Strategic repositioning: a practical approach to reducing costs and enhancing quality

Sharply increased competition threatens the status quo in most healthcare organizations, which must now decrease costs while improving service. Those organizations can use strategic repositioning to evaluate their business practices and insure that they are performing at peak efficiency. Strategic repositioning (SR) is a process that changes functions within an institution--not just how people do the jobs they have done, but what they do. Meaningful cost savings come from changing the way services are delivered rather than from simple belt-tightening. This article discusses initiatives that resulted from an SR process at the University of Pittsburgh Medical Center. The radiology department was one of the first departments to participate in the process and successfully reached its goal: to reduce its operating budget by 22% over three years while increasing service quality. Generally, SR includes the following steps: assessing the status quo, project organization, benchmarking and evaluating results. Some of the changes proposed by the radiology department were: closing outpatient radiology services at an adjacent clinic, decommissioning the CT scanner in the OR, PACS implementation, consolidating ultrasound with the peripheral vascular lab, decreasing the use of non-ionic contrast media, decommissioning underutilized equipment, and consolidating services such as transcription and scheduling. As changes are suggested with an SR process, executives must make difficult decisions, such as whether a program survives or is discontinued. Radiology cannot do this alone! Establishing ambitious improvement goals at the beginning will set the stage for the program. Stretch beyond the limit. If the expectation is to decrease 15%, try to decrease 20% and in many cases quality will still be enhanced. It can be done.