X Hospital Cost Control Improvement Research

With the further development of healthcare reform, hospitals over the country are facing the challenge of strategy transition in the future. On one hand, government reduces the subsidies for the hospital, resulting in an increased finance pressure; while on the other hand, the implementation of limited medical price policy highlights the non-profit nature of hospital. The major components of the hospital incomes include medical profits and government subsidies. Under the condition of consistent number of patients, the implementation of limited price policy maintain the medical profits for one hospital at a constant level, while the decrease in government subsidies reduces the total hospital income. However, for hospitals to survive in today’s intense competitions, updates in hospital facilities and maintain a reasonable level of salaries and training fees for the faculties are required. Thus, from the finance level, the implement of the above two policies is highly against the future development of hospitals. To further realize the development of today’s hospitals, two methods are proposed. The first way is to expand the market occupancy and attract more patients, increasing the profits through higher income, and the second way is to control the medical cost under the current income level and patients number. On the prospective of the first method, to attract more potential patients, development of the hospital itself is the priority through increasing the level of services, medicals, and facilities, which is difficult to achieve in short terms. Meanwhile, as most of the public hospitals over the country have not yet reached the top level, they are incapable of attracting patients outside the region, increasing the difficulties in the market expanding. Therefore, reducing the medical cost becomes the most obvious way to achieve profit growth.To better fit the local medical policies, X hospital, a comprehensive public hospital of L city, has made some changes in recent years. It has gradually transformed from an institution to an enterprises. With the reduced government subsidies, the policy of financial self-sufficiency, and limited medical price policy of identified diseases, cost control became the key development point of X hospital at this period. However, the current situation of cost control in X hospital is not optimistic, with less than 10% profit margin. Medical cost is mainly composed of health care costs, management costs and other costs, of which the health care costs occupies the highest proportion and is the main focus of cost control. Management costs is the second most consumed cost, and it is the key issue in improving the cost control level. Other costs makes the minimum occupation, reflecting the degree of details in cost control work. The main problems in the cost control of X hospital are:weak consciousness in cost control, insufficient backward methods, unclear goal, incomplete objects, imperfect organization and system. X hospital should solve the above problems one by one with the corresponding improvement methods. The first task would be to enhance the cost control consciousness throughout the hospital and import advance information management policy, to alter the current condition of improper cost control method. Afterwards, the hospital should clearly define the goal of cost control on more complimented subjects, while comprehensive policy and organization should be developed. Last, the details of cost control problems should also be covered, such as utilizing the storage management policy on mediation and facility purchases and so on. To further promote the application of the aforementioned policies, proper guarantee strategies, e.g., budget control, special occasion prohibition, and balance score recorder for cost control evaluation, should be carried out.The case study of the cost control condition of X hospital would be focused in the thesis, and appropriate improvement policies and guarantee methods would be proposed. Currently, there are many similar hospitals existing in L City, and hopefully, through the analysis of X hospital, the other hospitals can be aware of their existing cost control problems and take the advices in this thesis for their own further development benefits. One big innovation of this thesis is the application of the storage management policy in the purchase of medications and related medical facilities for X hospital, as well as utilizing the balanced score method into the evaluation of cost control effect..