Cutting Costs Doesn’t Guarantee Healthcare’s Financial Success

I received the following from Simione Healthcare Consultants and thought it actually quite provocative so thought I’d share. There are some really great organizational leadership insights here that are worth a look.

In a nutshell, integrated actions must be taken to create an environment where health organizations can achieve positive and sustainable results. Positive changes must be made from the inside out to achieve lasting financial gains without sacrificing quality, access or the level of patient satisfaction.

Take a look at the following. If nothing else, it’s an interesting read:

Ron Barrera
Ron Barrera

Congratulations, your business has reduced expenses. It must be a relief to finally be on track. Ron Barrera, director at Simione Healthcare Consultants, responds politely with, “Not so fast.” Given the complexities and requirements residing in all healthcare organizations, Barrera says that financial success today means thinking beyond simply cutting costs.

“Organizations must work intentionally to implement a wide range of integrated actions to thrive and achieve positive, sustainable financial results. When a hospital, home health agency or hospice eliminates or reduces an expense without consideration for the process behind it, the value of services may suffer. Positive changes must be made from the inside out to achieve lasting financial gains without sacrificing quality, access or the level of patient satisfaction,” Barrera explains.

The Atlanta-based Simione finance and operational expert suggests that home care and hospice agencies consider four strategies for operating at peak performance:

In maximizing existing resources, Barrera suggests efforts to engage employees at all levels to build enthusiasm and a commitment to improving outcomes. “Any time you spend with your team communicating about the value of their work and discussing ways to improve will help productivity,” he says, “and special attention to your management team will develop more effective leaders to engage the hearts, hands and minds of staff.

“All but 1 percent of leadership occurs not at the top, but from the middle of an organization.  You have to cultivate a highly skilled management team to hit the target established in the boardroom,” Barrera adds.

To simplify processes, Barrera recommends a detailed look at work flow to ensure that all operational activities are functioning effectively. “A thorough review of process, paper and information flow will help determine and prioritize opportunities for improvement. These activities set the stage for eliminating steps with Lean Six Sigma standards to guide decisions that will create financial savings. Maintaining quality is the bottom line,” he says.

Today’s quest for financial improvements is also revolutionizing clinical service delivery models. In fact, Barrera says that effective assignment and scheduling of patients and their clinicians is the core activity where communication and technology help to maintain the health of both patient and provider. “Are the right people in the right place, supported by the necessary resources, to manage patients and improve their situations – getting it right the first time – to avoid rework, questionable reimbursement, or readmission?” Barrera asks.

Finally, home care and hospice organizations can realize financial gains by leveraging the use of technology. “Even though many agencies have electronic point-of-service systems in place, many are not using them to their fullest capacity,” Barrera explains. “If you have made the investment in a system to streamline processes, then by all means get all of its features turned on and working for your benefit.  Update, train, test and audit for every technology option you have to fully operationalize the system for clinical and financial success.”

According to Barrera, other financial strategies beyond cost cutting include evaluating:

When all is said and done, Barrera says that working smarter for financial success means making mindful allocations toward a culture of performance excellence and accountability.  “It comes down to understanding how your organization spends its money and evaluating what is important.  What drives revenue? What drives cost?  What drives quality? How can they all work together to produce excellence in a financially successful setting?”

About Simione Healthcare Consultants
Founded in 1966, Simione Healthcare Consultants embodies a diverse group of business talent in 23 states to provide accessible, cost-effective business solutions for the home health and hospice industry. Simione supports performance improvement across the healthcare continuum, engaging hospitals, health networks and agencies for more effective delivery of home health and hospice care. More than 1,000 organizations use Simione’s experts and tools to improve care, reduce costs, and minimize risk to drive business performance. Visit for more information.

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