Measuring the profitability of a hospital pulmonary function laboratory: a case study.

The primary purpose of this article is to evaluate a proposal for a regional hospital to create a second Pulmonary Function Test laboratory (PFT lab) for outpatients. We separated the PFT lab from its departmental budget, thereby allowing a unique determination of the lab's profitability. The lab's separate financial analysis helped us to gain an understanding of the revenues and expenses of the PFT lab, providing information needed to comment on the proposed second lab. Additionally, we recommend a means for maintaining separate control over the PFT lab's revenues and costs and ascertain the efficacy of instituting a separate budget for the PFT lab.

The impact of BPO on cost reduction in mid-sized health care systems.

At the convergence of two politico-economic "hot topics" of the day--outsourcing and the cost of health care-lie opportunities for mid-sized health systems to innovate, collaborate, and reduce overhead. Competition in the retail health care market can serve as both an impetus and an inhibitor to such measures, though. Here we are going to address the motivations, influences, opportunities, and limitations facing mid-sized, US non-profit health systems in business process outsourcing (BPO). Advocates cite numerous benefits to BPO, particularly in cost reduction and strategy optimization. BPO can elicit cost savings due to specialization among provider firms, returns to scale and technology, standardization and automation, and gains in resource arbitrage (off-shoring capabilities). BPO can also free an organization of non-critical tasks and focus resources on core competencies (treating patients). The surge in BPO utilization has rarely extended to the back-office functions of many mid-sized health systems. Health care providers, still a largely fragmented bunch with many rural, independent non-profit systems, have not experienced the consolidation and organizational scale growth to make BPO as attractive as other industries. Smaller firms, spurning merger and acquisition pressure from large, tertiary health systems, often wish to retain their autonomy and identity; hence, they face a competitive cost disadvantage compared to their larger competitors. This article examines the functional areas for these health systems in which BPO is not currently utilized and dissects the various methods available in which to practice BPO. We assess the ongoing adoption of BPO in these areas as well as the barriers to adoption, and identify the key processes that best represent opportunity for success. An emphasis is placed on a collaborative model with other health systems compared to a single system, unilateral BPO arrangement.

Managing manpower and cutting costs in the health care industry.

The Bureau of Labor Statistics projects that health care services will account for one out of every six new jobs from 2002 to 2012. Based upon workload fluctuations, some companies in health care have opted to utilize "just-in-time" employees. Such an employee not only serves to stabilize the workforce but can also reduce employers' cost by allowing them to pay for labor only when they need it. Based on the analysis, a company should reduce reliance on casual staff, as the upfront cost per hire is far greater than hiring a temporary employee. Information presented points to fairly high turnover among casual employees, thus bolstering the argument against this staffing scheme when compared with temporary employee staffing.

Balanced scorecard application in the health care industry: a case study.

Balanced scorecards became a popular strategic performance measurement and management tool in the 1990s by Robert Kaplan and David Norton. Mainline companies accepted balanced scorecards quickly, but health care organizations were slow to adopt them for use. A number of problems face the health care industry, including cost structure, payor limitations and constraints, and performance and quality issues that require changes in how health care organizations, both profit and nonprofit, manage operations. This article discusses balanced scorecards generally from theoretical and technical views, and why they should be used by health care organizations. The authors argue that balanced scorecards are particularly applicable to hospitals, clinics, and other health care companies. Finally, the authors perform a case study of the development, implementation, and use of balance scorecards by a regional Midwestern health care system. The positive and negative aspects of the subject's balanced scorecard are discussed. Leaders in today's health care industry are under great pressure to meet their financial goals. The industry is faced with financial pressures from consumers, insurers, and governments. Inflation in the industry is much higher than it is within the overall economy. Employers can no longer bear the burden of rising group health insurance costs for its employees. Too many large companies have used bankruptcy law as a shield to reduce or shift some of their legal obligations to provide health insurance coverage to present or retired employees. Stakeholders of health care providers are demanding greater control over costs. As the segment of un- or underinsured within the United States becomes larger as a percentage of the population, voters are seriously beginning to demand some form of national health insurance, which will drastically change the health care industry.

Cost offset effect strategies for the provision of mental health care services.

This analysis examines what is currently known about the financial efficacy of mental health services in relation to the cost offset effect in health care. Moreover, it suggests that the provision of mental health services should be intertwined with cost offset strategies in regard to its practice, research, and promotion. In doing so, policy decisions and ethical practices of care concerning mental health care delivery may be shaped within an adequate cost structure.

Measuring human capital cost through benchmarking in health care environment.

Each organization should seek to maximize its human capital investments, which ultimately lead to increased profits and asset efficiency. Service companies utilize less capital equipment and more human productivity, customer service, and/or delivery of service as the product. With the measurement of human capital, one can understand what is happening, exercise some degree of control, and make positive changes. Senior management lives or dies by the numbers and if Human Resources (HR) really wants to be a strategic business partner, HR must be judged by the same standards as everyone else in the health care organization.

Wellness programs: a remedy for reducing healthcare costs.

Offering wellness programs has become a popular method for preserving the health of employees in the hope of generating lower healthcare expenses and, in turn, higher profits. This article offers a cost/benefits analysis of providing wellness programs, to determine whether such programs could add value to a company. Recommendations follow for how to implement a successful wellness program with minimal initial costs should an analysis find that wellness initiatives would prove beneficial.