4 cost reduction tips for children's hospitals

Dan May, managing director at Huron Healthcare, offers the following operational and financial tips for executives at children's hospitals, which increasingly face the same market challenges as other hospitals, he said.

1. Take a comprehensive and thorough approach. Even high-performing children's hospitals may leave significant performance improvement and cost savings opportunities untapped. The key to realizing those opportunities is to look comprehensively across the enterprise and to examine each area with a greater level of granularity than previously required.
2. Demonstrate leadership and create effective governance. Transformative change starts at the top. Successful leaders demonstrate a commitment to changing the organizational culture on a daily basis. The right governance structure is also essential, with an executive steering committee that includes executive and clinician leadership from every area.
3. Engage physicians. It's essential to involve physicians and to earn buy-in from the beginning. Transparency is crucial; data must be presented and interpreted accurately. Medical staff at all levels and from all work teams should be involved. Once the structure is in place, communication is key.
4. Hardwire the change. Performance metrics, including daily and monthly dashboards, and accountability structures are essential for creating sustainable improvement.

“With their higher percentage of Medicaid pediatric patients and many states adopting a Medicaid reimbursement model on a Diagnosis Related Group (DRG) basis, there is growing pressure for children's hospitals to significantly reduce costs while maintaining high-quality, accessible care,” May said.

For more on a systemwide approach to operational and financial improvement, see May's presentation at the 2013 Children's Hospital Association Annual Leadership Conference.