The decision to enter the Healthcare Industry isn’t one that’s made lightly -- the shifts are long, the demands are high, and the sacrifices are many. So, when someone chooses a career in healthcare, chances are, it isn’t because they’re fascinated with profit margins or have a deep passion for reducing operating costs. More than likely, it’s because they want to change the world by saving one life at a time. But, the truth is, these are not mutually exclusive ideas.
In order for a hospital to provide the highest quality health care, with the best staff and technology available, they must also be profitable. On the other hand, profits mean nothing without results. The key to achieving both lies in creating a Culture of Engagement.We have written extensively on the benefits of employee engagement from the patient’s perspective – reduced mortality rates, shortened hospital stays, better service, etc. – but today’s article will focus on the huge role employee engagement plays in profitability. To do this, we’ll need to take a look at two core areas essential to increasing profits -- revenue and costs.
Increasing Revenue
One of the most effective ways to increase revenue at a healthcare provider is to focus on patient experience/satisfaction by creating a Culture of Engagement. When your team is engaged, patient satisfaction greatly increases, and so do your profits. A recent article by Harvard Business Review suggests companies with a high level of engagement are likely to experience financial margins 5% higher than those with lower engagement.
That’s not the only favorable outcome they experience:
- Hospital-Acquired Conditions (HACs) reduce by 13.3% and readmissions occurring within 30 days see a decrease of 3.22%
- Patient safety increases by 15% compared to organizations with low levels of employee engagement
- Quality of health care increases by 95%
These factors significantly improve patient satisfaction/experience and grow profits via increased patient loyalty, increased referrals, higher average HCAHPS, and many more factors. But, for the purpose of this article, let’s take a look at just those few:
- Patient loyalty increases significantly, and as a result, in-patient referrals skyrocket in excess of 50%
- HCAHPS see an increase of nearly 97%
Reducing Costs
Profits increase just as much from reducing costs as they do from increasing revenue. And, when an organization has fostered a Culture of Engagement, they experience reduced costs across the board. This is exceptionally important in the Healthcare industry, where mistakes can be quite costly – both in lives and dollars.
In 2015 alone, the federal government cut $371 million worth of Medicare payments to 721 hospitals, due to their high rates of HACs. That same year, they also fined 2,610 hospitals for having excessive readmission rates. While turnover is costly for any industry, it’s especially damning for healthcare providers. In the nursing department alone, turnover can cost a hospital 5% of its annual budget.
Those figures can be – and are – overwhelming for healthcare providers. Luckily, employee engagement can drastically reduce these costs (among many others):
- Worker's Compensation claims can reduce by as much as 61%
- Safety accidents reduce by as much as 70%, while absenteeism shrinks by around 41%
- Medical errors, which are believed to be the number three cause of death in the United States, drop by nearly 50%
- Turnover Rates decrease by over 31%
Start Increasing Your Profitability Today
From reduced costs to increased revenues, the link between employee engagement and profitability within the healthcare industry couldn’t be clearer. This is one of the main reasons we’ve been approached by so many healthcare providers throughout our 80-year history in the engagement industry. We’ve spent decades working with our amazing healthcare clients -- crafting custom tailored solutions that are proven to increase quality, engage their team, and grow their profits!
For more information about the many ways employee engagement can help your organization, you can check out our complimentary whitepaper, “Employee Engagement Matters (a lot!) in Healthcare.” In addition to being free, the resource provides a great starting point for initiating dialogue about the importance of employee engagement at your company.
Already aware of how much employee engagement can help your company? Feel free to contact us with any questions you may have. Our team of experts are here to help you engage your team, reduce your costs, and increase your profits, all while saving more lives than you ever thought possible.
C.A. Short Company partners with companies to manage, drive and facilitate increased employee engagement to increase financial performance, productivity, quality, and core performance outcomes. Our process and research-based platform enables executives and managers to engage their teams to increase the bottom line, motivate staff, and incentivize positive behavior. To Request a Complimentary Consultation, click here.
