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- aesculapiusvn@gmail.com