balancing performance with cost reduction
Health care organizations are struggling with changes in demand and are realizing that reducing costs by up to 40% while maintaining performance must be done sooner rather than later.
Changing payment models have been the norm for solving economic issues in health care organizations. HMO’s, accountable care organizations, and fee for service have driven providers and patients alike away from profitable services. so how do boards make decisions for the future?
The financial difficulties of changing payment plans is widespread and is forcing health care organizations to seek alternative means of growth. Traditional growth options are no longer feasible but taking a page from asset optimization business strategies, health care organizations can accomplish their goals .
What most health care organizations have is a reactive process to financial distress. They patch up problems as they arise but fail to operate a financially sustainable model. Often root cause analysis reveals issues at the institutional level. Financial distress is often a symptom of an overall strategy failure and boards have yet to adopt new policies to prevent reoccurrence.
Asset Optimization will be a core competency for successful boards. This systematic approach proactively plans for the practical use of assets as it relates to demand. Often Capacity is not an issue but the utilization of assets as it relates to changes in the market allowing for better planning and quantifying of the real value of assets.
This process includes identifying an organizations most critical assets and creating an actionable plan to ensure financial success.