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A Simple Way to Save Lives and Money
Better hospital scheduling could reduce overall healthcare costs by $200 billion a year.
By Eugene Litvak and Robert G. Lahita
Dec. 26, 2024 6:15 pm ET
We have a unique situation in healthcare. Everybody hates it: patients, physicians, nurses, surgeons, employers, taxpayers, healthcare executives, etc. The hopelessness of fighting a losing battle against the ailing system contributes to the exodus of doctors and nurses. But there’s a practical way to reverse or at least to slow down this process.
The problem is that unlike most other industries, healthcare uses a cost-plus reimbursement model, meaning that healthcare institutions receive payments greater than their expenses. These institutions lack motivation to focus on cost-effectiveness, and they even resist interventions that challenge the status quo of hospital culture being provider-centered rather than patient-centered.
Our healthcare system could, however, be improved with a singular intervention. The daily number of patients occupying hospital beds has peaks and troughs, resembling an electrocardiogram. The variability in bed occupancy comes not from emergency patients but from scheduled admissions for planned procedures. Hospitals face an unpalatable choice every day: accept patients above their staffing level, with threats to care quality and patient safety, or reduce access to care. Failing to address this challenge adequately, hospitals typically staff to the average level of patient demand, although patients rarely hover at that level.
Daily peaks in admissions above the average staffing levels have been proved to cause patient mortality, medical errors, overcrowding, staff burnout and shortages and readmissions. These consequences are unavoidable unless the peaks are smoothed.
The answer is to even out the scheduling of patient admissions for elective procedures. Research shows that this approach has cascading benefits to both hospital finances and healthcare quality. The result would be saving many lives and billions of dollars—benefiting patients, taxpayers, caregivers and employers. The economy would benefit as well. Nationwide implementation of this smoothing approach could reduce overall healthcare costs by 4% to 5%, or about $200 billion annually.
The hospitals and clinics that implemented smooth patient flow have already saved lives and seen improvements. Cincinnati Children’s Hospital improved its margins by $137 million annually. The Ottawa Hospital saved 40 lives annually due to this intervention. If each U.S. hospital saves only 10% of this number, the approach would save a total of 24,000 lives a year. St. Thomas in Louisiana, a Federally Qualified Health Center with 90% of its patient base within 200% of the national poverty level, used this approach to increase revenues from $2 million to $16 million, while providing access to concierge care for its historically underinsured population.
“Direct and indirect savings from smoother patient flow could give Medicare a new lease on life, underwrite biomedical research, reduce the national debt, support schools, and serve many other private and public purposes. At the same time, properly managed patient flow can reduce medical errors and enhance the quality of care,” noted Harvey Fineberg in 2013, while he was president of the National Academy of Medicine.
We should no longer waste billions of taxpayer dollars while putting patients at risk. We owe the intervention of smoother scheduling to patients, healthcare workers and taxpayers. We must act now, so that we’re not sorry later when we or our loved ones become patients.
Mr. Litvak is president and CEO of the Institute for Healthcare Optimization and an adjunct professor at the Harvard T.H. Chan School of Public Health. Dr. Lahita is director of the Institute for Autoimmune and Rheumatic Diseases at St. Joseph Health and a professor at Hackensack Meridian School of Medicine. Dr. Ellis M. Knight contributed to this article.
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