Like any other business, healthcare facilities must be very strategic about their spending and finance management. Though facility managers may have to make certain decisions that are specific to the healthcare industry, improving their finances comes down to follow best business practices. To solidify a healthier financial future, healthcare facility managers should consider the following four strategies:
1. Better Prioritize Expenses
Every business must be able to prioritize the most important expenses and allow less-than essential costs to take the backseat. Healthcare facilities need to prioritize their most pressing expenses to better manage their finances and ensure their clients receive the highest quality of care. Through budgeting, healthcare facilities will be able to create a strict plan that will allow them to cover their essential expenses, avoid unnecessary expenditures, and eliminate debt.
When creating a budget, Rex Burgdorf advisor shares that healthcare facility managers must focus on avoiding overspending and make sure all bills and similar expenses are paid first. When prioritizing their expenses, healthcare facilities should always put the safety and health of clients first. As clients act as the primary source of income, it’s essential for healthcare facilities to consider them as they put together their budgets.
2. Understand Your Warranties
In the healthcare industry, it’s not surprising for key pieces of equipment to break down or malfunction. As this equipment is crucial to a healthcare facility’s daily operations, failing to cover the costs of repair may result in lost business. Before paying out-of-pocket for these items, healthcare facilities should put their warranties to good use.
Healthcare facilities would do well to track every warranty for each piece of equipment to make sure that any repairs or replacements are covered under the warranty. This way, healthcare facilities will be able to mitigate costs and divert the majority of their spending elsewhere.
3. Establish Agreements with Vendors
Part of making healthy financial decisions in the healthcare industry requires facility managers to employ expert price negotiation with their vendors. As healthcare facilities regularly make large scale purchases from a wide variety of vendors, it makes sense to build relationships and establish pricing agreements with each vendor. These pricing agreements allow healthcare facilities to save money on their purchases depending on the total cost, volume, or market share. With savvy negotiating, healthcare facilities will be able to reduce the TCO or total cost of ownership of their equipment.
4. Carefully Analyze Expenditures
In the world of healthcare, Rex Burgdorf advisor shares that facility managers must get approval for each expense they make. During the process of setting their budgets, healthcare facility managers should spend time thoughtfully crafting the budget prior to asking for approval. By carefully analyzing every expense, healthcare facilities will be better able to better understand the TCO and ROI for each purchase.
This type of careful research allows healthcare facilities to better understand where and how they can improve their finances. This strategic budgeting will make any day-to-day operations smoother and improve a facility’s future financial success.
Healthcare facility managers must be on top of their finances if they hope to keep their business out of debt. These four suggestions are basic guidelines that any healthcare facility manager can use to improve their facility’s finances.