Your doing cost cutting at your health system right? You need to hear Michael Dowling's wisdom on the topic.
Today in health it five ground rules for cost-cutting this from Michael Dowling. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week health, a set of channels dedicated to keeping health it staff current and engaged. We were to thank our show sponsor. So we're investing in developing the next generation of health leaders, Gordian dynamics, Quill health Taos site nuance, Canon medical.
And current health, check them out at this week. health.com/today. All right. So we started a series and the series is looking at how we're going to apply some of the, I believe statements to the, , to the new year, how we're going to. , realize some of the cost savings, reduce burnout, et cetera, et cetera.
Across the board. , I'm going to take a one day break from that and just share this news story. And it's a, from Becker's Michael Dowling is president and CEO of Northwell health. And he had this to share about six ground rules for cost-cutting. , difficult year for a hospital health system. Finances brought it.
, renewed attention to expenditure scrutinizing costs. Is a job that should be done with the same amount of precision. And Cara, as you as your top surgeons in the, or cause one mistaken move can cause several complications and long-term damage. Anytime I'm faced with this issue of reviewing cost reduction strategies. I like to keep a few principles in mind. And so here are his six principles. And I like him, which is why I'm sharing them. And I know you're talking about cost reductions right now, so I thought I'd share them as well.
, nber one, be extremely careful about negatively impacting direct patient care at the bedside. Although nothing should be completely off the table when scrutinizing costs. This area requires careful analysis, snap short-term decisions. Can cause serious long-term problems. It may be necessary to change the care model, but that cannot be done quickly and definitely not in the midst of a hectic annual budget development process. All right. So I agree with that. I agree with that wholeheartedly. I'm going to add to it, but I agree.
I agree with it. Be extremely careful about negatively impacting direct patient care. At the bedside. And then I would say a lot of burnout is being caused because of how we deliver care and we need to reimagine how we deliver care and bring technology into that equation. And I, by the way, I do agree that it can't be done quickly. And so if you're doing cost cutting today,
, any technology project you're going to do is going to be realized in two years. Or, , 18 months from now, it's not going to be realized. Today. So again, I would say rethink how we're doing care at the bedside, but be extremely careful understand that it's, long-term not, short-term thinking.
A nber to scrutinize overall management structures and efficiency processes. This is the group that's going to get hammered across the board in healthcare. And it's the administrative layer. And especially the management layer. If you're a manager who manages one person, you are in jeopardy. And it's funny when I say that people just sort of laugh, like who would have a manager managing one person and.
I would have to look at our work chart every year. And invariably there, somehow it popped up and there was a manager managing one person. All right. So all of that kind of stuff is just silliness. A manager should manage at least. I don't know, five or six people at a minim. , and even that is questionable and probably can't manage too many, but the five or six nber is probably the base. Anyway, he goes on to say caution about direct patient care does not mean a hesitancy about analyzing operational processes.
Do we have layers of management that previously made sense, but not today. And probably didn't make sense before, by the way. Are we imposing rules and metrics that are unproductive. You see, the problem is we solved a lot of problems in healthcare with people. We had the money. We had the ability to raise rates. And so we brought people in and we solve problems with people. Inefficiently, highly inefficiently.
And so now's the time to look at those things and to scrutinize the overall management structure. And the efficiency of the process. Nber three, be careful to protect the organization's social mission. Managing an organization with a single primary goal, such as margin or profit is relatively easy.
, doing it in healthcare with multiple obligations is much more difficult. We invest in services and programs to improve the overall health of the community efforts to solve food insecurity programs, to address substance abuse and mental health support for students to pursue their educational goals, et cetera.
All of these expenditures, not revenue drivers. Some are partly reimbursed by the government, but never enough to cover the costs. These are endeavors. We must not retreat from. And I love that word must not retreat from there's a handful of things we should not retreat from. One is healthcare needs to be done differently and we should not retreat from innovation.
Now we might pull back some of the revenue from that, but we should not retreat from our commitment to innovation, innovation, innovation, around all of these things, including our mission, how we deliver our mission. Is there a better way to deliver on our mission? Is there a better way to address substance abuse and mental health and educational goals? Because we know education is such a big part of overall health.
