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.
RELATED TOPIC: Is your venture capital on the digital health bandwagon?
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.]
Click here to read the latest edition of Business Review USA!
- KPMG: The biggest challenges facing global CEOs in 2023Leadership & Strategy
- What will the C-suite of tomorrow look like?Leadership & Strategy
- All change as Kinaxis announces trio of C-suite appointmentsLeadership & Strategy
- 10 of the best speakers at Procurement & Supply Chain LIVELeadership & Strategy