How Waste Reduction Leads to Cost Savings and Better Patient Care

How Waste Reduction Leads to Cost Savings and Better Patient Care

This article was written by Lisa Miller.
The growing issue of waste in healthcare recently hit the headlines. As I observed in this recent blog, a recent published study suggests that waste costs healthcare organizations between $760 billion to $935 billion each year – around a quarter of all health spend.
Resolving this issue is not a simple fix but the development of robust strategies around waste reduction leads to cost savings and better patient care. The suggestions outlined below can help you to lay the foundations of a broader waste reduction initiative for your hospital.

Implement a telehealth strategy

While it’s suggested that higher revenue health providers have more resources to implement telehealth, all hospitals can begin to integrate this technology into their operations.
Telehealth offers the following advantages:

  • Improved patient care in rural areas: Patients living in remote communities struggle to access much needed care and often face challenges in securing transport to visit a healthcare provider.
  • Better management of chronic illness: The National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP) states that 90% of the total US healthcare spend of $3.5 trillion is accounted for by chronic and mental health conditions. [1] People with chronic illnesses are much more likely to visit the ER or be admitted to a hospital. Telehealth technology empowers hospitals to offer enhanced care management strategies to more effectively manage the cost of chronic illness and reduce hospital stays.
  • In one case study: The cost of care for patients suffering from chronic illnesses was reduced by over 50 percent following the introduction of a telehealth program. A report from the OECD (Organization for Economic Co-operation and Development) into how to tackle wasteful spending on health offers an example of a three year trial into telehealth in England. The results of that trial found that telehealth could reduce emergency admissions by 20% and emergency attendance by 15% for patients with long-term health conditions. These included conditions such as heart failure and diabetes. [2]
  • Doctor/patient relationships are enhanced as providers are able to respond more rapidly to patient demands, improving patient satisfaction and reducing the cost of care.

Over half of all hospitals reportedly have access to telehealth but US healthcare as a whole is slow to embrace its benefits. [3] VIE Healthcare collaborates with healthcare providers to offer innovative telehealth solutions to reduce waste, save money and improve patient care.

Review your administrative spending

The single largest contributor to waste in healthcare is the cost of administration. Due to the complex and time consuming nature of administrative duties that medical professionals are asked to carry out, this amounts to hundreds of billions of dollars annually. Tasks such as record keeping and medical coding and billing result in $266 billion of excess spending every year.
For many hospitals, administration adds to operational inefficiencies. Analysis of the line item details in your purchased services spend in this key area can identify areas for waste reduction and realize significant cost savings.

Reduce waste in the OR

From our work at VIE Healthcare, we know that the OR is another significant generator of waste for health systems. The OR accounts for up to 70 percent of a hospital’s revenue, between 55-65 percent of its margin, and 50 percent of all costs.
Numerous opportunities exist to reduce waste and save money in the OR. For instance:
Recycling: 6 million tons of medical waste are generated annually by hospitals, approximately 30% of that comes from the OR. One study, Recycling In the OR: We Can Make A Difference, suggests that 20-40 percent of this waste can be recycled. [4] With a renewed focus on sustainability, recycling not only reduces waste and saves money but enhances your hospital’s environmental footprint.
Recycling in the OR not only reduces waste and saves money but also enhances your hospital’s carbon footprint. Learn more here: Click To Tweet
Energy efficient equipment: Over half of healthcare’s carbon footprint arises from energy use but we are seeing a shift towards an emphasis on clean, renewable energy. At VIE Healthcare, we recommend the use of energy efficient equipment to reduce waste and the cost of operating expenses in the OR.
Reduce the use of single use items: The high levels of disposable equipment utilized in the OR represents a significant cost for hospitals. While the market for reprocessed medical devices is growing, the priority must be to ensure any risk of infection is eradicated when adopting this approach. [5]
VIE Healthcare’s report on Cost Reduction in the OR provides an in-depth study into the ways in which your OR can drive margin improvement and improve the quality of your patient care.
By taking steps to reduce waste across your organization, cost savings can be realized, enabling a greater focus on the patient experience.
Schedule a call with Lisa Miller to create a cost savings strategy for your hospital.

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