Labor costs are the single largest expense item for most hospitals, often exceeding 60 percent of net patient revenue. Organizations need to manage their labor spend carefully to curb costs enough to keep pace with revenues. Those that pursue a data-informed, forward-thinking strategy can slow the growth of labor expenses today while positioning themselves to succeed in a future of continued revenue decline and increased workforce shortages.
Healthcare organizations often seek to lower costs by outsourcing some labor force areas. And yet, like most cost-savings strategies, outsourcing carries risks for an organization and isn’t “one size fits all.” Systems that succeed with outsourcing pursue a thoughtful, data-informed approach—one that promises not only lower costs but increased value to their organization and a positive experience for their team members. This way of outsourcing is called smartsourcing.
Here is how the most successful organizations are tackling these cost-related problems.
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