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And the specialty drugs it purchases for conditions such as hepatitis C are getting more expensive. As a result, Froedtert saw its supply costs shoot up Salary and fringe benefit costs also increased a combined The overall rise in expenses narrowed its operating margin for fiscal Demographic trends, such as the aging baby boomers, also are moving in hospitals' favor.
But as more care is delivered in an outpatient setting, the patients who wind up in the hospital tend to have more complex medical needs than they did in the past. These higher-acuity patients require more equipment and more sophisticated technology, driving up supply and labor costs at a time when systems also are facing public and private payment squeezes.
As a result, for many systems across the country, the expense side of the balance sheet is growing almost as fast as the revenue side, prompting providers to look for new ways to cut costs.
A Modern Healthcare analysis of fiscal financial results for 59 not-for-profit health systems found that operating expenses increased an average of 6. More than half of the systems in the analysis reported a year-over-year decline in their operating surplus. While higher patient volume is generally a good thing for hospitals, providers are also seeing more patients who previously were uninsured or underinsured, said Lori Pilla, vice president of supply chain optimization at Amerinet, a group purchasing organization.
At the point where these patients arrive for care, they often require a higher level of service. MH Takeaways Providers are seeing more newly insured patients who often require a higher level of service, requiring more equipment and technology and driving up supply and labor costs.
The Nashville-based company attributed the difference to fewer obstetrics patients in the exchange group. HCA said it expects its patient acuity to continue to increase as care for less serious conditions moves to the outpatient setting.
But investing in cardiac catheterization labs and emergency departments requires costly equipment that can quickly run up expenses, particularly for smaller hospitals that might not get the same volume boost, Pilla said. Amerinet looks at a hospital's payer mix and most common billing codes and compares those factors to the hospital's purchasing habits.
A small rural facility, for instance, would be advised against investing in a robotic surgery system if it doesn't have the volume to support the cost, especially for indications where it won't see additional reimbursement, Pilla said.
Earlier this year, Sentara Healthcare asked its employees for ideas on boosting quality while also cutting costs. The hospital system based in Norfolk, Va. Its performance-improvement initiative is designed to take a hard look at all of its nonsalary operating costs.
About suggestions poured in, including simple solutions such as using in-house dietary departments instead of outside vendors to cater meetings and events. Sentara's focus is on standardizing practices across its growing portfolio of hospitals. Sentara's same-hospital admissions have been flat, but the system did see additional volume from two new takeovers.
One example of standardization was eliminating continuous passive motion as a standard of care in orthopedics. Continuous passive motion machines were designed to flex the knee joint after surgery but have shown no benefit in recent studies.
Many systems have banded together to form regional alliances that still allow them to retain their independence, but offer the purchasing power of a much larger organization.
The more that systems can coordinate their purchases—not only across their hospitals but also their physician practices—the more money they can potentially save, Pilla said. Trinity Health, a not-for-profit system formed in from the merger of Trinity Health with Catholic Health East, has been leveraging its size to better manage its purchases, said Chief Financial Officer Benjamin Carter.
Most of those savings came from the corporate office, in areas such as risk management, human resources and information technology.
Finding other savings To tackle compensation costs, Trinity froze its pension plan for legacy employees of the pre-merger Trinity Health and moved all staff members to a defined-contribution plan. Vested employees had the option to take a lump-sum payout. While systems are focusing on creative ways to cut costs, one area where they've run into difficulty is pharmaceutical supplies.
New drugs for cancer and hepatitis C carry price tags in the upper five figures—or higher. Hospital systems that also operate health plans particularly have felt the pinch of higher drug costs. The Massachusetts Medicaid program has not yet determined whether it will pay Medicaid managed-care plans for the cost of the product, the system said in an earnings report.
Drugs costs are increasing much faster than the costs of other supplies.This statistic provides a breakdown of the cost of hospital care, sorted by the percentage of total spending of each type of hospital expense in As of that year, wages and benefits for. Globally, the medical device market is over $ billion.
Medical devices are classified in one of three regulatory classes, the classification is dependent on the intended use of the device and indications for use. The US accounts for approximately 38% of the global medical device market. Key Hospital Financial Statistics and Ratio Medians: Glossary of Formulas Average length of stay (days) The average stay counted by days of all or a class of inpatients discharged over a given period.
Atrium Bio-Medical Supply, Inc. Atrium Bio-Medical Supply is a medium sized regional supplier of medical and laboratory equipment. Since starting the company 12 years ago, Victoria Dawn has built Atrium into a competitive supply company across several metro areas, but her growth potential is limited because the firm does not have an integrated sales and logistics system. Key Hospital Financial Statistics and Ratio Medians: Glossary of Formulas Average length of stay (days) The average stay counted by days of all or a class of inpatients discharged over a given period. To the materials manager and to the financial minds of a hospital the area of supply chain is a tedius task at best, the kind of planning, strategizing and measuring that seldom goes recognized and rewarded.
Two fundamental items of financial data needed by a hospital manager are allocated costs by cost center (a program or department within a hospital) and the unit cost of hospital services. A unit of.
Medical office forms, templates, checklists, and spreadsheets used in physician practice management. On this page you will find forms, checklists and spreadsheets useful for starting up and managing a medical practice. Monthly Financial Analysis Worksheet. Compensation Questionnaire. Employee Time Off Request Form.
Financial analysis is an aspect of the overall business finance function that involves examining historical data to gain information about the current and future financial health of a company.