structure in order for their enterprises to deliver high-quality, cost-effective care to the patients they serve,” stated Christopher Kerns, director of research at Advisory Board, in a release. “The entrance of nontraditional healthcare providers … adds to the urgency of health systems improving cost structures.”
The term “investment” may seem counterintuitive when discussing cost control. Rather than a large capital investment, investing in the people and processes serving in operational roles can provide continued success for your healthcare facility.
Here are three ways your facility can “invest” in cost control:
Data measurement
Data allows your facility to set goals for employees and the overall organization. If you know where you want to go—i.e., control costs—take stock of where you stand right now. Set overarching goals for your team to work toward and analyze the current state of your facility’s departments. This will allow you and your team to align with the organization’s goals, establish milestones and report progress.
Pairing activity reports and recommendations with data not only makes your information more precise and error-resistant, but also helps to remove emotion and biases from discussions. Managers want to invest in their employees for their insights, but that runs the risk of leaving blind spots where resources or problems slip through when emotion and biases play a major role. Data also provides concrete evidence, so you can avoid costly mistakes while making better decisions and more accurate predictions on how to move forth with the company.
Employee engagement
Making sure your employees are engaged and thriving does not necessarily mean adding chips and salsa to the kitchen or a foosball table in the lobby. At many healthcare facilities, associate engagement is a means of enhancing revenue. An associate who feels valued will always do more than required and will remain passionate and committed to the organization each day.
According to Gallup, engaged employees deliver 21% higher productivity, 22% greater profits, 25% lower turnover, 48% fewer safety incidents and 37% lower absenteeism. Conversely, lost productivity stemming from employee disengagement costs U.S. companies $450 billion to $550 billion annually.
Do you know how your employees want to grow? If not, ask them. This will help guide an engaging conversation among leaders and associates. An engaged employee will advance with the future of the company, learn from its failures and share in its successes.
Appropriate staffing
Many healthcare facilities excel in caring for clinical staff with robust training, support and bonuses. The same isn’t true for support or skilled trade staff, however. For example, it’s not unusual to promote a facilities technician to a leadership position because of their seniority rather than having the appropriate training, mentoring or leadership ability. Unfortunately, this promotion route leads to higher turnover, a loss of organizational knowledge and an increased reliance on external service contracts that will cost organizations far more than they want to spend.
The short-term savings from eliminating full-time employees come at a high, long-term cost. With fewer staff to complete the work, facilities seek help and outsource services. Now they are tied with service contracts that cost much more than it would have cost to hire, train and develop an already active employee.
By investing in employees in-house, you will find they are easily accessible, and they know your processes, priorities and systems. They’re familiar with the needs and quirks of internal customers, understand the values and vision, and their loyalty lies with your organization.
Final thoughts
Healthcare CEOs want to control costs in their organizations, but at what cost? While the word “investment” may seem like a step in the wrong direction, by following these actionable, little-to-no-added-upfront-cost items, organizations can set their workforce up for continued success, higher rates of overall employee engagement and decreased costs in the future.
Matt Keahey serves as national vice president of operations for Medxcel.