8 Ways to Rescue Profits
Recent years have brought increasing pressures on hospital profit margins, and many healthcare organizations are scrambling to make up the difference. HFMA reports that healthcare organization leaders are downplaying expectations of major changes to the Affordable Care Act (ACA) in 2017, despite moves by Republicans to repeal and replace it. In the current climate of uncertainty, many healthcare professionals believe profit margins are especially vulnerable.
Here are a couple of ideas hospitals can use to decrease that pressure by reducing expenses:
- Cut waste. Look for habits which cost your organization money, such as rubber-stamp approval of phone bills.
- Identify missed tax exemptions. Not-for-profit organizations are often missing telecom tax exemptions to which they are entitled. These are easy to overlook without having a thorough review by a telecom tax expert.
- Scrutinize your invoices for billing errors, such as erroneous surcharges on your telecom carriers’ bills. In many cases, this requires special expertise. Often, hard-won contract terms do not show up in your billing.
- Track wireless device use. You should know who is using what device and what they are using it for. Pagers, cell phones, and tablets should be adequately accounted for so you can eliminate wasteful use.
- Disconnect unused services. Identifying unused services often takes a thorough audit. Because services are usually negotiated by someone other than the end-users, hospitals often have unused services that they continue to pay for.
- Control inventory. Many hospitals have about 25% of their pagers and cell phones sitting in a drawer unused. You can suspend service on these or get rid of them.
- Review and renegotiate contracts. Contracts with telecom carriers, wireless carriers, or other service providers often have room for savings. You just need to know what you’re paying on each contract and what rates other similar organizations have negotiated.
- Maintain visibility. It’s easy to assume someone either at corporate or individual locations is reviewing carrier bills for accuracy. The reality is, often bills go to centralized payment processing locations, and nobody is scrutinizing them.
No matter what happens this year, your hospital can better manage the downward pressure on profit margins by decreasing unnecessary expenses. Before you reduce staff or make expensive investments, you can start with an expert audit of your telecom expenses.