With an uptick in operating expenses, many hospitals are looking to cut costs.
According to Black Book Research, to break even, average hospital spending will have to be cut by 24 percent by 2022. Given this, cost control has eclipsed revenue growth as the top priority among healthcare CEOs in the US.
Today, we’ll look at six ways on how hospitals can save money while maintaining the highest standard of care.
According to the National Grid, US hospitals spend an average of $1.67 on electricity per square foot per year. In a typical hospital, lighting and heating represent between 61 and 79 percent of total energy use, making those systems the best targets for energy savings.
Transitioning from traditional to LED lighting is one good way to reduce your hospital’s electric bill significantly. LEDs can reduce energy use by up to 70 percent and have a longer lifespan of up to 100,000 hours. Also, several LED providers offer long warranty periods — some even reaching 10 years.
LEDs are made from a durable, mercury-free, glass-free materials, sparing hospitals of costly disposal and recycling.
Air conditioning optimization
Though not all hospital airconditioning units can’t be turned off completely, turning them down to minimum levels whenever possible can save on energy.
Air conditioning units in the cafeteria, educational areas, or offices can be shut off at night, as fewer people will use them.
Likewise, not all the rooms in a hospital are occupied 24 hours a day. These rooms can be equipped with a programmable thermostat that turns up temperatures in the cool season and down in the warm season during no occupancy hours.
It also pays to have the aircon’s economizers checked regularly. The economizer minimizes energy consumption by using the cool air from outside of a building to cool the inside. An economizer stuck in the fully opened position can add as must as 50 percent to a building’s annual energy bill by allowing warm air during the hot season and cold air during the cooling season.
Use IT to reduce costs
In 2010, an average US hospital already had to manage one billion terabytes of data. This amount is expected to rise by a factor of 50 by 2020.
With more hospitals facing large amounts of unstructured and diverse data, they must consider migrating from traditional technology to cloud-based solutions.
An electronic medical record (EMR) system enhances patient data privacy and security, enables quick access to patient records, while reducing costs through decreased paperwork.
As of 2017, 99 percent of hospitals in the country use EMRs, compared to just 31 percent in 2003. According to the American Journal of Managed Care (AJMC), patients treated in hospitals with advanced EMRs cost, on average, 9.66 percent less than those admitted to hospitals without advanced EMRs.
As healthcare providers look to maximize efficiency and meet increased patient care demands, the cloud will continue to be embraced exponentially.
Invest in your employee’s health
Sometimes, hospitals overlook that staff’s illnesses can have an impact on finances. Because of the ever-increasing costs of health insurance, employers should consider implementing wellness programs that will both benefit the employees’ health and the hospital’s bottom line.
Hospitals can offer free or reduced gym memberships, or encourage participation in weight loss support groups. Programs can be implemented for the following areas: stress reduction, smoking cessation, nutrition education, vaccinations, health screenings, health risk assessments, etc.
Cut down on food waste
Hospitals generate nearly 3 pounds of food waste per bed per day. Returned patient trays, expired foods and overproduction all lead to excessive trash.
The Overlook Medical Center in New Jersey makes meals using everyday ingredients, to optimize the scale of labor and food. They come up with menus that repurpose unused food products the following day, provided they’re safe to consume. By choosing less costly items and repurposing untouched meals, the hospital has saved more than $400,000.
On the other hand, there’s also an option for food donation. One in seven people living in the US is food insecure, or at risk of being hungry. However, today, only 16 percent of the nation’s most prominent hospitals have established food donation programs. Many hospitals perceive that food donation is a risk, which is why Feeding America partnered with Practice Greenhealth to create a safe protocol for food donation to feed people through local and regional food banks.
Outsourcing services to outpatient facilities
Cost is a major factor driving the outsourcing of patient services like rehabilitation, dialysis, diagnostic imaging, physical therapy, lab tests, and so forth.
Treatments like dialysis require machinery that can be expensive to procure and maintain. This leads many hospitals to partner with dialysis centers to provide both inpatient and outpatient services.
Aside from reducing costs, outsourcing enables hospitals to focus on core activities and to increase flexibility to configure resources to meet changing market needs.
Investing in your employees’ health, reducing food waste and outsourcing patient services are just some of the ways a hospital can save on money. Remember that cutting down costs can be done, without negatively impacting patient care.