Hospital Survival Strategies for the 1980s

Abstract

Survival strategies for hospitals and hospital pharmacy departments are presented, and one hospital's development into a health-services system is described. Financial and competitive pressures are forcing institutions to develop new strategies for survival. The primary institutional strategy is diversification--both horizontal and vertical. Diversification can assist in the hospital's growth, increase its asset and revenue bases, and lead to the development of a health-care delivery system. Marketing to physicians and developing information systems are also critical strategies under a prospective payment system. Institutions will need to know the cost of providing care for specific diagnosis-related groups. Strategies must be employed to develop incentives to reduce inpatient acute-care services and to increase productivity. Physicians should be involved in all of the institutional strategies. Strategies for the pharmacy department are basically the same. Pharmacy departments should develop programs to reduce drug use (especially antibiotic use) and information systems that show the actual cost of providing services by diagnosis. The major corporate restructuring and diversification efforts of one hospital are described. The future of hospitals and pharmacy departments will depend on the successful application of the strategies discussed.