8 Ways for Hospitals to Reduce Costs on Overhead Costs

8 Ways for Hospitals to Reduce Costs on Overhead Costs

Reducing overhead costs is essential for hospitals as they continue to face pressure from insurance companies and government agencies to decrease spending. While it may seem difficult to make reductions without compromising the quality of care, there are many strategies that hospitals can put into place relatively easily and at a minimal cost. This article will explore several methods that our panel of experts suggests for reducing overhead expenses.

1. Refurbishing Equipment Instead of Buying New

Hospitals can save big on costs by refurbishing existing equipment instead of buying all new machines. For example, Mindray ultrasound machines, which are necessary for many medical procedures. The costs are lower than buying new, and the quality of refurbished ultrasound machines will be just as good.

2. Identify Key Performance Indicators (KPIs)

Hospitals need to identify key performance indicators (KPIs) to make data-driven decisions about where they can make cuts. These KPIs will be different for every organization, but could include measures such as length of stay, patient satisfaction scores, or readmission rates. Once KPIs are established, hospital staff can work on finding ways to improve them.

3. Encourage Nurse Practitioners and Physician Assistants to Take on More Responsibility

One way to reduce the number of physicians needed on staff is by encouraging nurse practitioners (NPs) and physician assistants (PAs) to take on more responsibility. This could involve expanding their scope of practice or increasing the number of patients they see per day. This frees up physicians to see more complex cases and helps reduce the overall number of staff members needed.

4. Implement a Lean Management System

Lean management is a system that is often used in manufacturing and other industries to improve efficiency and quality while reducing waste. You can apply this same principle to hospitals to streamline processes and reduce costs. Many resources are available to help organizations implement a lean management system, such as books, online courses, and consultants.

5. Use Technology to Automate Low-Value Tasks

One way to free up nurses and doctors for more important tasks is by using technology to automate low-value tasks. This could include ordering supplies, scheduling appointments, or sending reminders to patients. Many different types of software available can help with this, so it is important to research the best option for your needs.

6. Outsource Non-Essential Services

Another way to reduce costs is by outsourcing non-essential services to third-party providers. This could include things like laundry, food service, or housekeeping. While this may not be an option for all hospitals, it can be a good way to free up staff time and resources for more important tasks.

7. Negotiate with Insurance Companies

Finally, hospitals need to negotiate with insurance companies to get the best possible reimbursement rates. This can be a complex and time-consuming process, but it is essential for ensuring that your hospital is getting paid fairly for the services you provide. There are many resources available to help with this, so be sure to research and find the best option for your needs.


There are many different ways that hospitals can reduce overhead costs. By implementing some of the strategies listed above, you can free up staff time and resources, improve the quality of care, and ultimately save money.

Written by Joshua Galyon

Joshua is a senior editor at Snooth, covering most anything of interest in the world of science and technology. Having written on everything from the science of space exploration to advances in gene therapy, he has a real soft spot for big, complicated pieces that make for excellent weekend reads.

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