Hospitals are curbing non-essential expenses in today’s tricky operational environment, but they’re still looking to invest — just with more due diligence and in companies that can immediately save money or add revenue, executives said.
“We’re not going after anything that’s kind of cool that takes a couple of years to get to the bottom line. This is about immediate returns,” said Rasu Shrestha, chief innovation and commercialization officer at nonprofit Advocate Health.
Hospitals — especially large nonprofit systems with substantial cash pools — have been acting more like venture capitalists in recent years, ramping up investments in companies with products they can use and scale down the line, reports Healthcare Dive.
At the same time, many health systems have been struggling financially. About half of U.S. hospitals finished 2022 with negative margins as expenses outpaced revenue, according to Kaufman Hall. Though early data is showing an improvement in 2023, hospitals continue to report higher labor expenses and lower patient volumes.
As a result, hospitals that used to spend funds based on projections for future clinical outcomes improvement or revenue growth are instead refocusing on solutions with a proven return on investment. Read more.
