Cost Containment Strategies Assignment -
You have been placed on a committee in your health care organization. The committee has to create a set of cost containment strategies that will positively impact (decrease) operating expenses. The committee is also challenged with increasing reimbursement.
Provide 5 cost-cutting strategies that the committee could recommend to the executive board. Describe how these cuts will benefit patient care or business systems. Provide 5 ideas on how to increase revenue or reimbursement. This answer can include short-term and long-term goals. Describe how these revenue or reimbursement systems benefit patient care or the business systems. Provide at least 2 references that reinforce the strategies you have chosen.
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Answer - COST CONTAINMENT STRATEGIES
The health system in today's world is facing many challenges that includes inefficiencies, escalation in costs and variations in the quality of the health care. The access of the health care system challenges is difficult and so is the analysis of the result of the same. There arises a need to have transformation in the same so that there can be delivery of better care at lower costs without any disparities among the health care organizations within one and another community. The costs of the health care is growing faster as compared to the growth in the overall economy. Spending in health is among the largest share as reflected in the budget which is in fact more than the budget of the defence. All this issues should be highlighted and addressed soon and so in this paper there are five major cost cutting strategies being outlined along with their effects and five ideas have been discussed in relation of how to increase revenue.
The health care expenses are continuously in today's world and therefore there arises a need wherein cost cutting strategies should be identified and assessed. There have been identification of a large number of policies that focuses on cost containment and these targets on all the aspect of health system, such as prices, volumes, supply, demand and market process. The following are the five cost-cutting strategies that should be adopted so as to have positive impact on the expenses of the organization by reducing them:
1. Embracing Technology: The current process of administration needs to be identified along with areas where automation can be done using technology instead of using man power. All this results in reduction of cost and increase in efficiency. Automation of tasks that are repetitive in nature, helps in saving manual hours every day. That save in time can be utilised to opt for solution via analysis of treatment of different kinds of illness that exists among patients. The enhancement and coordination of technology assessments helps in controlling costs from those areas where they are inappropriately used.
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2. Comparative Effectiveness of Research: There should be efforts made so as to improve access to information by way of comparison to clinical management strategies. One thing that is immensely important is that cost should never be considered and used as the only criteria for evaluation.
3. Encouragement of Cost-Consciousness and Involvement of Patient: The benefits in the health care organization should be designed in such a manner that it increases the patient cos*t-consciousness and responsibility without altering the services being provided to the patient.
4. Health Planning: There is a need of planning health so that there is appropriate allocation of the resources so as to meet the demand. The planning for the same should be in such a way that there is promotion of engagement from public in developing the plans and later in the adherence of the same.
5. Accurate Pricing of Services: The health care organization should have their pricing method planned well in advance so that there is no unnecessary costs included in the pricing of the service and neither any costs is being ignored. This will help the organization in decreasing their operational expenses.
The basic fact that comes out after the above analysis is that the health care organizations should identify expenses that are unnecessary and this should be done basis the long run strategy. The internal transformation is must for the survival of the organizations which focuses on the competitiveness capabilities along with costs associated with the organization.
IDEAS TO INCREASE REVENUE OR REIMBURSEMENT OF HEALTH CARE ORGANIZATION:
The health care organization should understand the fact that they can increase their revenue and reimbursement by bringing improvisation in their business functioning. The fact that the health sector, unlike other sectors and industries, consumers of it relies on the providers to do whatever is possible to improve their health. The following methods should be adopted so as to increase the revenue:
1. Optimization of revenue from physician referrals and orders: In the health sector, the hospitals have competition for patients. The patient on the other hand act as per the instruction given to them by their physician. So, the health care organisation should approach more physician and offer them various offers of referrals of patient.
2. Reduction in the revenue leakage: The health care organisation are hiring physicians for practices. The physician later expects to get many advantage and cost benefits over and above its fees and salary from the organization. The health organization shall therefore focus on policies where there is no revenue leakage which means there is payment for the service once and no repeated payments can be released.
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3. Reduction in denials: The health care organization shall not deny to any patient. There are required to analyse the situation where even in less possibilities of recovery, the patient should not be denied, rather they should take all the steps for their survival and wellbeing.
4. Reduction in readmissions and unnecessary testing: Increasing revenue does not means that the health care organization charges the patient unreasonably as it loses confidence of the patient on it. Readmission and unnecessary testing should be avoided.
5. Understanding Revenue Cycle Performance: There is a need of understanding the revenue cycles by the hospitals, so that there is determination of effective allocation of resources and funds. The bottlenecks should also be avoided and the functioning of the organization should be planned accordingly.
We can see that there are number of reforms being undertaken by the health care organizations so as to change their functioning and for obtaining more profitability.
The fact that can be established from the above analysis is that the health care organization are required to frame policies in such a way that there is cost cutting done along with increase in revenue and reimbursement. All this benefits the patient and the business systems in many ways. Patient satisfaction can be increased if the health care organization have policies of avoiding unnecessary expenses.
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