Leading Through a Recession
With few exceptions, healthcare organizations have seen a downturn, due to the recession, in their inpatient census, outpatient visits and corresponding revenues. This has led to even more staff layoffs and ratcheting down of ALL expenses. This recession is a true test in leadership to keep your hospital, system or IDN viable during these perilous times.
As a supply chain leader it’s your job to have a clear vision, credibility and confidence throughout this downturn and to continue to achieve double-digit savings to help fill your organization’s revenue gaps.
Leading through a recession starts with having a plan to cope with the downturn, even with a slashed supply chain budget. I hear some hospitals’ CEOs are asking their MMs to summarily hack off 10% of their supply budget, but that’s not a plan. That’s an act of desperation and extreme anxiety that will too often backfire when the dust settles and everyone has time to take a deep breath!
That’s why a PLAN by definition is a carefully and thoughtfully conceived process of setting goals, developing strategies and outlining tasks and then setting schedules to meet those stated goals to avoid any and all pitfalls. I would recommend that your recession plan should have these three critical elements:
- Benchmarking of all areas of your supply chain operations to determine how much money is still available to be saved at your healthcare organization. The results of this exercise will then become your actual, realistic and obtainable savings goal for your plan, not some arbitrary number picked out of the air by others.
- Develop strategies and tactics to attack each of the areas where you have identified savings opportunities. For example, if your GPO compliance is only 82% and your benchmark indicates you should be at 93% compliance, then develop a tactic to greatly improve this metric.
- Establish a list of tasks, timelines and a person who is responsible for making the identified savings you have uncovered a reality. We like to use a 90-day timeline for all of our projects, unless there is an extraordinary circumstance that prohibits a task from being achieved in this timeframe. In this case, we give an extension on the project for 30, 60 or 90 days.
As consultants, we do this planning exercise that I have just outlined for you, dozens of times a year for our clients, just the way I explained it to you. There is no magic in finding savings, except hard work that ultimately leads to big implemented savings for you.
In this time of stress, anxiety and upheaval don’t take any short cuts in your leadership. This might create even more problems for you down the road or worsen your situation through poor or non-existent planning. Keep on course, on budget and on time with all of your planning to ease your way out of this recession and ultimate recovery!
Filed Under: Healthcare Supply Chain • Hospital Supply Benchmarking • savingsblog
