Healthcare spending and costs have increased drastically over the past several years due to the global COVID-19 pandemic. Though medical industry spending grew before the outbreak- 4.3% from 2018 to 2019- that pales in comparison to the massive 9.7% jump from 2019 to 2020. Because of these drastic increases, health systems desperately need effective, cost-cutting solutions that can help reduce healthcare costs.
Below, our team of medical professionals at Clearstep will explore some of the best strategies that healthcare systems and hospitals can leverage to reduce costs without negatively impacting patient care while also increasing their return on investment (ROI) on both in-person and digital healthcare solutions.
Critical Strategies for Cutting Healthcare Costs
When implementing effective cost-cutting strategies within the healthcare industry, the key is to reduce costs without impeding the quality of patient care or essential medical services. Here are seven effective strategies your health system can leverage to help cut costs while maintaining high-quality patient care.
1. Optimize Healthcare Staff Through Training and Development
Healthcare systems should emphasize employee training and improvement to help their critical medical staff advance their skills to provide better, more effective patient care. Not only will this significantly benefit patients, but it will also reduce the need to hire new staff by increasing employee retention.
According to a recent national survey, up to 70% of healthcare staff reported that extra training and development encouraged them to stay in their position. That figure jumped to 87% when accounting for Millennial responses, specifically.
2. Encouraged Increased Physician Engagement
Increased levels of physician engagement are not only a critical element of improving patient care quality and the overall safety of treatment but it’s also associated with reduced system costs. Data-driven insights have indicated that increased health system performance can significantly impact the health system’s financial state and help them identify areas of prospective improvement, resulting in lower healthcare spending.
For example, the Thibodaux Regional Health System managed to save millions of dollars in spending when taking active steps to increase physician engagement and improve patient care quality. Care became so effective that they were able to safely reduce the length of stay (LOS) for patients with pneumonia.
3. Analyze and Adjust Services for Optimal Patient Flow
The quality and pace of patient flow through a healthcare system can make or break cost-saving efforts. Suppose a health system is determined to cut costs while improving care. In that case, they need to enhance the efficiency of patient flow by standardizing how they move around and through the healthcare system. Not only can this drastically reduce costs while improving care overall, but it can also help illuminate other areas where individual facilities within the health system can implement strategic cost reduction measures.
Healthcare systems will drastically reduce wait times and delays through patient flow optimization, ensure maximum occupancy, and preserve critical staff resources.
4. Strive to Reduce Readmissions
Hospital readmissions are a primary source of significant monetary losses for healthcare systems and harm patient outcomes. Many readmissions are also easily preventable, especially since they are largely connected to patient malnutrition. According to various studies, more than half of all hospitalized patients are malnourished when they are hospitalized, though most are not correctly coded for the condition.
Health systems and the various facilities they control need to pay closer attention to malnutrition in patients and actively work to resolve the issue to help reduce readmissions, therefore saving costs.
Clearstep is here to help you personalize your patient care while cutting down on costs.
5. Leverage Evidence-Based Standards of Care
Variations in care practices and standards within health systems can cause drastic variations in patient outcomes, resulting in some systems losing millions due to extensive LOS and patient readmissions. To overcome this issue and prevent damage to their bottom line, healthcare systems should actively adopt evidence-based standards of care to help improve treatment and patient outcomes.
This proven strategy has helped drastically reduce losses in many healthcare systems. For example, the Billings Clinic implemented evidence-based, standardized protocols to enhance care coordination for patients with heart failure, and significantly improved outcomes while saving up to $544,000. If that’s what a single clinic was able to save in terms of healthcare costs by adopting standardized protocols, entire health systems can save exponentially more.
6. Predict Patient Propensity to Fulfill Payments
Patients share the burden of healthcare costs alongside healthcare systems and the facilities they control, which is only getting worse as out-of-pocket spending increases. When patients fail to pay their bills, health systems are stuck covering the costs, and when patients have to pay too much for their care, There’s a risk they may not pay at all. Healthcare systems can leverage quality P2P technology and predictive models to forecast the likelihood of patient payment and work with patients to explore different payment plans and options that fit their financial needs.
Related: 3 Ways Patient Care is like Tinder
7. Bundle and Standardize Contracts
Healthcare systems can significantly cut costs by bundling and standardizing their contracts for vendors, whether they provide food services, clinical engineering services, environmental service (EVS), information technology (IT), and human resources (HR). Outsourcing these services can also be a great way to cut costs while reducing overhead.
That said, working with too many outsourcing partners can be complicated and waste money while negatively impacting patient care. Health systems should look to standardize vendor services through a single partner to avoid these issues.
Cost-Cutting Strategies to Avoid When Reducing Healthcare Costs
Along with implementing the seven key cost-cutting strategies noted above, healthcare systems should avoid several other prospective cost-cutting strategies since they typically create various issues that negatively impact costs and patient care. Some strategies to avoid include;
- Support staff layoffs
- Maximizing patient throughput
- Focusing too heavily on procurement prices
- Avoiding care standardization
- Underinvesting in equipment and space
Final Factors to Keep in Mind
Our healthcare experts at Clearstep hope the above article has helped you figure out some great new cost-cutting strategies to implement in your health system. For more information on other great healthcare topics, please consider browsing our selection of other expertly written resources.
If you’re looking for a way to cut costs while improving patient care, contact Clearstep today to learn about our services.