I visited a top academic hospital in the United States today. Working with the Chair of one of the departments, he provided an insight I hadn’t really heard of before. This addresses many of the management ideas that we have all learned about – setting priorities (as opposed to trying to do everything), the 80/20 rule, and change.
The department Chairperson stated to me that he has been at several facilities that have undergone a major leadership change. Then he gave a great example of misaligned priorities – he said, “You can always tell when a new COO comes in – we get a new system to track our linens.” He then joked that we have millions of dollars in waste – in being oversupplied, in not charging for what we should charge for, and other higher priority inefficiencies. “But for some reason Suneil, new leadership always likes to focus on linens. There is no money in linens!”.
I thought about this at length on the plane ride home after the meeting with this department Chair. The leader in me said “Hey! Don’t make fun of my Leadership brothers and sisters!” Then, my analytical hat went on. Maybe it’s because this is low hanging fruit, and has been proven at many hospitals. Maybe it’s because the new leader wants to show change in a very tangible way. And I am sure there are several other reasons this could happen.
Healthcare delivery is expensive, and its full of data gaps and information siloes that make it harder to get better. Yet, one extremely high impact area is easy to analyze, improve and save millions of dollars in many cases – and it’s a basic 80/20 or ABC accounting rule: Look at your most expensive areas, then see what they are spending the most money on, besides people. Most of the time, this means starting with your procedural areas (OR’s, Cath and EP Labs, Radiology). Then look at your A-class items (like your $30,000+ TAVI/TAVR devices). Know that your team, like in any business, doesn’t manage it like it’s their own money (do you still have employees that “borrow” paper reams from your supply closets?).
In today’s world, using a process such as this is an easy way to eliminate a huge amount of waste in dollars – this will directly impact your bottom line. Spend time focusing on what matters, not on everything. Your hospital has gold in every corner, not at the end of some rainbow. You can find it and get to it if you prioritize the highest value areas. It may mean the difference between 3% profit at the end of the year, or 3% loss at the end of the year.
About Suneil Mandava:
Suneil Mandava is President, CEO and Co-Founder of Mobile Aspects, a healthcare software company focused on improving efficiency and safety in hospitals. To learn more about how Mobile Aspects can increase your efficiency and revenue capture in procedural areas, visit our website and request a demo.