Like most people, I’ve been following the Healthcare Reform debate. A year ago, when it all began, we seemed to be about two problems — access and costs. But all the action to date has been around access – with the insurance industry in the cross hairs. Once something happens there, however, the attention will surely shift to costs, which I think will make access look like a much easier problem.
Of course, from the big picture, keeping people out of hospitals altogether may have the biggest payoff. Still, it’s likely that hospital costs will continue to receive increased scrutiny.
How can hospital costs be reduced? The largest expense is of course personnel. Salaries are unlikely to go down, so productivity must be improved – but how? How can information technology help? Are there some areas where productivity might be addressed first?
Considering other large areas that might make a dent in costs, length of stay comes to mind; both total LOS and stay in expensive units. Can LOS be further reduced without endangering quality, safety and satisfaction – and without causing unnecessary re-admits?
These are just two of possibly the largest areas of costs. There are many more.
What are your thoughts? How do you imagine our industry addressing lowering hospital costs as reform initiatives unfold over the next few years?
Leave a Response
RSS Feed
Facebook
LinkedIn
Twitter
Loading ...
Facebook
LinkedIn
Twitter
Just read an article by Cleverley and Cleverley (Cost Reduction: Identifying the Opportunities) that 1) breaks down the cost of an individual patient stay into its separate parts (room, medications, tests, etc.), 2) compares each to a benchmark cost for that DRG, which 3) suggests where cost savings may be approached. Interesting.
Dear colleagues and friends, welcome to the Clairvia blog!
Michael’s question is a timely one. Over the past two years federally legislated value-based purchasing has generated greater attention to patient quality of care indicators and patient satisfaction in expense reduction and budget discussions. Are the intentions of these federal financial incentives for quality significant enough to draw attention from CFOs? How well do CNO’s articulate to CFO’s the staffing and care processes that reduce hospital acquired conditions (HACs) to both increase quality and reimbursement? That is, what is good (quality of care) for the patient, is good for the hospital.
I have the honor to work with Chief Nurses across the country every week. From the Chief Nurse perspective, several Chief Nurse have experienced integration of both quality and financial data review in making decisions regarding both staff additions, replacements and reductions. This has been very exciting, but hard work for both the CNOs and CFO’s, but is the right work for patients and families. Other CNOs continue to struggle to make visible the business case for quality (review) with fiscal discussions. Isn’t it the time for cost to be discussed in context at the point of care with the patients and quality? (i.e. patient care unit level, ambulatory service, respiratory service)
As senior leaders and collectively as CNOs, COO’s CFOs, and CIO’s I’d be interested to know your thoughts about how we provide the right leadership and infrastructure to support our nurse managers in particular, as the largest operational management group in health care today in this important work to balance quality of care and cost?
Cheers, Sharon Eck Birmingham DNSc, RN Clairvia CNE
Sharon and talented Clairvia team, I applaud your keen focus on quality, safety, and costs through staffing solutions. I call this three-pronged approach creating value. I believe systems that integrate patient information from the EHR into systems that configure staffing and report costs is innovative and essential if nursing leaders are to transform our precious resources into the best outcomes for patients and for the organization. We all intuitively know that in many cases patient factors describe their risk for an adverse event. Let’s keep working on how to use this information to predict the best match between patient and clinician in order to yield the greatest value.
Excellent first post. Let me pick up on two issues raised by Michael in the original post – the primary costs of hospitals is personnel (68%) and nurses make up a large percent of those costs. The second issue is length of stay and the disproportionate amount of resources expended for a small group of patients. I support greater efficiency, in particular using information technology to improve information and workflow. The second issue raised by both Sharons (Sharon^2) is the issue of value. What is nurse’s contribution to patient care, and the added value we bring to the bedside? Can we measure the tangible benefits using existing clinical, operational, financial, and billing data as well as incorporate the intangibles benefits nurses also provide?
We have a lot of work to do as health care reform is implemented in the coming years.
I am indeed in esteemed company since I have read the wonderful work of those who are posting here! I have just finished Dr Eck-Birmingham et al description of a process of standardizing acuity measurement in “Determining staffing needs based on patient outcomes versus nursing interventions”. This process of defines workload based on patient outcomes. This process enhances the value to nursing by codifying and standardizing the their work. It will also promote quality patient care by linking care with outcomes.