TechNation | Tech Knowledge: The Dynamics of Cost Reduction

By George Hampton

At the risk of sounding like “Captain Obvious,” the health care industry as a whole is struggling financially. Everyone is being called to task for savings and clinical technology programs are certainly no exception. Perhaps your program has flown under the “cost cutting” radar in the past. I know that many organizations don’t have a real grasp on what they are spending on clinical technology, but many have an impression that whatever they are spending is probably too much. This impression, whether real or imagined, leaves the director of the Clinical Technology Program in a challenging position. If you are exercising cost saving measures, are you able to show the results, or if you’re not actively cutting expenses, where do you start?  The situation certainly sounds bleak, however there can be ways to make it a positive. Let’s discuss some of the variables of cost reduction in the hope that we can construct a clear vision that will help you get started or validate your current efforts.

The Variables

Obviously, there is no “model” program that would necessarily fit every application. A CT program’s expenses can be simplified into four basic categories: Contracts, Parts, Outside Labor, and Salaries (I know, more Captain Obvious stuff). This is management 101 stuff for a leader in the CT industry. However, my experience has taught me that the understanding of the interdependency of these expense categories is less common. From a forensic standpoint, the efficacy of a CT program can be diagnosed by looking at the proportionality of these expense categories. From an adaptive perspective, the performance of the CT program can be modified by strategically adjusting the proportionality of these expense categories.  More…