Strategies to Improve Hospital Performance: Enhancing Access, Efficiency, and Outcomes

In a healthcare landscape characterized by increasing complexity and elevated patient demands, hospitals are confronted with significant pressure to enhance their operational performance. The growing focus on reimbursement cuts, cost reduction, and positive patient outcomes requires a multifaceted strategy. Five critical levers for improving operating margins stand out: 1) enhancing access to care, 2) increasing 340B prescription fill rates, 3) optimizing revenue cycle yield, 4) boosting workforce productivity, and 5) implementing non-labor zero-base budgeting. Through the implementation of these targeted strategies, hospitals can realize significant performance improvements, thereby strengthening operating margins and ensuring long-term organizational sustainability.

1. Enhancing Access to Care

The delays in care resulting from the pandemic have led to a persistent backlog of medical services, presenting an ongoing access-to-care crisis. Unlike many consumer goods and services available on demand, timely access to healthcare remains a significant concern within the industry.

Expanding Outpatient Services

Hospitals can improve access to clinics by extending operating hours, implementing telehealth options, and streamlining referral procedures to better accommodate patient needs.

• Assess Community Needs: Conduct regular community health needs assessments to identify gaps in outpatient services, including specialty clinics, primary care, diagnostics, and rehabilitation.

• Extend Clinic Hours and Telehealth: Expand operational hours and offer telemedicine appointments to accommodate patients' diverse schedules, reduce barriers to care, and minimize no-show rates.

• Streamline Referral Processes: Collaborate with primary care providers and referring physicians to create efficient and transparent referral pathways. Utilize electronic referral systems to speed up patient transitions and provide clear communication to patients about the next steps.

• Increasing Surgical Care Access

• To further enhance access to surgical care, hospitals can leverage real-time data analytics and foster seamless collaboration across departments. This integrated approach streamlines workflows, maximizes operating room efficiency, and reduces unnecessary delays and resource waste.

• Optimize Surgical Scheduling: Implement advanced scheduling tools and predictive analytics to allocate operating room time efficiently, decrease wait times, and prioritize urgent or high-value cases.

• Preoperative Coordination: Establish robust pre-admission testing and patient education programs to ensure patients are medically optimized for surgery, reducing cancellations and day-of-surgery delays.

• Ambulatory Surgery Expansion: Invest in ambulatory surgery centers (ASCs) to handle appropriate low-risk elective procedures, offloading the main hospital, increasing throughput, and improving patient satisfaction.

• Address Social Determinants: Employ care coordinators to help patients overcome transportation, financial, or language barriers that impede timely access to surgical care.

• Monitoring and Continuous Improvement

• Track Key Metrics: Clinics - monitor appointment fill rates, average wait times, clinic cancellation rates, exam room utilization, visits per day, work hours per visit, operating cost per square foot, gross revenue per square foot, and patient satisfaction scores. Operating rooms - monitor surgical cancellation rates, cases per operating room, worked hours per case, cost per case, cases per day, gross revenue per operating room, and patient satisfaction scores. Use this data to identify bottlenecks and opportunities for workflow redesign.

• Patient Feedback Loops: Implement patient advisory councils and real-time feedback mechanisms to ensure care models remain patient-centered.

  
  

2. Improving 340B Prescription Fill Rates

The 340B Drug Pricing Program enables eligible hospitals to purchase outpatient drugs at significantly discounted prices. Improving fill rates can directly enhance patient access to necessary medications and increase hospital operating margins.

Patient Identification and Eligibility

• Leverage EHR Integration: Integrate electronic health record (EHR) systems with 340B software to flag eligible encounters and prescriptions in real time, reducing missed opportunities.

• Provider Education: Regularly train clinicians and pharmacy staff on 340B eligibility criteria, ensuring consistent patient identification and documentation.

• Improve Pharmacy Relationships

• Expand Contract Pharmacy Networks: Partner with local pharmacies and retail chains to increase the number of access points for patients, making it easier for them to fill 340B prescriptions.

• On-site Pharmacy Optimization: Invest in efficient, patient-friendly on-site pharmacies with extended hours and convenient locations within the hospital system.

• Patient Support and Adherence

• Medication Counseling: Offer pharmacist-led counseling to ensure patients understand the importance of their medication and how to adhere to their therapy.

• Address Barriers to Adherence: Provide financial assistance, transportation support, and mail-order options for patients facing obstacles to prescription pickup.

• Data Analytics and Performance Monitoring

• Measure Fill Rates: Track and analyze fill rate data, segmented by department, provider, or pharmacy. Target 50% - 75% capture rates. Identify trends and intervene where necessary.

• Quality Assurance Programs: Conduct regular program audits to ensure compliance and capture all eligible fills.

