How ERP Software Allows Hospitals To Increase Profitability While Also Improving Patient Care

When you're caring for a patient, it's vitally important for every member of the team to work together. Nurses, techs, physicians, pharmacists, and caseworkers all need to be on the same page about the patient's current state and his or her treatment plan.

Hospitals often fail to apply the same strategy to the way that different business units work together. If the human resources, marketing, operations, and financial departments all worked together regarding the direction of the hospital, hospitals would be able to provide patient care more efficiently and react more quickly to changes in reimbursements or supply chain disruption. That's where enterprise resource planning comes in.

ERP software is designed to connect the disparate business units of the hospital together. All departments share instant access to information, including inventory, revenues, and operational expenses. When hospital data is pooled together, departments are able to better communicate with each other and share suggestions about changes in hospital administration. Below, you'll find three areas in which ERP software helps hospitals maximize profitability while improving patient care at the same time.

1. Medicare Reimbursement Rates

For most hospitals, Medicare reimbursement is a substantial source of revenue. Unfortunately, it can be slightly variable. Reimbursement rates are based on both patient satisfaction scores and patient outcomes, and changes in either can lead to a reduction or an increase in reimbursement rates.

ERP software allows hospitals to minimize the effect that reimbursement rate variance has on hospital operations. Satisfaction scores and outcomes are tracked within the software, and this information is communicated to the financial department along with an estimate of revenue.

In addition, hospitals can use this information to determine the most efficient areas to invest in. Inexpensive hospital upgrades or policy changes that improve both satisfaction and patient outcomes can have a significant effect on profitability.

Conversely, expensive investments that are unlikely to affect reimbursement rates can safely be taken out of consideration. This allows hospitals to improve patient outcomes with a minimal amount of operational expenses.

2. Pharmaceutical Inventory

Access to medication is a necessary part of patient care. Pharmaceutical inventory tracking with ERP software allows hospital administrators to integrate just-in-time ordering into the hospital pharmacy.

As medication is used, more is ordered from distributors based on historical patient demands. This minimizes the chance that the hospital pharmacy will run out of the lifesaving medications that are necessary to treat critical patients.

ERP software also links together medication use, the cost of the medication, and patient outcomes for those who were prescribed the medication during their hospital stay. This allows hospital administrators to identify expensive medications that are not connected to improved patient outcomes. Communicating this information to the clinical staff reduces waste and lowers overall operational costs for the hospital.

3. Clinical Staffing

In the hospital environment, providers are the employees who generate revenue. These include physicians, physician assistants, and nurse practitioners. While nurses and techs are important members of the care team, they're not able to order tests, medications or treatments.

Because providers are indispensable to a hospital's revenue stream, it's important for hospitals to retain the top performers. ERP software joins providers, patient outcomes, and revenue generated to find out which members of the staff are the best at their jobs.

When the human resources department has access to this information, they're able to focus in on retaining the staff members who are making the biggest difference in overall hospital operations.

Overall, linking together hospital departments with ERP software allows hospitals to react quickly to changes, keep operating expenses low, and improve patient care. Integrating ERP software into the existing hospital environment is often a complex undertaking, and it needs the skills of a professional who has experience within the healthcare sector. If your hospital is ready to join your business units together and allow them to share information, contact an ERP consultant who has already helped hospitals make the switch.