I believe that the prime objective of a hospital, whether public or private, should be to provide quality healthcare at an affordable cost. But healthcare providers should also be able to make profits. So, is it possible to achieve this twin objective? The answer is yes if we could optimally utilise the resources and ensure that all the departments in the hospital work efficiently.
Reducing the cost of healthcare, without compromising the quality of patient care, needs scientific and innovative interventions. Thankfully, now there are healthcare cost specialists who can do an in-depth cost study across all functional areas of a hospital, identify the over-resourced or less efficiently managed activities, and analyse these with financial and operational performance, and come up with cost-reduction strategies.
There are, in fact, several scientific methods that can help healthcare facilities bring down the overall cost of healthcare for patients, while improving their profit margins.
In simple terms, it is about accurately measuring costs and compare them with outcomes.
I believe that it is time for a major transformation in the healthcare industry. COVID-19 has affected hospital operations, and supply chain management adversely, which has led to an increase in the cost of care. Hospitals need to overhaul their supply chains, clinical services, diagnostics services and operations management.
The hospital management need to create cost-reduction goals and then come up with strategies to transform the systems and processes, and identify possible sources of savings based on the organizations.
According to an article in Harvard Business Review by professors Michael E. Porter and Robert S. Kaplan, who have extensively worked on cost crisis in healthcare, the proper goal for any health care delivery system is to improve the value delivered to patients. Value in health care is measured in terms of the patient outcomes achieved per dollar expended. It is not the number of different services provided or the volume of services delivered that matters but the value. More care and more expensive care is not necessarily better care.
To properly manage value, they write, both outcomes and cost must be measured at the patient level. Measured outcomes and the cost must encompass the entire cycle of care for the patient’s particular medical condition, which often involves a team with multiple specialities performing multiple interventions from diagnosis to treatment to ongoing management.
There are many healthcare facilities across the world, including hospitals, which are going for scientific and innovative interventions to make healthcare affordable for their patients, especially those who need long-term care for chronic diseases such as cancer, diabetes, high blood pressure, COPD.
And they have managed to do so while improving their bottom lines.
I feel the industry is in a crucial transition phase. Healthcare providers who are able to control their costs during the current crisis will emerge as industry leaders.