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ANALYSING THE BUSINESS OF CARE
Dr Olufemi Aina
Aesculapius Healthcare Consultants
Aesculapius Healthcare Consultants
• Competencies in Healthcare Project Management, Business Development, Idea Generation, Patient Safety and Healthcare Quality Management.
• Certified Project Managers and Accountants
• American Society of Quality (ASQ) Certified Six Sigma Black Belt Practitioners.
• Patient Safety Experts, Health Insurance Advisory
Hospital Business Environment
Government
Competitors
Employees
Community
Suppliers
MD
Clients
Financial Institutions
Complicating Nigerian Healthcare Business
• Regulated and Unregulated Competitors
• Unbridled Outsourcing
• Lack of Sustainable Investment
• Ego
• Lack of Leadership Skills
160 Million Nigerians
Best Operators, Worst System and Managers
Sometimes/Some Passionate Operators
Lack of Standards
Docile, Uninvolved, Happy Nigerians
Problems with Hospital Business
• Poor Documentation
• Poor Cash Management
• Failure to Understand the Business
• Lack of Investment Strategy
• Poor Risk Management
• Poor Planning
• Poor Banking
Lack of Financial Management
Analyzing and Reviewing the Financial Information of a Business
Measure the Current Health of the Business or Practice .
Make appropriate decisions to Improve Performance
Financial Management is a Tool to monitor Private Practice.
Lack of Financial Statements
Cash Flow Balance Sheet Income StatementShows When and How Much Money is coming into the Business
Provides a SNAPSHOT of the Business at a specific time
Records Financial Information OVER TIME and shows if a Business made Profit or Loss over Time
How Much Money is expected to flow out of the Business over a period of time
It’s a Picture of all the Assets and Liabilities of the Business
Businesses must have an adequate record of all expenses or costs, they incurred to deliver their Services
Shows if there is additional money for Investment
It is like an X-Ray Income Statement helps compare Information over Time
Shows how much can be used to replenish Stock
It shows what the Business OWES and what it OWNS
Planning for Improved Financial Health
Planning Process:• What does the Hospital want to
achieve?• What is the Vision of the Hospital
Practice?• How will the Hospital achieve its
Goals.
Goal Setting is crucial to Planning
SMART Goals
Goals can be Financial, Operational, Marketing, Product and Service Goals
Hospitals need to Understand themselves, their Practice and
their Environment.
Do this by conducting a SWOT Analysis:
• Strength• Weakness• Opportunities• Threats
Planning should answer these:
What, When, Where, Why, Who, How
Pricing of Services
Factors that Affect Price:• Demand• Competition• Location• Type of Customers• Quality• Exclusivity of
Products/Services• Costs of Offering your
Products/Service
Setting Prices
Selling Price of Services = Direct Costs + Proportion of Indirect Operating Costs
Indirect Overhead Costs:
Simple Allocation Method- using Mark-Up
Proportional Allocation Method
Expansion Strategies and Competition
Expansion Strategies should focus on the following:
• Products/Services• Pricing• Promotion• Place
Hospitals must think about: What Competitors are doing in
developing Strategies.
Differentiating Services from Competitors
Questions for Expansion• What do Clients want?
• What Price are they willing to pay?
• Who is the Competition?
• Estimate Number of Clients
• Determine Service Mix- combination of Products and Services to can package together
Hospitals Must AnalyzeBreakeven Analysis & Margin
• Breakeven Point is the Point which a Service will generate Profit or incur a Loss
• It’s a point at which all Expenses paid out for a Service equals all Income earned by the Service
• Breakeven Sales = Indirect Costs + Direct Costs
Contribution MarginSales- Direct Costs
It gives an idea of what each Sale contributes to covering the Indirect Costs and making a Profit
Desired Sales (Indirect Costs + Desired Profits)
Contribution Margin(%)
• AHIA provides Holistic Advisory Service for Hospitals.
• Focus of AHIA is more profitable Hospitals through the harnessing of its Manpower, ICT, Process Improvement and Waste Removal.
Consulting Services
Know the Hospital and its Challenges
Design more effective Engagement with Customers
Know the People, design Impactful Capacity Development , with Post Training Evaluation & Follow-up
Explore Opportunities to develop New Services
Review Cost Structure to identify and remove Wastage
Other Focus Areas of AHIA
• Quality Management Program (QMP)
• Appraisal Systems & accompanying Performance Indicators
• Patient Safety Strategies
• Superior Quality Service
Components of AHIA
Quality Management
& Process Improvement
How are you reducing Patient Waiting time- Clinics, Pharmacy, Laboratory and Front Desk?
How are you Improving Quality of Service in your Hospital from the Patient’s point of view?
Are Patients happy and satisfied with your hospital?
Are Hospital Resources being used judiciously?
Components of AHIA
Staff Training &
Development
Are your employees motivated at work?
Do your employees have enough skills and knowledge to satisfy your clients?
Are your staffs contributing to development of your business?
Do you trust your staff to be professional when interfacing with your customers, even in your absence?
Components of AHIA
Information Technology (IT)
Is Staff hiring based on Data driven fact or conjecture?
Is there Specialty service trend information for your hospital?
Can Hospitals immediately access Profit figures?
Can Hospitals instantly track income and cash outflows?
Do Hospitals have resource utilization projection for your Hospital?
Components of AHIA
Hospital Evaluation & Profitability
Is the Hospital paying for Underutilized Service?
Is the Hospital paying for equipment with no ROI?
What service/equipment should Hospitals focus on to generate more profit?
Is the Hospital wasting hard earned resources through other means?
Components of AHIA
Hospital Branding
Is the Hospital the first choice for people in its locality?
Are present Hospital customers bringing more customers to the hospital?
Does the Hospital use Social Media to engage Customers-Facebook, Twitter?
Do customers know what the Hospital stand for?
Does the general populace know about the products and services?
Strategy: DMAICDefine We identify the problems by engaging the Hospital management to define the problem
areas and meet with Hospital staff to understand its processes. We study the Hospital, its environment, its opportunities, its processes and sources of dissatisfaction within the Hospital.We utilize process tools like questionnaires, interviews, value stream analysis and flowchart to define the challenges with the Hospital.
Measure We measure the AS-IS metrics of the Hospital, with which we can make objective data driven decisions. We also help develop SHOULD-BE metrics for the Hospital processes, so we can measure the progress of our Improvement Project. Metrics determined must impact Business operations.
Analyse We identify the few causes of major dissatisfaction within the Hospital, explore the major drivers of the business, identify factors that impact the Quality of service delivery and other Resource waste in the Hospital
Improve We develop the SHOULD-BE processes for your Hospital and Strategies to bridge the AS-IS and SHOULD-BE processes that will revolutionize the Hospital into a World Class Hospital that is focused on satisfying present Customers and gaining new ones.
Control We help maintain the new culture and processes by ensuring Hospital staffs are able to function in the new state of the Hospital. We ensure lessons learned are documented to prevent reversal to previous stage. We also empower your employees to continue Process Improvement efforts in the Hospital long after Our engagement.
Contact Us
Phone- +234-8052064317 | +234-8023277559
Website- www.aesculapiusvn.com
Facebook: Aesculapius Healthcare Consultants
Twitter- @AesHealthCon
Email- [email protected]