Increasing the organisation's revenue and profitability

When a small percentage of costs are truly variable and much of the remaining expenses are associated with the direct delivery of patient treatment, the only viable approach to overcome increasing medical costs and the need for ongoing investments is to increase revenue and profitability.

All healthcare organisations have a very small percentage of truly variable costs; costs that change with any increase or decrease in activity. Everything else is not a truly variable cost. Cutting these costs (traditionally described as fixed costs) is a risky strategy; it is a strategy that chooses the bottom side of the core conflict over the top (see below). Of course you will get some initial financial gains. You are also likely to get a spiralling reduction in performance: patients will take longer to be treated, length of stay will increase and more patients will be delayed.

The core conflict

The QFI operational stream creates capacity across the system and the revenue generation stream turns this capacity into increased revenue and profit for the organisation. By using a proven TOC-based approach and challenging many of the long-held assumptions about marketing and revenue generation, QFI analyses the market for opportunities that will simultaneously deliver the best possible revenue and profitability without compromising – often enhancing – the quality and timeliness of patient care. 

At the outset of a project we begin our analysis of the market opportunities and then work with the senior management team to design and build the new and compelling market offers that can be implemented when, and only when, the capacity has been created through the operational breakthrough stream.

The revenue generation process comprises: