Why Your Healthcare Business is Losing Money, and How to Stop It
- Brainz Magazine
- 3 days ago
- 7 min read
Kass James is an assistive technology specialist with a master’s in management of information systems from the University of Houston’s Bauer College of Business. Fully licensed in ADA compliance and environmental access, he’s a partner at The Spoonie Advocate Associates.
In today's healthcare strategy, too many companies rely on outdated 1990s business models. Just as no one uses a car phone anymore, there’s no reason to run your clinic or hospital with obsolete strategies.
Serve your needs by supporting your employees
One of the most significant revenue losses is due to employee turnover and absence. The cost of retraining, hiring temporary coverage, or paying overtime is staggering, and the bigger your workforce, the more it happens. Too many companies see this as a pay issue, but the number one complaint among healthcare employees about burnout is a lack of support from administration. Making a job safer and easier is a great way of encouraging employee retention.
Make coming to work easy. Reserved free parking and provided PPE and scrubs are the minimum requirements for working in any healthcare system. Doctors expect not to pay for parking, but having dedicated spaces for everyone, from nurses to maintenance, really pays off. Please don’t make them start their day by fighting to get to work or having to pay for disposables.
Support your employees' families' needs. Insurance and childcare costs are rapidly rising, but they are essential to maintaining your staff's peak performance. Some healthcare systems offer coverage only to full-time employees, which is unwise. Outside of personal injury, family emergencies are the main reason for employee callouts, while family benefits are cited as the top retention reason among employees with children. Make their family's concerns your own, and you will retain your most experienced employees.
Keep your staff safe by staying proactive. The top reason for callouts and burnout is injury and physical overexertion. While slips and falls are common, patient transfer and positioning is the main cause of nurse injuries. Although expensive, systems like The Morel Company’s Hercules Patient Repositioner or Secna’s Easyshift System will keep your staff safe while enhancing patient comfort. These companies have all provided data proving that investing in these systems saves more money than they cost through higher employee retention and fewer sick days. Prevent turnover by making their work less exhausting.
Serve your patients by providing comprehensive care
The comprehensive care model should be second nature to most healthcare systems, yet it still seems difficult for some administrators to understand. To provide the best care, your goal should be to ensure that every aspect of a patient’s healthcare needs are met.
Provide options for every aspect of care. Healthcare often tends to silo itself into specific areas of expertise without input from other systems or, in many cases, from different departments within the same system. Departments should aim to replicate the success of Dartmouth-Hitchcock’s Center for Pain and Spine by collaborating with other departments to deliver comprehensive care at every level. While the complex nature of back pain requires a team of doctors, social workers, imaging specialists, and surgeons to address patient issues, you can apply this model more broadly to achieve similar levels of success. Intake forms should accommodate healthcare concerns beyond a department’s specialization, and clinicians should feel comfortable referring patients to other departments to address those needs. This is especially important for patients with complex medical conditions, but even walk-in clinics should be able to refer patients to specialists inside or outside their system. A dental clinic that refers patients to cardiology and ophthalmology concerns has a much more loyal customer base than one that keeps care siloed within dentistry. Improve customer loyalty and satisfaction by effectively addressing multiple concerns.
Offer more effective alternatives to care. If patient outcomes are the measure of healthcare value, then prioritize them over adherence to tradition. The cost of an extended care facility is often a tenth of the price of a hospital bed, and being able to provide that to an individual after a severe cardiac event means that their recovery outcome will be more favorable. Organizations like the Child's Play Charity demonstrate that patients’ mental health significantly influences outcomes, yet many systems only offer a TV in a room and little else. Examine every aspect of your patient’s health and seek ways to improve it.
Create opportunities for feedback. This has become more common with interactive EHR systems, but does it truly provide a path for growth? Too often, administrators see this as just a source of criticism. However, using analytics, you can better address the weaknesses in your office. If you have long wait times, look at Kaiser Permanente’s efforts toward a no-wait emergency department. If you frequently clash with an insurance payer, find a representative who will advocate on your behalf. Larger institutions tend to be slower to adapt, but they also have more influence with companies. Listen to your patients' concerns and genuinely work to address them.
Train your employees to recommend comprehensive care. The model is ineffective if your employees are afraid to make recommendations. A reliable EHR system can offer options, but something simple, like a wiki for trusted alternatives, can be very useful. Training them to collaborate also fosters teamwork, which should be the goal of any extensive healthcare system. Meeting all your patients’ needs will lead to happy and healthy customers for life.
