Budget crunch

Here at GVMH we are in the process of creating our budget for the next fiscal year which begins April 1, 2014.  The budget is a challenge every year but this year is more of a challenge than most. 

Each year the cost of doing business increases because supply cost, personnel cost, contract cost and service costs all increase from one year to the next.  What makes this year’s budget challenging is that although costs are increasing, revenue will be decreasing.

We are beginning to feel the effects of reductions in reimbursement from Medicare, Medicaid and other pay sources.  Payment reductions as a result of the Affordable Care Act, sequestration and the transition of care from volume to value will result in about a $1 million dollar decrease in revenue next year for GVMH.

As you can imagine increasing costs and decreasing revenue don’t go hand in hand and all hospitals are struggling to identify ways to rein in cost.  For us to meet the needs of the community and provide valuable services it’s important that we create a budget with some margin, otherwise we won’t be able to add and enhance needed services or keep pace with technology.  If we neglect our responsibility to grow and improve services we will not be able to provide the quality care our community needs and deserves.

As challenging as this year’s budget is, it is only going to get harder as we move forward.  The care delivery model is changing and more payment reductions are set to take effect in the coming years and I’m going to guess that the cost of doing business will not decrease at the same pace, if at all.

These are challenging and exciting times in health care.  The face of health care as we know it is changing before our eyes and the only way GVMH, and all hospitals, will be successful is to change with it.  If we continue “business as usual” we will struggle to provide the high level of care our community deserves and we may even struggle to remain viable. 

We are in an environment where standing still is not an option and those who wait to react will get passed by those who are working to stay one step ahead of change.  There’s opportunity for those who seek it and there will be consequences for those who don’t. 

Many of you who read this blog on a regular basis are members of the GVMH Team.  If you have ideas on how we can become more efficient and reduce cost, please let me know.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Operating Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. These are challenging and exciting times in healthcare and my blog will focus on healthcare, raising boys or being raised by boys, and living in mid America.
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2 Responses to Budget crunch

  1. Candace says:

    I had a stay at the hospital for an appendectomy as recent as last week. When I was being dismissed from my room, the nurse asked me if I wanted any of the things in the room; Kleenex box, toothpaste, toothbrush, etc. She said all of it would be thrown away if we didn’t take it. I’m sure it does help with the flow of things for those items to already be in the room. However, I didn’t use any of those items but took it with me because I felt like I had paid for those items. It would be a small amount, I’m sure, and often times the cost of something doesn’t outweigh the convenience of the item already being in the room but what if those things were supplied only when the patient needed those items? I did like the change in the cups. I liked having the larger cup with a straw and lid for drinking. I think I drank more water post op then I would have if I had been drinking from a small styrofoam cup and one of those pink pitchers.

  2. Jim Begin says:

    I believe one of the things we can do better is to eliminate paper. Level 7 HIMSS Analytics hospitals are paperless. Many departments rely on paper to trigger them vs. viewing the trigger event on their status boards. An add on question is do you utilize an electronic document system and never create paper at all or do you create paper and then scan it into the system at that point and put the paper into a shredder. Obviously never creating the paper is better but a lot of work and up front cost. The problem with my suggestion is multiple issues:
    1. I.T time to create a true paperless environment
    2. Education – for staff to use electronic world and resistance to this environment.
    3. Breaking physician reliance on Fax vs electronic world and paper orders when more convient than electronic communication.
    4. Cost of equipment – scanners & software to setup this paperless world.
    I am sure there are other road blocks than what I just mentioned, but I firmly believe that elimination of paper is the way to go.

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