Reducing Operating Costs While Improving Quality
 

Maureen Bisognano, executive vice president and COO for the Institute for Healthcare Improvement reveals how hospitals and health systems can reduce operating costs by 1 percent to 3 percent a year—while also maintaining or improving quality.

“The hospital budget focuses on basic financial cost categories: the number of FTEs, the amount of overtime, the use of supplies," says Bisognano. "But that’s not how waste appears. Waste appears in delays, failures to hand off patients efficiently, and duplication.

One of the main problems in a hospital is patient transfers. In the average hospital, a patient often will be transferred two or three or even four times during the hospitalization. Every time that patient is transferred, there is at least some waste. Nurses often have to rewrite the medical record, call down to pharmacy to stock the appropriate medications on the new unit, and call dietary to make sure dietary trays get to the right place. Linen gets thrown away; many of the supplies are thrown away. That whole transfer process is a waste, but it doesn’t show up on anybody’s budget.

We are giving healthcare leaders a new set of ‘waste glasses’ so to speak, so they can better identify where waste occurs. Once they see where waste is most likely, they can go after these areas with improvement projects, such as using queuing theory and flow improvements so patients can much more reliably be placed in the right bed the first time or acuity adjustable beds so patients never need to move, even if their condition worsens or improves.”

This article was excerpted from a Q&A with Maureen Bisognano on HFMA’s Healthcare Financial Pulse web site. Read the entire Q&A.