Productivity + Risk Management = Success

“Many of the major shifts (in healthcare) over the past decade can be characterized as focusing on bulking up pieces of the healthcare puzzle and on squeezing out inefficiency, but in the coming decade we can expect the shifts to be more systemic—rearranging pieces, adding new players, and changing the very definitions of efficiency and quality,” writes Ron Adner, Ph.D., Professor of Strategy at Dartmouth College.

Efficiency, productivity and quality define success not just in healthcare, but across industries.

In fact, a recent working paper from the Congressional Budget Office found that the magnitude of the financial impact U.S. hospitals will face in the future depends on how much they can improve their productivity over time. The CBO paper concluded that if hospitals are unable to increase their productivity or otherwise reduce cost growth, the share of hospitals with negative profit margins will rise to 60% and their average profit margin will fall to -0.2%.

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CFOs and the Supply Chain: A winning strategy

Over the past couple of years, in this space you’ve seen the discussion about supply chain as a strategic asset for healthcare organizations, and how important it is that those in the C-suite understand and view it as such.  A recent Dow Jones/Deloitte Risk & Compliance Journal report titled “How CFOs Are Reshaping Supply Chains” makes this case very compellingly.

The report notes that while both chief risk officers (CROs) and chief financial officers (CFOs) have long been involved with supply chain oversight, finance chiefs—with their eyes on cost controls, risk management and the levers of working capital—are increasingly involving themselves.

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