Serve your healthcare business goals and make informed decisions
We often forget that healthcare is a business and that most MBAs have little to no understanding of effective healthcare strategies and values. Unless you’re in a financial crisis, you likely don’t need a full-time healthcare business strategist, but that doesn’t mean you shouldn’t be involved in improving your business. Complacency leads to failure, and in an industry facing turmoil, failure is a very real risk.
You’re limiting yourself by providing care based on what you could do twenty years ago. This isn’t about healthcare innovation, but rather about accepting that your market options are changing. Market disruptors like the Community Blood Center of the Carolinas create big waves and offer new choices, but you should also regularly explore alternatives to your usual vendors. Changing EHR software is very challenging, but conducting annual reviews of your platform is essential. If you don’t have a COO, you should at least have an administrator responsible for assessing whether your vendors are effectively meeting your needs. Epic, Cerner, and Allscripts are all solid options, but are they still fulfilling your clinicians' needs? Do you have a data analytics vendor, and does it integrate smoothly with your EHR system? HITECH and HIPAA standardized many of these systems, but relying on software chosen 15 years ago without review is costing you time and effort.
Fight for your patients to secure insurance coverage. Insurers love to deny, deny, and deny, which costs both patients and healthcare systems dearly. Many systems turn to collections and overlook the more effective step of advocating for their patients. Considering that an estimated 15% of medical debt remains unpaid, yet 80% of those bills are for individuals with insurance coverage, there's significant value in working on your patient’s behalf. If you trust that the care was medically necessary, then the insurance company is choosing to deny coverage on a technicality. Hiring social workers who specialize in navigating insurance companies’ deliberately complex systems can help ensure you get paid. You’re aligned with your patients’ interests when it comes to insurance, and having a dedicated team to handle these issues ultimately pays for itself.
Understand your business needs and outsource accordingly. This depends on what aligns with your business values. While many healthcare systems outsource IT infrastructure, housekeeping, and even nutrition, some of these functions might be better handled in-house. You may need to pay employees more, but controlling the department can offer better options. In IT, you certainly outsource your EHR/EMR system, but is managing your printers or email service valuable? Is your housekeeping service trained in hazmat disposal, and are the chemicals they use the best for your facility, or is that not relevant to your business? Full outsourcing to a third-party service removes much of your decision-making power, but it also frees up your time and reduces facility costs. Evaluate what is essential to your business and where you need that negotiating power. Every business outsources services, regularly evaluates its needs and plans accordingly with stakeholders.
Healthcare is unlike any other industry, so pay attention to healthcare business professionals. Many MBA graduates enjoy writing theoretical articles, and the Harvard Business Review reprints Michael Porter’s 2013 article "The Strategy That Will Fix Health Care" every year. However, very few business schools offer courses in healthcare business strategy. Balance sheets and expense reports are important, but the six aspects of the value agenda are only so helpful for an MBA who has never worked in healthcare. Likely, you don’t need to transform your business model, you simply need to reflect on your values and outcomes. There seems to be a difficulty for businesspeople to realize that the product they sell is actually a service, and that the value isn’t about competition with others, but about the outcomes for the patient. Healthcare value is measured as costs divided by outcomes, yet many businesses believe that low-cost healthcare is more valued than effective healthcare. In truth, this better reflects what customers can afford, but with an effective business strategy, you can make your services accessible while delivering excellent care.
Everything hinges on understanding your business values. Patients, clinicians, and administrators all share a common objective, achieving good outcomes that are simple and affordable. Once you recognize that these stakeholders have the same goal, you can develop business strategies that benefit everyone. If you encounter challenges, healthcare business strategy experts can help you get back on track.
Read more from Kass James
Kass James, Healthcare Business and Disability Specialist
Kass James is a forerunner in the field of disability rights, corporate responsibility, and healthcare business. Having been physically disabled for most of his life, Kass was acutely aware of the lack of accessibility in the workplace. His work focuses on restructuring healthcare to increase profitability while benefiting patients, as well as doing patient assessment for ADA compliance and assistive technology. He’s a partner with the Spoonie Advocate Associates, an organization pushing for increasing value and patient outcomes through common sense and responsible change.
