According to a 2008 PricewaterhouseCoopers report, the nation's healthcare system annually wastes about $1.2 trillion. This accounts for more than half of all U.S. healthcare spending.
With this number in mind, healthcare providers are on a mission to trim the fat. Here's a look at how four providers are preventing waste:
Bethesda Healthcare System, Boynton Beach, Fla.: Bethesda Healthcare Chief Financial Officer Joanne Aquilina said she had limited resources for software upgrades, but also knew using technology was key to improving the organization's revenue cycle. Contracting with OptumInsight (formerly Ingenix), an Eden Prairie, Minn.-based healthcare consulting firm, Aquilina initiated a five-year strategy to move the facility to an electronic medical records system and streamline the billing system to reduce cost.
"Waste reduction is an important component to improving the revenue cycle," said Aquilina.
According to Scott Armstrong, vice president of revenue cycle solutions at OptumInsight, they first targeted the central scheduling department. "We wanted to make sure they were collecting the right information when patients were scheduling appointments so services could be billed correctly the first time," he said.
Another area where Bethesda Healthcare has improved is inpatient coding. With new computer-assisted coding software and other process changes, the hospital has significantly shortened its coding time, which used to take anywhere from 10-15 days.
"Now there are almost no charts that are holding for more than four days for coding," said Aquilina. "A faster and more accurate billing process means the hospital gets paid sooner."
Bon Secours Richmond Health System, Richmond, Va.: Bon Secours has set a goal to reduce its cost per case by 10 percent in the next three to five years. To accomplish this objective, the management team is targeting several key areas of waste: preventable ER visits and admissions, unnecessary testing, inefficient patient flow, hospital acquired infections and rates of readmission, complications and mortality.
"The biggest areas of waste are also the biggest opportunities for financial improvements," said Bon Secours Charity Health Systems Chief Financial Officer Melinda Hancock.
Bon Secours officials said they realize that in order to successfully decrease waste and improve efficiencies, they must involve physicians, nurses and employees. To that end, they have implemented a campaign to encourage staff to make efforts toward accelerating clinical transformation. Staff compensation is tied to quality measures, and incentives and friendly competition are also used to boost participation.
Cleveland Clinic Health System, Cleveland, Ohio: Suzanne Tschetter, director of patient financial services at the Cleveland Clinic Foundation, set her sights on automating the credit refund process as a way of increasing efficiency, reducing errors and improving patient satisfaction.
Working with CDR Associates, a subsidiary of ACS Xerox, Tschetter brought in automation software that uses scoring algorithms to identify overpayments or wrongly posted allowances and automatically send refund checks of less than $500 to patients.
"Our average credit balance refund is $75, and the cost to manually produce a refund check is well beyond that," said Tschetter.
Using the automation software, Cleveland Clinic saves significantly on staff time and avoids the risks associated with not refunding credit balances promptly, such as federal penalties, revenue cycle issues and exposure to possible fraud.
Central Maine Healthcare System, Lewiston, Maine: Kathy Bourgault, system director of the revenue cycle at Central Maine Healthcare, is a big believer in the power of engaging her staff.
"People are inherently goal-oriented. If you explain what the goal is, they will find ways to improve the process and cut waste," said Bourgault. "We measure every problem. As soon as there is a measurement, people will work to achieve the goal. If you can measure it, you can manage it."
Central Maine Healthcare recently introduced integrated eligibility and price estimation. By querying a patient's insurance company, hospital officials are able to confirm whether the patient is covered for a particular procedure and then give an estimate for the out-of-pocket expense. This has improved patient satisfaction and payment rates.
"We are always looking to add value," said Bourgault. "We focus on process improvement, Lean principles, accountability, teamwork and new technology that can have a positive return on investment."