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5 ways to Become a Lean, Mean, Budget Machine

January 26, 2009
by Pete Rivera
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The top ways to keep your organization in the black
  1. Take stock of what you have. As in any survival situation, you start by analyzing what tools you have available to make it through the next few months. You can check strengths and weaknesses, find out what systems are reaching its life cycle replacement, and what partnering opportunities exists to develop and SLA or an ASP solution. What makes sense to do yourself and what needs to be farmed out?
     
  2. Realize that you can not continue the Status Quo. Thinking that you can continue to operate the same way you always have, is a sure way to run aground. Making changes to business processes is often like parking a supertanker; It’s slow and you can’t do it alone.
     
  3. Cut meetings, no seriously, cut meetings! Try this at you next “Standing Meeting.” Count the attendees, guess each person’s salary, add all the salaries and divide by the amount of time the meeting will take. That is your opportunity cost. You will not save salary by not having the meeting, but you missed the opportunity to invest that salary in a more productive manner. Hint: If it is a standing meeting, its just there to provide a status check for one or two people.
     
  4. Payment Variance: move it up your priority list. Chasing variances or write off policies have an immediate ROI. If you have a basic information system that can not balance receivables against payor contracts, then you are giving your services away. Healthcare’s law of diminishing returns state: The larger the institution, the more likely to write off a debt. If you have to ask yourself if it’s worth chasing down the debt, then you must not be having budget problems. Leverage technology to chase the write off; don’t throw more expensive people resources at it.
     
  5. Analyze your system maintenance costs. Figure out what systems should finally be sunset, what are you paying maintenance on, and is it yielding an ROI. You may have to do this by module, by interface and vendor. Look at how you’re using a managed care application/module for instance, and analyze against how many contracts it is maintaining. Does it make sense to continue to use it or is there a lower tech solution? If it has been a long time since you looked at your maintenance contracts, odds are good that you will find some opportunities there. Are you holding off on sunsetting a system because there are one or two people that still depend on it? Then it's time to build a business case for pulling the plug.
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Comments

Pete,
This is a great - and very timely - post. Recently I've been researching performance improvement methodologies, and it seems like in this economy, taking small steps to trim the fat and improve efficiency is a no-brainer.
I really like the point you made about meetings. My husband works in finance, and there's a running joke that the number one goal accomplished at meetings is deciding when to hold the next one. Seems like a big waste of time to me, and an easy problem to fix.

I think one way to get attention would be to post the cost of each meeting on the agenda.

agreed. It's about balance.

I especially liked: "Making changes to business processes is often like parking a supertanker It's slow and you can't do it alone."

I'd add to that "and when it needs to be done, it needs to be done, carefully and done well."

It reminded me of a joke that university academics tell:
"Changing the curriculum is like moving a cemetery." I don't like the allusion, but it's an important part of the point.

Joe. While I agree with you that "it needs to be done well," one should not be afraid of getting it less than perfect. I am more and more convinced of "giving it a shot," after some research and thinking. I think Colin Powell said commanders need to be able to make decisions with 40 percent of the information they might want. Also, it's impossible to discern every action's permutations. I think that if it's broken, fix it. Perhaps one could think of my point in this way. "Cut the darn wood already, we'll sand the edges later."

A friend of mine, who works at a non-profit, says the amount of meetings is ridiculous. Over-meeting is definitely a symptom of an inefficient workplace.

Anthony, I meant "well" in the sense of not causing damage when you pull into the parking spot not "well" in terms of being perfectly placed in that spot. Per Pete's Supertanker advise, there's a limit to how fast it can be done safely. I agree with the spirit of your comment: If you take more than 15 to 20 seconds parking a car, you're not doing it well!

Pete Rivera

Director Informatics, Hayes Management Consulting

Pete Rivera

@Gator_Pete

www.Hayesmanagement.com

 

 

 

 

 

 

 

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