Friday, August 8, 2014

Ways to Ensure You Spend Too Much on IT and ...

spending too much
An experienced IT health information consultant offers tongue-in-cheek advice for healthcare administrators hoping to increase their information technology expenses.

They show ways to increase costs by mismanaging the internal workings of the IT department and by failing to optimize how the rest of the organization uses the technology.

Mistakes that increase costs inside the department include:
  1. Replacing hardware too often.
  2. "Partnering" with vendors rather than keeping them at arm’s length. 
  3. Adopting new technology too early. 
  4. Promoting too many people to supervisory or management positions.
In the rest of the organization, you can easily increase IT costs even further by: 
  1. Distributing and multiplying servers beyond what’s needed. 
  2. Attributing all costs to the IT department regardless of what department incurred the expense. 
  3. Delegating IT negotiations to staff lacking technical knowledge and background. 
  4. Hiring expensive in-house experts when contracting with outside consultants would suffice. 
  5. Failing to develop “super-users” in every department.
  6. Finally, larger organizations will almost always increase costs exponentially by outsourcing the entire IT department to an outside vendor.
While this post focuses on information technology, the lessons for physicians and their managers apply across the board. Everyone in practice management frets about cost control.

Twenty years ago, thriving medical practices flush with cash often didn’t sweat the small stuff. That’s not to say we didn’t work hard to keep costs under control; it’s just that revenue had not yet been contracted and regulated into its cur- rent flat-line condition. You could raise prices to cover inflating practice expenses, and give yourself a raise by seeing a few more patients and doing a few more procedures.

But that was then. Today we struggle with a greatly reduced margin of error, and we have to constantly monitor expenditures if we hope to maintain physicians’ incomes. Cost control means much more than counting paperclips, though.

These are 10 points that almost guarantee an increase in IT costs. Without exception, the mistakes result directly from inattention. Managers and other leaders don’t pay attention for one or both of two reasons: laziness and limited capacity. Sometimes we stretch managers beyond human ability and then criticize them for not taking care of all the details. Sometimes, however, managers take the easy way out. Either way, the practice loses.

Managing expenses requires a certain level of skepticism - you just can’t believe everything you hear or read. Never forget that each vendor selling you computers, medical equipment, or even paperclips only makes more money when you spend more money. Even those great, conscientious vendors who reduce their profit margins with lower prices do so in order to make more money in the long run through customer loyalty.

Your favorite vendor rep is not your partner. He or she is just trying to make a living. That doesn’t make the person your enemy - but it does require you to think critically at every turn. If the computer vendor recommends replacing PCs every two years to keep up with technology, remember that average users go four or five years at home without much trouble. If the medical supplies rep offers to inventory your supply closet and fill out the order form, don’t forget about underlying motivations.

Ironically, managing expenses effectively can require a certain level of trust, too. A practice manager with a broad scope of responsibilities cannot stay on top of every little detail. Judicious delegation to trustworthy employees can extend your capacity for counting paperclips and cotton swabs. Failure to empower good workers will multiply your workload.

Of course, you must manage your delegates. Give them clear guidelines and limits, and outline the scope of your expectations. As the old adage goes, “Trust, but verify.”

One more bit of management irony: Not delegating responsibility indicates a certain kind of laziness, too. Have you ever heard, “It’s easier to just do it myself”? It seems that way, but in the end you only increase your own workload.

If you enjoy reading the blog entries in "Solving Problems in the Medical Practice" you may want to check out all the great products at Greenbranch Publishing.

photo credit: via photopin cc

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