You Need to Know the Six Ways Money Gets into Your Healthcare System

Want to be a successful Marketer in a Health System or hospital? Then you have to understand how a Health System makes money. Only then you will understand how YOU can play a part in making money for the system.

Here is a simplified explanation of the six ways money gets into your healthcare system:

#1 Legislative Process and Public Policy

Did you know that, on the average, 76% of all hospital revenue comes from the government is some way. More than just medicare and medicaid, your State legislature controls many policies that affect revenue. And as everyone knows, it is only going to become more influential in the coming years.

#2 Finance

Finance is managing the bond rating, maximizing the income from investments and getting the best from all the revenue cycle issues.

#3 Business Development

Acquisitions of hospitals and practices, Joint Ventures with docs, starting up new programs and service lines, and any other deals to better position the hospitals to succeed is what Business Development people do.

#4 Operational Excellence

Figuring out how to give the best possible care with the most cost efficiency. Interesting: innovation in cost savings can lead to innovation in clinical care. The key is the word “innovation”.

#5 Philanthropy

Your hospital foundation makes many capital improvements and services possible that a just couldn’t happen any other way.

#6 Marketing

This is you. If all you are doing is PR and Community Relations, your department will be considered needless overhead and will soon be slashed (if they aren’t already). You must drive measurable contribution margin, or profit, into the system.

You must drive Patient Volume at the intersection of capacity AND profitability- that’s the sweet spot. I call it driving “the Right Patient with the Right Payer to the Right Service Line.



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