Chapter 5: Simple Steps to a Cheaper (More Profitable) Hospital

INTRODUCTION

It should come as no surprise that a faster, better hospital will be cheaper to operate and more profitable. When you're not dealing with all the delays in the emergency department (ED) admission-discharge process, fewer patients will be boarded in the ED, reducing diversion and patients who leave without being seen (LWOBS). More patients can be seen more quickly, increasing revenue and improving patient outcomes. When you're not dealing with the extra costs of preventable falls, infections, and medication errors, it will make the hospital more cost-effective, profitable, and safe.

FASTER + BETTER = CHEAPER AND MORE PROFITABLE!

One year, the National Association of Healthcare Quality Conference in Orlando, Florida, sandwiched itself in between Hurricane Ivan and Tropical Storm Jeanne. This was after hurricanes Charles and Frances had pounded the state. Mounds of debris still littered the suburbs.

Although most hurricane seasons deliver three or four hurricanes, most people now have come to think of Florida as the hurricane state, not the sunshine state. What was different about that particular season from the last? It was not the number of hurricanes, because that's about the same every season. The difference was that they all happened in such close proximity that we were able to detect the pattern: tropical storm grows into a hurricane that hits Florida, the panhandle, or the Gulf Coast.

This is the challenge faced by all quality professionals. It's easy for people to detect mistakes and errors when they happen often enough. But when the frequency of those mistakes falls below a certain level or they have a minor impact, you can no longer detect them with your five senses. You need some better tools. Fortunately, the process (5C's) and tools are simple:

1. Count your misses, mistakes, and errors using control charts.

2. Categorize your misses, mistakes, and errors using Pareto charts.

3. Cause: determine the root cause of the biggest category using a fishbone diagram.

4. Correct the process and systems using countermeasures and action plans.

5. Confirm that the correction yielded the desired results using control and Pareto charts.

Count Your Misses, Mistakes, and Errors

While much of healthcare quality is focused on clinical care and the Joint Commission and National Database of Nursing Quality Indicators measures, there's a lot that can be done with the financial or "transactions" side of the business to eliminate costs and increase profits. One healthcare client had 37,000 rejected insurance claims worth millions in appealed and denied claims. In case it isn't obvious, there was a lot of rework involved in fixing those rejects and appeals. A hospital can have great clinical success but terrible financial issues. Both the clinical and operational sides of the hospital have to work flawlessly to reduce costs and maximize patient satisfaction and outcomes.

Categorize Your Misses, Mistakes, ...