Commonly Overlooked Areas of Savings for Hospitals (Part 2 of 2)

by webadmin on April 22, 2013

In our last posting, we began looking at the Huron Consulting Group’s recent report titled “Ten Overlooked Opportunities for Significant Performance Improvement and Cost Savings.” We covered the first five areas of the report, and now, we move into the final five.

The report looks at potentially “untapped” savings that internal improvement teams should be examining in an effort to reduce costs. Huron believes these areas “can create a total improvement of 14-26 percent” if they are “implemented rigorously and systematically.”

Along with these 10 opportunities for reducing costs, the report gives the percentage of improvement opportunity for each area, a figure that is oriented around a $365-million, 350–bed hospital, along with the internal challenges of implementing changes in these areas. The report also gives the key self-assessment questions each organization should be asking of themselves about these 10 facets of their operations.

The report itself can be found here, and we recommend referring to it for the self-assessment questions, all of which could prove valuable for your organization.

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The sixth savings area Huron lists is non-clinical supply costs such as linens. Reducing costs here could bring about a five to 20-percent improvement. Huron points out that the difficulty in implementing these savings comes from “overutilization so ingrained into workflow that opportunities for savings are not recognized.”

Seventh, an improvement in ambulatory throughput at physician offices could present an additional five-percent in revenue or $3 million annually. Huron believes this is one of the easier items on the list to implement. The challenge comes with physician offices, since they often lack “the tools and metrics in place to measure, analyze, and improve throughput.”

Eighth, clinical-operations efficiency, such as case management, interdisciplinary care, coordination, patient placement, bed turnaround, and transportation could produce a five to 10-percent reduction in patient days that could lead to a “two to four-percent net-revenue improvement opportunity for capacity-constrained organizations.” Once again, the problem here becomes the involvement of multiple individuals and departments, all of whom must “establish and maintain the intensive and holistic focus needed to make sustainable change.”

Ninth, reprocessing single-use clinical devices could produce a 15 to 40-percent improvement or a $175,000 to $315,000 savings. Here, Huron says you’ll be battling the “misperceptions around reprocessing.” It’s important that your clinicians understand reprocessed single-use devices are FDA-regulated and proven to be safe.

Finally, more intensive blood management could lead to a 10 to 20-percent improvement or $200,000 to $500,000 savings. This is one of the hardest areas in which to create change, Huron says, simply because developing the processes and metrics to achieve these savings is complicated for physicians.

What are your thoughts on these final five areas? Has your organization made any headway in savings with the areas listed above? If so, how did you approach changing your culture and implementing change?

-by Pete Fernbaugh

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