We should not back down. We should not retreat. I love that word retreat from innovation. We should not retreat from our social mission. , nber four, by the way, I'd love the, this is a great list. , and it's why I'm sharing it with you just in case you didn't have time to read it. And now you can listen to this.
Nber four sees opportunities for longterm strategy in the process of developing the budget and reviewing expenditures opportunities for future. Strategy and operational transformation automatically arise. Take advantage of them core issues that need to be further addressed, arise, such as how to optimize the role of nurse practitioners, how to develop robust patient navigation systems and how to improve food service.
Hmm. Interesting. , how do we improve collaboration between various specialty care disciplines? And how to enhance customer service follow up on these issues, help in the development of the future strategy. So sees opportunities for longterm strategy. , things are going to present themselves right? As you explore different ways of doing things, , I, you know, I ask a simple question of my team. Is there anything we can get rid of and stop doing? And it's amazing. Every time I asked the question, didn't matter if I was in healthcare or if I'm now running this week, health things end up on that list.
Hey, we can stop doing this. I don't, I'm not sure why we do this and you sit there and go. I'm not sure why we do it either. And there's a handful of things you should just stop doing. There's also a handful of things that as you look at it, you go, , if we did this differently, It would really have an impact.
And, , seize those opportunities as you are, as you are exploring. , new ways of doing things. They, these things are gonna pop up. Nber five, realize that you will never cut yourself to success. Biggest mistake people make, oh, we're going to weather this storm. We're going to cut back weather the storm and come out of it.
, unless it's an inflection point. If it's an inflection point. You're going to keep cutting and cutting and cutting, and you're never going to come out. It's a very dangerous spiral that we can get into. I will tell you what his words are right now. , the leader's job is a mix of being diligent about expense management, process improvement and operational efficiency while simultaneously maximizing revenue.
Where do I grow? And what do I expand? How do I curtail market share loss in current businesses? How do I balance. Commercial business growth with growth in government business. What new business should I develop? Should I partner with new entrance in the marketplace? Improving efficiency and productivity.
Is Sue superlative, but so is profitable revenue growth. It's the only way to sustain the necessary margin. And maintain a commitment to our social mission. So realize that you will never cut yourself to success. It's a balance. You are cutting. In order to provide runway and, and, , increase the, the places that you can invest, the revenue and the profit.
In ways that are much more efficient, much more return on that. , well, again, Maintaining the mission, maintaining the focus and all those things. All right. Nber six. Remember your role as leader in times of difficulty and constriction, the goal of leadership is to manage a crisis with an attitude of calmness and optimism.
And you should be calm and you should be optimistic. There is so much on the horizon. That if you just listen to some of these startups and you go to some of these places, now, some of these startups will make it. It doesn't mean their technology. Wasn't good. And I think what we're going to see is we're going to see that technology gets snapped up by others who have the wherewithal to bring it to market and make it work.
And I think, , a downturn in the economy has great opportunity for those who remain calm. Who can see through what's going on? And again, utilize the, , the crisis at hand to change things. Right. So Kotter's change model. , one of the things is you have to have a burning bridge. , you have to create that sense of urgency. Well, nothing creates a sense of urgency. Like, Hey, we're not making money.
And so you can skip that step and go straight to the next thing, which is, Hey, the model seems to be changing or the model is broken. What can we do differently? And you know what? People will engage in that conversation. So I think we're in a transitional period in healthcare. And I'm not sure we're going to go back to the status quo. I think we're going to see a new norm.
, be established over the next 18 to 24 months. I'm not sure what that looks like. Be honest with you. I'm going to keep reading and listening to thought leaders and see if I can ascertain the direction this is going to go. But again, these are great to have in your mind. As you were talking through cost reductions at your house with some be extremely careful about negatively impacting direct patient care at the bedside scrutinize overall management structures and efficiency process.
Nber three, be careful to protect the organization. Social mission. Nber four, seize opportunities for longterm strategy. Nber five. I realize that you will never cut yourself to success. And nber six, remember your role as a leader in times of difficulty and constriction. So there you have it. That's all for today. If you know someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week out.
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