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Guide to Strategic Cost Transformation in Hospitals and Health Systems

All sectors of the health care industry are increasingly challenged by today’s economic and political climate to control costs while increasing quality, access, and efficiency. A new guide from KaufmanHall and HRET is focused on strategic cost transformation for hospitals and health systems.

The guide identifies 3 pathways needed for cost transformation to occur:

  1. Reducing costs of current operations
  2. Reducing costs through restructuring business and service lines
  3. Reducing costs through clinical transformation

The first and second pathways – cost management and business restructuring — for reducing costs are the key focus of this guide. Advice for laying the groundwork, opportunities for cost management, and approaches to assessing business and services are included.

Hospitals and health systems can start the strategic cost transformation by:

  • Ensuring the CEO drives the process
  • Developing and implementing a master plan
  • Bolstering the organization’s business platform and its full functioning at all levels
  • Creating and supporting cultural change

Eight action steps are provided for the board and hospital leadership to define and implement the business strategies appropriate for their organization.

Source: Blake JW and others, Kaufman, Hall & Associates. A guide to strategic cost transformation in hospitals and health systems. Health Research and Educational Trust, Mar. 15, 2012. http://www.hpoe.org/resources-and-tools/resources/guide-strategic-cost-transformation-hospitals-health-systems.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

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