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4 Ways to Improve Hospital Profit Margins

Aug 03, 2020
By Leslie O'Connell

A recent analysis done by Kaufman, Hall & Associates, LLC, and released by the AHA shows the dire impact of the COVID-19 crisis on the financial health of hospitals and health systems.

Before the pandemic, hospital operating margins averaged an already low 3.5%. According to the analysis, “In the second quarter of 2020, when we experienced COVID-19’s initial impact, we saw almost half of America’s hospitals with negative margins.”

Operating margins are keeping hospital executives up at night.

The pandemic will end, and once it does, hospitals will be evaluating their processes. It’s always been a juggling act to keep patient care levels high and costs low. Now, more than ever, it’s a necessity.

We all need and want hospitals to thrive; positive financial margins lead to innovation and better patient care.

If you’re part of a financial hospital evaluation team, creating a Connected Hospital can help.

The Connected Hospital is where support teams, like HTM, IT, Real Estate, Maintenance, Supply Chain, Pharmacy, Clinical Care, and more, work together on one platform to support the doctors, nurses, and all care team staff.

The Connected Hospital delivers better patient care while ensuring all hospital facilities and medical devices are safe, compliant, and operational.

When support teams are working together on one system, work gets done faster and more efficiently.  And, you capture the business intelligence to make significant cost savings decisions.  Here’s how:

Deliver Better Patient Care with The Connected Hospital

1. Superior Work Order Management

On a connected platform, hospital staff can quickly report a problem anywhere on the hospital campus through a self-service portal. Then, IT, Healthcare Technology Management (HTM), and Facilities Technicians use a mobile app to work quickly and efficiently throughout the hospital campus.

Work is done faster when technicians share a platform.

For instance, if a technician is dispatched to fix an MRI machine, they immediately know what server the MRI machine is communicating with, what HVAC machine is supporting the room temperature and can identify all assets in the MRI room. They can quickly collaborate with their colleagues to figure out the issue and how to resolve it.

It doesn’t matter if IT, HTM, or Facilities fixes the MRI issue, work orders are updated on the same mobile app, and the asset service history, you might otherwise be missing, is captured.

When assets, locations, and work are captured on one platform, you can create smart dispatching.  Smart dispatching uses workflows and business rules to automate and automatically route work orders to the right technician at the right time.

2. Smarter Preventive Work Order Management

Smart dispatching is also used to design well-structured preventive maintenance plans.

Preventive work orders can be designed to auto-route based on date, location, certifications, asset performance, etc. All the service history intelligence is used to understand equipment maintenance better and create more efficient timelines.

You can automate and plan clinical device maintenance or use specific workflows to create Alternative Equipment Maintenance (AEM) programs that ensure safety and compliance.

An organized and intelligent work platform improves hospital operations exponentially. Saving critical time, that’s automation at its best!

3. Accurate Medical Equipment Management 

A cohesive medical equipment service management program creates substantial cost savings for any healthcare organization. Combine that with superior work order management, and the results are impressive.

The Connected Hospital platform tracks each medical device, keeps them secure, manages existing inventory, resolves any technical issues that arise, and shares the platform with IT for comprehensive medical equipment management.

How? All the functionality needed for complete asset management, from sensor technology to inventory management, to cyber security and more, is part of the connected platform. And, all the medical device history is accurately captured at the time of service through robust work order management.

The inclusion of medical device cyber security on the platform is unique; typically, it’s an afterthought in equipment maintenance.  With the Connected Hospital, IT and HTM departments work together to keep medical devices protected from cyber attacks, threats, and vulnerabilities.

Logically, this level of medical device management greatly improves device performance and uptime.

4. Reporting & Financials 

Hospital support staff sharing the same platform, updating work, and asset information on the same database creates powerful analytics.

Use the data collected to:

  • Make accurate medical device purchasing recommendations to clinical departments and capital planning teams.
  • Manage and consolidate support contracts, accurately forecast new equipment purchases, and drive process efficiencies.
  • Create clinical teams cost forecasting and device life-cycle cost analytics.
  • Find trends of unknown equipment hitting the network or see what devices have the most security events.
  • Adhere to Joint Commission and other regulator reporting requirements.

Support teams working off the same platform gives you unprecedented data accuracy.  Building an operational improvement plan based on accurate business intelligence will increase your profit margins while delivering better patient care.

Learn more, register to watch our on-demand webinar, Enabling the Connected Hospital.