For hospitals across the country, budgets and financial plans have been complicated by COVID-19. These hospitals are facing a hit to revenue, increased expenses and even liquidity concerns, both in and outside of COVID-19 hot spots.
To be successful in normal times, revenue recovery programs must do much more than simply increase OR hours to account for lost volume. Having worked with over forty-five organizations to build out their continuous cost improvement programs, we at Strata have identified four key components to a successful recovery program.
But to navigate the aftermath of COVID-19, these efforts will need to be amplified. Even under ordinary conditions, establishing a cost savings program with engagement from the entire organization can be incredibly difficult. Many of the necessary components to your success will be compromised by what was a taxing crisis. Front line and financial team leaders are exhausted by the efforts of the last few months. Consider this when following these four steps and planning for the months ahead.
Step 1: Establish leadership and owners
Begin thinking through who will become the leaders and owners of your cost recovery program and their projects. This will set the tone and create a level of urgency. With sponsorship from the CFO and COO, as well as CMO and CNO leadership, you will be able to remove barriers and avoid hesitation or indecision.
Your team will also need to identify a dedicated, full-time central point of coordination for program leadership and management. The strongest candidates for this role will likely be the same people you have depended on throughout the crisis. They are also likely exhausted. You will want to select another strong leader for recovery management, one with an executive presence and strong analytical, facilitation and communication skills, with demonstrated experience in change leadership.
Step 2: Set the target
Set a financial target and establish a core graphic or visual to help show the reason for the established recovery target, like a margin gap. Explain the target to create organizational buy-in at all levels.
Arbitrary targets that don’t resonate with staff won’t gain their engagement and will result in minimal commitment to your program, so it’s important that you are able to effectively communicate. Consider alternative communications to help different audiences understand the importance of the project, including messages such as “we need to reduce the cost per case,” “we need to drive margin,” etc.
Step 3: Brand the program
If you want the program to be memorable, you need to name and brand it. Be creative and have fun with it. Effective branding helps with communication and creates buy-in and secure engagement. It also aids in program logistics, like meeting invites. An example could be an acronym you’ve created or something like “Financial Stewardship,” “MY33,” “Thrive Together,” etc.
Step 4: Establish guiding principles
You will need to create guiding principles, the organization’s “true north” for any financial improvement opportunities. Keep these principles front and center, posted on the walls inside your organization where staff see it, both during brainstorming and planning. Be sure to include the goal time frame, such as “something we can activate within three to six months.”
At the end of the day, your recovery program should improve operations, quality and staff satisfaction, not just grow your margin. Maintain the same urgency and energy that your teams brought to COVID-19 preparation to drive engagement and success.