2021 Resolutions to Get Your Budget in Shape!

The arrival of the new year sees many of us making resolutions to map out what we want to accomplish over the following 12 months.  Many of those resolutions involve some kind of health goal including diets, joining a gym, or sticking to a workout routine.  Some of these same principles of realizing health goals can be translated into tools for reaching savings goals for your hospital.

Get in (Financial) Shape by Shedding Unwanted Costs

The positive mindset that can often help one achieve their health and fitness goals can be applied to achieve the same success in your professional goals. Three steps that are tried and true in wellness and weight loss are surprisingly transferable as ways for hospitals to achieve their savings goals. These include:

Portion Control is a Good Place to Start

Sometimes we want to indulge just a little bit but end up eating a whole pint of ice cream even though we know it will hinder our health goals. Buying equipment can be subject to similar impulses. Hospitals often hinder their long-term budget and savings goals by overspending on things they may not need. One way to save money and help your long-term savings goals is to try and limit the size of the “portions” you buy.

For example, we recently worked with a hospital that was buying a new portable ultrasound and the clinicians wanted a bigger, more expensive system than they needed for the intended use.  The supply chain team helped identify a similar system that met their needs but not their indulgences at a substantially lower cost.  By reducing the “portion” of equipment being purchased, the hospital saved 60% without any meaningful sacrifices.

Consider buying a “smaller portion” (really a smaller cost) if you can get the same functionality you need for far less.

Don’t Shop Hungry to Get the Best Deals

Going to the grocery store on an empty stomach can be a disaster in terms of our health goals. We often buy more than we need, don’t stick to our shopping list, and buy the food that sounds good but jeopardizes our health goals. The same principle can be applied to hospitals when they are buying medical equipment.

When a budget finally gets approved to buy new equipment, hospitals often race to complete the purchase due to a fear of losing that budget if they don’t.  In the same way we may grab chips and cookies when shopping hungry, acting impulsively and rushing the equipment buying process after waiting a long time can cost big money.  Without taking the time to carefully plan and negotiate the best price and terms, it may be hard to get the best deal that would otherwise be possible if you are patient and take a more deliberate approach. It can feel like the race is on to get that shiny new piece of equipment, but in the process, you can do serious damage to your hospital’s savings goals.

It can feel like the race is on to get that shiny new piece of equipment, but in reality, all the shiny new features may not be needed. There also might be viable alternatives from other suppliers that can meet your needs without breaking the bank. Taking the time to step back and consider the details of the purchase in advance can help avoid buying more than you really need.

New Patterns + New Habits = New Results (and New Savings!)

Meeting our personal resolutions to get in shape often requires lifestyle changes and establishing new habits to advance your goals. The same can be true for hospitals looking to reduce costs.  Doing things the same way in the face of new financial challenges won’t get you to your goals.  Examples of new (or old ones that got shelved) habits that may help include:

  • Implement new, objective measures to help prioritize and allocate capital spending
  • Take time to assess cost trade-offs with staff and build consensus before buying
  • Revisit previous best practices for capital planning and benchmarking

Change can be hard, but all of these examples are ways to establish new patterns and new habits for making the best, most cost-effective spending decisions with budget resources that may be limited.

More than anything, the new year can often provide a fresh start to tackle any “bad habits” that may be standing in the way of your personal – and professional – health goals. As with our own personal New Year’s resolutions to get in shape, the most important thing is to take the first step, act on your goals, and realize the success that is possible. Go get ‘em!

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