Question

What do you think is the item that accounts for the most cost in any hospital's budget? Can you outline ways to keep this cost under control?

Answer 1

Labour cost is the biggest expense in a hospitals budget. There are various labour expenses in a hospital such as clinical, non clinical, physician and nursing staff costs. There are various other affiliated physicians who are not on the rolls of the hospital. Together, their salaries and wages accounts for the largest cost.

The hospital can use Technology to track the labour expenses. Softwares help in providing complete analysis of the various labour costs and the areas which can be cut down. The Trends and staffing needs must be recognised as well as Central staffing pool established.

The industry ratios must be kept in mind and productivity of physicians must be analysed to determine their requirements.