How Leaders Can Look Within for Answers
With healthcare reimbursement constantly changing, health systems and hospitals are searching for new revenue streams to diversify their income. Financial cuts, new regulations, and payer contract negotiations have pushed healthcare institutions to find new, creative ways to keep revenue flowing while still maintaining high quality care.
“Exploring diversified, innovative revenue streams” was listed as third most important issue of strategic importance in a recent survey of 146 C-suite executive. A Becker’s Hospital Review article covering this survey shared that “C-suite executives at both health systems and community hospitals are shifting their focus to nontraditional sources of growth rather than relying solely on conventional determinants of market share.”
What’s Prompting The Disquiet Felt by Hospital Leadership?
A focus on the continuum of care is of high concern with the shift to accountable care and quality-based measures. Re-admissions negatively impact a hospital’s revenue streams not only from a cost perspective, but also the perception by private health insurers and the public.
Many healthcare providers are feeling the pressure to treat patients outside hospital walls. New technologies have shifted several treatment options to the outpatient setting and adjusted the public expectation to quicker recovery timelines and lower cost. This new expectation is enough motivation for patients to travel further for more efficient care.
Further, with more and more baby boomers becoming eligible for Medicare every day, healthcare providers should be prepared to meet their needs. Service lines that have been historically profitable should be reevaluated to test their future viability.
Innovative Thinking is the Answer
There are new avenues to revenue growth aside from traditional methods of offering new service lines, updating technology, or building new offices. Many large health systems are taking the lead in developing and commercializing creative ideas generated by their own clinicians and by outside inventors looking for a source of support. Hospital leadership must diversify through innovative thinking and look inward for opportunities to capitalize on.
Stratasan understands how vital innovation is to growth. In the past, we’ve offered practical tips for fostering innovating in your organization, shared insights collected from an innovation conference, and outlined how we’re committed to letting innovative thinking drive our product development process. In this post, we continue our discussion on innovation and provide suggestions for hospital leaders looking for creative ways to drive revenue. Many of these ideas can be implemented by capitalizing on internal resources and assets.
Opportunities for Innovation
Below are five ways to create new revenue streams for your hospital:
- Provide Convenience: As mentioned above, the population expectation is shifting to demand more efficiency in the healthcare continuum. Elderly patients are tasked with coordinating transportation for their appointments and desire the convenience of a one-stop-shop. To meet this need, there will be growing pressure for providers to offer imaging, x-ray, physical therapy, and other services under the same roof. Some groups are even offering point-of-care dispensing to assist with compliance of doctor’s instructions for care. Offering this service creates better outcomes and ensures patients get the supplies needed to prepare for surgery and treatment after. (This article provides more information.)
- Develop Wellness Programs, Fitness Centers, and Restaurants: Smaller community hospitals have seen success in providing wellness programs and options for healthy activities for their communities. Faith Community Hospital, for example, was struggling to survive in the early 2000s. However, in 2010, led by new CEO Frank Beaman, the hospital was able to turn over a new leaf. One of Beaman’s initiatives was to improve the quality of food provided by the hospital. This eventually led the staff to grow their own garden to supply fresh vegetables. Community members were able to collect the extra fresh produce from the abundant supply. The hospital received enough community praise and requests to expand to catering services. The hospital later opened the restaurant Faith Cafe, which is now a staple among locals.
- Maximize Unused Space: Hospitals often have space that is not used to capacity or that could be converted into a multi-use area. Below are a few ways hospitals can make the most of extra space:
- Physician offices are empty for 12 hours a day. Take advantage of that available time by adding sleep clinics. With the aging population, sleep studies are in high demand and often have waitlists for months.
- Make the most of unused conference rooms and meeting space. Open your doors to allow the community to rent or lease unused meeting rooms.
- Offer special services like sports physicals or flu clinics.
- Leverage Employee Experiences and Skills: Intellectual property is a high resource of untapped potential for revenue growth. Every institution must identify unique processes and policies that work for them to commercialize their intellectual property. Ideas include the following:
- Work with employees to develop training videos, technology tools, or patient safety solutions.
- File patents for new medical devices.
- Develop technology solutions to sell to the larger healthcare community.
- Reach Patients in New Ways: Telemedicine is taking the healthcare industry by storm, offering convenient solutions in underserved areas struggling with access to care. It also helps clear the hurdle of increasing patient demands for more efficient care. Digital images, audio clips, and video clips can be shared in minutes with a consulting physician who can quickly review and make recommendations. This process, without telemedicine, could take days or weeks. Alternatively, offering mobile clinics and bringing healthcare to underserved areas has been a successful option for many areas.
Leading by Example
Below is a list of hospitals and health systems that have found ways to implement some of the strategies above. Their innovative and creative thinking has opened the door to new, helpful revenue opportunities. Let their success provide encouragement to implement some of these strategies in your hospital:
- Horizon Health created Elite Sport and Fitness, a community fitness club, which began in its physical therapy building for a small group of local athletes.
- Cleveland Clinic partnered with Dell to offer Epic EMR consultation services to other health systems which include installation, configuration, and hosting.
- Cleveland Clinic also created the Healthcare Innovation Alliance, which is designed to advance innovation and leverage the Cleveland Clinic’s commercialization expertise to guide other institutions through the process of bringing their inventions, technologies, and products to market. Cleveland Clinic Innovations has developed intellectual property, filed over 400 licenses and created 55 start-up companies.
- The Innovation Institute is based out of Orange County, California and is owned by seven founding non-profit health systems. This program provides an acceleration to execution of strategic initiatives. It provides innovative solutions, business process services, and investment management services.
- Dell Medical School Biomedical Data Science Hub was developed to increase the pace of healthcare innovation.
- Johns Hopkins developed a new patient remote monitoring tool that utilizes video, email, and text to improve patient care. This started as a training program for healthcare workers treating HIV in Uganda and developed into a multimedia platform for adherence, clinic trials, and chronic diseases to eventually become the startup Emocha.
- The University of Pittsburgh Medical Center began selling its analytics software designed to help physicians choose treatments that would yield the best patient outcomes.
- Bibb Medical Center in Alabama established a 79-unit senior retirement community as a part of the hospital campus with 100 percent occupancy and a waiting list. This service has long-term benefits for the medical center since the majority elect to become residents in the affiliated nursing facility when independent living is no longer possible.
For today’s healthcare leaders, innovative thinking is the key to staying viable and profitable. Without new strategies and creative new solutions, a hospital can quickly get buried in the evolving world of healthcare reimbursement and financial cuts.
For more information on how Stratasan can partner with you through the strategic growth process and help you maintain a focus on innovation along the way, contact Sean Conway and schedule a discovery call today.
Article by Morgan Atkins, Director of Innovation for Stratasan