August 30

Does Your Hospital’s Culture Matter in Cost Management?


Something that you might not realize if you have only worked at one or two hospitals, systems, or IDNs in your supply chain career is that all healthcare organizations have a different culture or shared beliefs, values, customs, practices, and social behavior that guide their actions.

No Two Healthcare Organizations Are the Same Culturally

Having worked with more than 500 hospitals, systems, and IDNs as consultants, trainers, and coaches over the last 34 years, we can attest to this cultural fact from our own empirical experience. We have never seen two healthcare organizations that are the same culturally.

Organizational cultures develop over many years and usually are originated by their founder’s ideas. Ray Croc, the force behind McDonald’s, was a neat freak, so his focus was on cleanliness of his stores’ bathrooms and parking lots. As the story goes, when Croc visited his stores nationwide the first place he would go was their parking lots to pick up paper, even though he could have asked one of his employees to do so. This was so important to Croc that he was willing to do this dirty work himself, even though he was a multi-millionaire, so that his employees would get the message that cleanliness matters at McDonald’s.   

How Do Cultural Aspects Relate to Healthcare Cost Management?

How do these cultural aspects relate to healthcare cost management? Well, some hospitals’ cultures are frugal, Spartan, careful and conservative, while others are careless, hasty, heedless, and rash. If you work at the latter, your job as a cost manager will be very difficult, unless new management is hired that brings a new enlightened cultural foundation to your hospital, system, or IDN. However, don’t despair!

You can make big, small, and/or incremental changes in your hospital, system, or IDN’s cost management culture, even if it isn’t very cost conscious, by chipping away at the waste and inefficiency in your healthcare organization’s supply expenses. This is because, even in organizational cultures that aren’t frugal and conservative in their cost management attitudes, losing money by being careless and inefficient is hard to justify in the new economy we find ourselves living and working in today.

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cost management, healthcare cost management, healthcare supply chain, Healthcare Value Analysis, hospital cost management, hospital supply chain, Hospital Value Analysis, supply expenses

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