Cuts in non-salaried areas promote long-term efficiencies without compromising patient care or the levels of support hospitals provide to patients and physicians.

How hospitals address the economy’s double punch of declining patient volumes and increasing bad debt/charity care could make hospitals more efficient and more valuable to their communities in the future, according to Robert Broadway, chairman of the Healthcare Financial Management Association.

Encourage Staff and Physician Cooperation
To ensure long-term benefits, administrators should ask physicians and nurses to help identify savings opportunities.

By reducing costs in preference items, physicians can help hospitals realize huge financial benefit. “Likewise, nursing managers who want to preserve their hard-won nursing staffs may be eager to help identify non-salary reductions,” says David Markoski, senior vice president of VHA’s Performance Services.

Tucson Medical Center exemplifies such cooperation, realizing $12 million in savings in 15 months after analyzing spending throughout the hospital.

VHA can also help reduce medication expenses through improved contracting, standardization and utilization practices. For instance, through its Pharmacy Services, VHA saved Crozer-Keystone Health System more than $1.8 million annually in formulary costs.

“VHA helped us validate opportunities to reduce our medication costs and ensure proper formulary and drug use management,” says Steve DiMambro, Crozer-Keystone’s vice president of Support Services.