In the July/August 1990 issue of FAHS Review, a feature article focused on the new strategies needed for managing hospitals in the '90s. Suffering from the combined punch of restricted utilization and reduced reimbursements, hospitals can't help but feel the financial crunch created by these predicaments. Strategies for economic survival have included trying to maximize revenues by either increasing volume or reducing unnecessary expenses. But increasing price through rate increases or cost-shifting has limited potential in today's medical market. Increasing volume via participation in managed care programs is a risky maneuver at best, based on the extent of the volume-discount trade-off. Limiting expenses traditionally has been accomplished by following sound business cost-containment techniques, maximizing FTEs and productivity, improving staffing patterns at all levels of the organization, and eliminating non-profitable services. But there is one additional item that should be taken into consideration--the need to reduce expenses by improving efficiency in medical operations.
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