Growing The Hospital’s Top And Bottom Lines
This graphic lays out six major kinds of opportunities and 35 related strategic/financial
initiatives from which a hospital can assemble a cohesive strategy that simultaneously
improves financial performance and market positioning. In fact, one of our clients recently
targeted and achieved more than $10 million of financial improvements by adapting several
of these initiatives to his hospital and marketplace.
REYNOLDS & COMPANY
Customizing Strategic and Financial Solutions
GROWING THE TOP AND BOTTOM LINES
Improvements In Financial Performance And Market Positioning Depend On
Which Strategic Initiatives From Among Six Kinds Of Opportunities Are Pursued
MAXIMIZE AVAILABLE PROTECT GROW INCREASE UNIT NET REDUCE CREATE NEW
REVENUE CAPACITY CURRENT VOLUME ADDITIONAL VOLUME REVENUES UNIT COSTS BUSINESSES
1. Use care management 1. Maintain the scale of 1. Add primary care 1. Increase selected 1. Reduce unit cost per 1. Launch new products
methods to further your primary care physicians to your charges that maximize case by standardizing or services that
reduce length of stay active medical staff in net revenue and decreasing resource complement or round
physician network as
to free up bed days and undersupplied or poorly consumption within out current offerings:
cut cost per case physicians retire
served locations that will 2. Assure that all services quality benchmarks Clinical
2. Assure that your high draw new patients rendered are posted to
2. Increase throughput in patient accounts and 2. Increase labor Diagnostic
margin product lines,
ED, OR and 2. Increase specialty billed productivity by Therapeutic
diagnostic/therapeutic such as open heart
referrals to your active benchmarking customer
services to reduce surgery, are physicians 3. Maximize Medicare service standards Post-acute
length of stay, increase differentiated as other reimbursement and
available capacity and providers target these 3. Negotiate MCO or direct minimize associated 3. Consider limited gain 2. Pursue joint venture
reduce unit cost niches contracts that gain LOS and resource sharing arrangements partnerships with your
access to MCO- consumption that link physician specialty physicians that
3. Identify ways to 3. Protect the perimeter of covered lives not now bonuses to verifiable target profitable
minimize unreimbursed your marketplace from available 4. Reconsider charity and cost savings which can franchises for
readmissions within competitive incursions bad debt policies to be assessed in relation subspecialty services
31 days that may also by primary care 4. Partner with physicians improve margins to the quality of care
be quality outliers on business ventures 3. Get into
physicians aligned with
that increase diagnostic 5. Improve collections to 4. Install information complementary and
4. Create observation competing hospitals alternative medicine in
and therapeutic volumes net more revenue systems and
beds to free-up 4. Protect referrals to and revenues for both connectivity that support ways that do not
med/surg beds the physicians and 6. Renegotiate HMO the management of alienate your medical
your specialists that
hospital contracts in which you clinical quality and staff
5. Move lower margin are coming from primary
have leverage to cost per case
cases to beds in lower care physicians and 4. Launch e-commerce
5. Encourage primary care improve payment
cost settings institutional referrers physicians on your policies and increase 5. Reduce corporate ventures that establish
outside your local medical staff to join rates overhead costs while your web site as the
6. Shift the allocation of market area provider panels of maintaining support to focal point for
bed capacity away from targeted HMOs 7. Manage payor denials line managers information, services
low/negative margin proactively and transactions that
cases toward high 6. Extend existing products 6. Restructure those serve consumers and
margin subspecialty and services into 8. Audit HMO receipts to pieces of the care your aligned physicians
cases adjacent markets assure full payment continuum that are
against contract terms strategically important
but producing losses
7. Dispose of losing pieces
of the continuum in ways
that assure continuing
referrals of customers
REYNOLDS & COMPANY
Customizing Strategic and Financial Solutions