Publication | ThinkSet, issue 5

Ways Hospitals Can Save Money—without Disrupting Communities

Peter Chadwick and Haywood Miller

Summer 2018

It’s hard to think of a business more difficult than running a hospital system. The pressure to comply with regulations while finding ways to save money is relentless, and for many independent hospital executives, each day is a fight for survival.

But while healthcare is highly complex, the business problem hospitals face is as simple as it gets: Costs run higher than revenue. Expenses have outpaced revenue for acute-care hospitals in every year but one since 2003, and rural America (where the situation is direst) has seen about 10 hospital closures per year this decade, according to the North Carolina Rural Health Research Program.

Against these headwinds, dedicated administrators are battling to not only keep critical health safety nets alive but also preserve what are often the largest employers in their communities. Their struggle was the focus of panel discussions we moderated in April at the BRG Healthcare Restructuring Conference (HRC) in New York City. Those discussions yielded insights on the path forward for some hospitals. And they underscored something we’ve learned through advising troubled hospital systems: Those who endeavor to rescue these vital institutions must embrace a pair of blunt realities.

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Peter Chadwick

Managing Director

Washington, DC

Haywood Miller

Managing Director

Washington, DC