3. Optimizing Revenue Cycle Yield

A well-managed revenue cycle is critical to financial sustainability. Improving yield means ensuring hospitals are paid accurately and promptly for services delivered.

Enhance Scheduling and Patient Registration

• Upfront Validation: Use automated tools at the point of initial intake to verify insurance eligibility, benefits, and copayments, reducing denials and rework.

• Financial Counseling: Employ financial counselors to assist patients in securing insurance, understanding their coverage, providing price transparency, and establishing payment arrangements.

• Accurate Coding and Documentation

• Clinical Documentation Improvement (CDI): Train clinicians and employ CDI education specialists to ensure that patient records accurately reflect the complexity and severity of illness, supporting correct coding and maximum reimbursement.

• Coding Audits: Conduct regular internal and external coding audits to identify missed opportunities and prevent compliance issues.

• Claims Management and Denial Prevention

• Automated Claims Scrubbing: Use advanced software to check claims for errors before submission, ensuring clean claims and reducing payer rejections.

• Denial Analytics: Target 5% initial denial rate, and the final denial should consist mainly of fatal denials. Monitor denial trends and address root causes through targeted staff education and process changes.

• Optimize Collections

• Early Patient Engagement: Collect copays, deductibles, and outstanding balances at the time of service whenever possible.

• Flexible Payment Plans: Offer patients tailored payment arrangements to minimize bad debt and improve satisfaction.

• Revenue Cycle KPIs: Track key performance indicators like days in accounts receivable, clean claims rates, coding backlogs, denial rates, cost to collect, bad debt rate, POS collection rate, payment accuracy rate, first pass yield, and net collection rate to benchmark progress and drive accountability.

4. Boosting Workforce Productivity

Workforce productivity underpins all aspects of hospital performance. Assign working hours standards to both variable and fixed departments based on units of service metrics, ensuring an efficient allocation of staffing resources that aligns with operational demand.  Apply benchmarks thoughtfully, using them primarily as a measurement to ensure equitable staffing standards across all departments. Each role within the organization plays a vital and indispensable part in fostering a high-performing workforce.

Workforce Planning and Optimization

• Right-Sizing Staff: Match staffing levels to patient demand using predictive analytics, ensuring adequate coverage without overstaffing.

• Flexible Scheduling: Implement flexible self-scheduling systems to maximize staff satisfaction and reduce absenteeism and turnover.

• Central Staffing: Consider establishing a centralized staffing department to manage staffing models based on demand.

• Productivity Standards: Establish clear productivity benchmarks, such as creating an option to reach the 50th percentile or exceeding last year's performance by at least 2% to drive continuous improvement and operational excellence.

• Training, Engagement, and Culture

• Ongoing Education: Provide continual access to clinical training, certifications, and professional development opportunities, ensuring staff are equipped to work at the top of their license.

• Recognition Programs: Acknowledge achievements and celebrate successes to create a culture of excellence and shared purpose.

• Process Improvement and Technology Adoption

• Lean Methodologies: Deploy Lean and Six Sigma principles to identify waste, streamline workflows, and increase value-added time for direct patient care.

• Technology Integration: Implement tools such as electronic health records, digital communication platforms, AI-driven scheduling software, and clinical decision support systems to reduce manual tasks and improve care coordination.

• Wellbeing and Retention

• Support Employee Wellbeing: Invest in mental health resources, flexible benefits, and work-life balance initiatives to reduce burnout and foster long-term staff retention.

• Engagement Surveys: Regularly gauge staff engagement and address concerns proactively, cultivating a responsive and supportive work environment.

5. Implementing Non-Labor Zero-Based Budgeting

Rolling forward budgets based on historical trends incorporate one-time, non-recurring transactions into expense classifications.  This approach often results in unintended budget inflation and the allocation of resources to initiatives that may not be strategically aligned with organizational priorities. 

• Adopt a zero-based budgeting approach for all non-labor expense categories, requiring hospital departments to justify each expense from the ground up rather than relying on historical spending patterns.

• Conduct regular reviews of contracts, supply chain purchases, and discretionary spending to identify opportunities for cost reduction and efficiency gains.

• Encourage cross-functional collaboration to uncover redundant expenses and reallocate funds to high-priority investments that directly support patient care and strategic objectives.

Conclusion

The path to improved hospital performance is rooted in a holistic approach that spans patient access, operational efficiency, financial stewardship, and workforce empowerment. By focusing on these five pillars—enhancing access to care, improving 340B prescription fill rates, optimizing revenue cycle, boosting workforce productivity, and implementing non-labor zero-based budgeting—hospitals can achieve sustainable financial success. Such strategies not only strengthen financial results but, more importantly, drive better patient outcomes and satisfaction, positioning the organization to thrive in the rapidly evolving healthcare landscape.