Healthcare financial managers have felt steadily increasing pressures over the past decade to reduce costs.

A common quick fix for cost containment has been cutting “nonessential” staff and services.  Although this approach may reduce targeted operating budgets, some unintended consequences with significant and long-lasting implications have also occurred.

Typically, staff reductions do not eliminate work, but instead shift work to the remaining employees.  Suddenly, they have new responsibilities with less time to do what was previously considered priority work.  The result is a gradual shift in emphasis from patient care excellence to a daily scramble to get work done.  Getting through the day becomes a challenge, and it sometimes becomes easy to accept mediocre performance.  This stressful work environment is creating a cynical and skeptical workforce that is finding their careers less rewarding and is eroding the overall cultural commitment to excellence.

This situation inevitably results in unhappy employees who leave the organization, followed by expensive replacement costs.  So the challenge is to eliminate work rather than employees or to redefine job roles as processes are redesigned and work is reallocated to improve efficiency.

There is a systemic and permanent approach to cost reduction that doesn’t compromise the patient care mission or increase costs in other areas.  Redesigning processes to ensure alignment with the patient care mission is a critical responsibility of management.

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