Improve Hospital EBITDA Margin | Marketing and Sales | Cut Material Cost

What gives us an edge in improving EBITDA margins


Frankly, it is our holistic approach, our in-depth understanding of the nuances of healthcare business and equally importantly, our relentless focus on execution.

Savings on Materials Cost

It could start from helping you save significant monies in materials cost. Procurement in a typical hospital is often left to the folks under the finance department – extremely intelligent and meticulous, but with somewhat inadequate understanding – unsurprisingly so – of clinical subjects. Frankly, there is nothing ‘common sensical’ about appreciating the functional nuances of a stent to be used for neurosurgery or something seemingly as simple as gloves. And that’s where things start going wrong. What makes it even more challenging is the unimaginably large range of items to be procured running into tens of thousands and innumerable suppliers. There is quite a bit, which gets driven by a sense of convenience and simplicity: procurement gets bundled or unbundled at times driven by ease even more so, when one is thinking of ‘small ticket’ items. In such a scenario, it is nothing but our understanding of clinical functions and an in-depth knowledge of options and supplier universe, which has helped us achieve savings in materials cost for our clients as high as 24% at times.

Physician Cost

Revenue for a hospitalPhysician cost is another opportunity area, though it often requires a fundamental shift in approach.  A hospital used to the brand equity of its ‘star’ physicians as the most potent marketing weapon to acquire patients is less likely to get easily enthused with the idea of considering equally competent (in fact, more competent at times), but less famous alternatives and invest instead in building the institutional brand. Similarly, inability to push physicians, who are engaged in a salaried model, out of their comfort zone doesn’t have easy solutions. Once again, even an incremental approach to fix a few pieces here and there without a radical overhaul of the physician engagement policy has helped us move the needle when it comes to physician cost, and even more importantly generate confidence among the promoters and the C-suite team in an alternative approach.

It could even be pricing of services

However, there are times, when it goes well beyond cost reduction. There could be numerous opportunities to increase topline. It may involve a more strategic approach to pricing. There may be continuous pressure – and for obvious reasons – to keep prices low from every quarter: your own physicians, marketing team and of course, the patients. As the end result, you may be unnecessarily leaving too much on the table. Just the pricing-focused approach – meticulous analysis of the strengths and competitive benchmarks, a set of recommendations and phased implementation – helped us add more than 4% to the topline for one of our large hospital clients.

Making marketing more efficient to add to the topline

Making marketing more efficient to add to the toplineThen there are opportunities to increase volumes through arresting revenue leakage at crucial conversion points in a hospital, addressing untapped territories, reinforcing specialties with proven competitive strengths or simply implementing different sales and marketing interventions with a lot more precision. A well-executed CME or a well-designed ad doesn’t cost any more than a poorly executed one but can produce a multi-fold increase in results. Another blackhole for hospitals, in our experience, has been physician referrals, which offers immense scope for all-around improvement starting from physician segmentation and a fine-tuned sales pitch to a seamless plan to ‘hand over the patient back to the referring physician’. Once again, our expertise in marketing & sales and commitment to work practically like the clients’ in-house marketing function have helped us deliver significant improvement in revenue every single time we have worked with a client.

We have successfully executed quite a few challenging engagements focusing on improving EBITDA margins for some of the leading hospitals in the country. To know more about our capabilities, Contact us.


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