4 ways CEOs can save money while running a hospital
Hospital operating costs have been steadily increasing over the past decade. As a result, many hospitals in the U.S. have no choice but to pass expenses on to patients. The average cost of running a small city hospital is nearly $200,000 a day. This does not include wages for doctors and nurses.
That amount is on the low side of the cost spectrum. Some mid-sized hospitals in the country have operating costs in the $600,000 to $800,000 range. St. Jude Children's Research Hospital, one of the largest medical facilities in the country, reports operating costs of nearly $2 million a day.
If your hospital is experiencing a rise in operating costs, there are some cost-cutting approaches you can take. As the following article looks at, here are 4 routine expenditures you can cut back on while running your hospital:
1. Waste removal
Many hospitals in the country are saving money on waste removal by separating standard waste from red-bag pathologic waste, which is much more costly to dispose of. John Hopkins Hospital in Baltimore is doing just that and saving 30 percent on medical waste expenses in the process.
2. Ship smarter
Shipping supplies to and from a hospital can cost hundreds of thousands of dollars a year. However, by simply reworking inbound and outbound shipping strategies, your hospital can recoup some of those expenses. South Communities Hospital in New York is saving close to $100,000 a year on shipping by creating a more efficient shipping strategy.
3. Change vendors
There are plenty of vendors a hospital can choose from when it comes to supplies. Sacred Heart Hospital changed its medical journal supplier to an online journal and is now saving $50,000 a year on subscriptions.
4. Energy costs
Making the switch from incandescent bulbs, fluorescent lights, and high-energy ballasts to energy-efficient, low-amp lighting can also help your hospital save money. Resurrection Health Care, which runs a number of facilities around the Chicago area, switched to energy-efficient, motion sensing lights and is now saving $900,000 year on utilities costs across all of its facilities.
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Due to the rising costs of running a hospital, many medical facilities are finding ways to save money. A large part of any hospital's operating costs stem from supplies and other expenses related to running the facility, such as utilities and waste removal.
If your hospital concentrates on these money saving areas like the medical facilities above, then you'll see results. In addition, finding creative ways to cut costs around the facility as opposed to increasing the cost of treatment will take the burden off your patients. This is a great way to promote good health.
When it comes to the financial health of your hospital, the pointers above are just what the doctor ordered.
[This article was originally published by our sister brand, Healthcare Global, and can be found here.]
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Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.