Study: Hospitals Need Better Efficiency

Hospital inpatient care is highly inefficient, according to a study released this week by a health care consulting firm.
Axene Health Partners, an independent health care consulting firm based in Murrieta, released its “2016 California Hospital Risk Outlook” Nov. 1. The report, focusing on possibilities for increased efficiencies for California hospitals, drew a number of conclusions, including:

  • Inpatient costs at all types of hospitals in California could be reduced by at least 25%;
  • Savings would total $10 billion among 275 hospitals across the state;
  • There is not much difference between for-profit and not-for-profit hospitals in terms of efficiency opportunities; and
  • Public hospitals are the least efficient type of hospital, about three percentage points worse than private hospitals.

”We would expect them to have a harder time being more efficient,” said David Axene, president of the firm that conducted the study. In part, he said, public hospitals have a more varied and unpredictable patient mix because of their role as the providers of last resort.
Inpatient hospital stays could be made more efficient in a variety of ways, Axene said — for example, by expanding the number and frequency of rounding in the hospital by physicians. Usually physicians stop at a hospital room once a day to evaluate a patient and write orders.
“If it happens at 11 in the morning, that’s the only time you can discharge someone,” Axene said. “But if you add other times, people can be discharged when it’s the right time to be discharged, you can be more efficient without affecting the quality of care.”
Policy makers and stakeholders might want to focus more directly on inpatient hospital care to save money through greater efficiency, Axene said.
“Whenever we review practices, what we typically see is 60% to 70% of the savings is hospital inpatient-based,” Axene said. “So about two-thirds of what can be saved is in the inpatient hospital sector. That’s the gigantic takeaway — that there’s such a substantial amount to be saved.”