Strategic resource management

No one in healthcare can challenge the fact that expense reduction is and will continue to be one of the primary concerns of the industry. Everyone also knows that these cost pressures are merely beginning. All indications point to a future environment of intense competition, managed care based on cost-per-covered-life reimbursement, reduced reimbursement from Medicare and Medicaid, and further reconfiguration of the industry to shift patients from in- to out-patient settings. When we focus on the future, the $64,000 question is: "What is the healthcare industry doing to control non-labor expenses, and who is responsible for this ambitious undertaking within each hospital or network?" With nearly 30% of every hospital dollar consumed by non-labor expenses, are current efforts adequate to meet future demands? This article focuses on a strategic plan for reducing non-labor expenses.