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Margin Improvement: Optimizing Financial Performance

Ensuring the long-term financial viability of a health system requires constant attention to the operating statement. This involves assessing the current state of your healthcare organization and critically comparing the current condition to industry and/or internal benchmark standards. Ultimately, this assessment assists management implement an ongoing margin improvement process to increase the likelihood of achieving the system’s financial plans.

How does Margin Improvement Impact Revenue?

Revenue enhancement involves identifying and implementing strategies to increase the hospital’s top line. This could include expanding services, negotiating better reimbursement rates with insurers, managing physician referral patterns and evaluating different reimbursement strategies.

How does Margin Improvement Impact Expenses?

Expense management, on the other hand, involves identifying and implementing cost-saving measures to reduce expenses without compromising patient care. This could include negotiating better prices for supplies and services, improving operational efficiency, reducing the reliance on agency staffing and evaluating purchased services. Effective expense management can result in significant cost savings, which can be reinvested into the hospital to improve patient care, acquire new equipment or facilities, or support strategic investments.

Contact Blue about Margin Improvement Opportunities

Both revenue enhancement and expense management are critical components of margin improvement in a hospital setting. By adopting a comprehensive approach to managing revenue and expenses, hospitals can ensure their long-term financial sustainability.

Blue & Co. has performed margin improvement engagements for many of our healthcare clients. Our firm is well positioned to help your organization optimize your financial and operational performance. To learn more about how we can help, please reach out to your local Blue & Co. Advisor, Tony Javorka or Larry King using the contact information below.

Larry King, CPA, FHFMA, Director-in-Charge

Tony Javorka, Director

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