Hospitals today face a tough challenge. Patients want hospitals that offer multiple specialities under one roof because it saves time and provides complete care for complex health issues. However, investing in multiple specialities is expensive, and many hospitals struggle to break even because not all specialities attract enough patients. This creates a dilemma: hospitals need to invest in multiple specialities to attract patients, but these investments often don’t pay off. To solve this, hospitals need a clear strategy that balances patient needs with financial sustainability. This plan is divided into two scenarios: hospitals already invested in some specialities and hospitals starting fresh. It also highlights the importance of costing and breakeven analysis in making smart decisions.
- The Core Dilemma
Patients today prefer hospitals that offer a wide range of services, from cardiology to orthopaedics, all in one place. This is convenient for them, especially when they have multiple health issues that need different specialists. However, for hospitals, this creates a big problem. Setting up multiple specialities requires a lot of money—hiring specialists, buying equipment, and building facilities. But if these specialities don’t attract enough patients, the hospital loses money. This leaves hospitals stuck between two bad choices: either limit their services and risk losing patients or invest heavily and struggle to break even.
Strategic Framework
- A. For Hospitals Already Invested in Some Specialities
Hospitals that have already invested in multiple specialities but are struggling to break even need to focus on making the most of what they have. The first step is to conduct a breakeven analysis. This means looking at how many patients each speciality is attracting, how much revenue it’s generating, and how much it costs to run. This helps identify which specialities are underperforming and need attention.
Once the analysis is done, hospitals should focus on optimizing their resources. For example, staff can be cross-trained to handle multiple roles, and schedules can be adjusted to make sure equipment and operating rooms are used efficiently. High-demand specialities like cardiology or orthopaedics should be prioritized, as they are more likely to attract patients and generate revenue.
Telemedicine can also be a game-changer. Instead of hiring full-time specialists for low-demand areas, hospitals can use telemedicine for consultations and follow-ups. This reduces costs while still offering patients access to the care they need. Another strategy is to introduce bundled pricing, where patients pay one price for a package of services, like consultations and diagnostics. This makes the hospital more attractive to patients while increasing revenue.
Finally, improving the patient experience is key. Hospitals should train staff to provide personalized care and streamline processes like appointments and billing to reduce waiting times. Happy patients are more likely to return and recommend the hospital to others.
II.B. For Hospitals Starting Fresh
Hospitals that are just starting or considering multi-speciality investments need to be careful not to over-invest. A phased approach works best. Start with high-demand specialities like cardiology or obstetrics, which are more likely to attract patients. Once these are established and generating revenue, the hospital can gradually expand into other areas like neurology or oncology.
Partnerships can also help reduce costs. Instead of building everything from scratch, hospitals can collaborate with single-speciality clinics or diagnostic centers. This allows them to offer multi-speciality care without heavy upfront investments. Telemedicine platforms can also be used to provide consultations in low-demand areas, reducing the need for full-time specialists.
A hub-and-spoke model is another effective strategy. The main hospital acts as the hub for advanced care, while smaller clinics in nearby areas handle primary care and routine diagnostics. This reduces the burden on the main facility and ensures better use of resources.
Preventive care programs can also attract patients. For example, hospitals can launch wellness programs or chronic disease management plans for conditions like diabetes or hypertension. These programs ensure a steady flow of patients and build long-term relationships.
Before making any investment, hospitals should conduct a cost-benefit analysis. This means looking at the potential revenue and comparing it to the costs. Data analytics can help predict patient demand and ensure that investments are financially viable.
III. The Importance of Costing and Breakeven Analysis
Costing and breakeven analysis are critical for hospitals, whether they are already invested in multiple specialities or just starting out. These tools help hospitals make informed decisions by providing a clear picture of the financial viability of each speciality. For example, they can identify which specialities are profitable and which are losing money.
These analyses also help optimize resources. By understanding the costs and revenue associated with each speciality, hospitals can allocate resources more efficiently. This reduces waste and improves operational efficiency.
Another benefit is risk mitigation. Costing and breakeven analysis help hospitals identify financial risks early and take steps to address them. This ensures that investments are sustainable in the long run.
Finally, these tools support strategic planning. Hospitals can use them to develop a phased investment approach, focusing on high-demand specialities first and expanding gradually. Regular analysis also allows hospitals to monitor performance and make adjustments as needed.
IV. Case Study: Excel Care Hospital
Excel Care Hospital based in western India faced a common problem. Despite offering a wide range of specialities, many were operating at low occupancy rates, leading to financial losses. To address this, the hospital conducted a breakeven analysis and identified underperforming areas. They prioritized high-demand specialities like cardiology and invested in top-tier doctors and equipment. They also partnered with a telemedicine platform to offer consultations in low-demand areas, reducing costs.
To attract more patients, Excel Care Hospital introduced bundled pricing for multi-speciality consultations and diagnostics. They also launched digital communication drive, social media-based awareness campaign, targeted camps in the nearby areas with local patronage, wellness programs, ran theme-based subsidised camps in hospitals, corporate tie ups and chronic disease management plans, which brought in a steady stream of patients. Within 18 months, the hospital saw a 40% increase in patient footfall. Occupancy rates in key specialities improved from 50% to 85%, and the hospital achieved breakeven within two years.
V.Action Plan to Achieve Breakeven
The first phase, lasting up to six months, involves assessment and planning. Hospitals should analyze patient demand, identify high-potential specialities, and develop a financial plan with breakeven targets. The next phase, from six to 18 months, focuses on implementation. Hospitals should invest in high-demand areas, optimize resources, and launch telemedicine and preventive care programs. Targeted marketing campaigns and community outreach initiatives should also be rolled out.
The final phase, from 18 to 24 months, is about monitoring and optimization. Hospitals should track key performance indicators like bed occupancy rates and patient turnaround time. Based on this data, they can make adjustments to improve efficiency and patient experience. Successful initiatives should be expanded, while underperforming ones should be phased out.
VI.Proactive Solutech: Providing solution for breakeven in hospital services
The multi-speciality investment dilemma is a significant challenge, but it can be overcome with the right strategies. Hospitals should focus on high-demand specialities, optimize resources, and leverage partnerships to reduce costs. Specialised costing and pricing of hospital services by Proactive Solutech can be a game changer. Costing and breakeven analysis are essential tools for making informed decisions and ensuring financial sustainability. The case of Excel Care Hospital shows that with careful planning and execution, hospitals can balance patient attraction and breakeven, turning challenges into opportunities for long-term success.