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Hospital and Health System

STORY OF THE WEEK


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U.S. Hospitals' Poor Communication Costs $12 Billion Annually

Researchers from the University of Maryland’s Robert H. Smith School of Business put a price tag on the cost of poor communication in U.S. hospitals at $12 billion per year. The research, newly released from the Center for Health Information and Decision Systems (CHIDS), is the first to quantify the economic impact of a healthcare system rife with communication delays and failures.

Among key findings was unnecessarily long hospital stays — such as the time and resources patients squandered waiting to be discharged — account for 54 percent of total losses. To put the $12 billion amount into perspective, the loss equals approximately 2 percent of hospital revenue nationwide, a figure that is more than half of the average hospital margin of 3.6 percent.

In an article, Ritu Agarwal, director of CHIDS at the Robert H. Smith School of Business and the study’s lead researcher, and CHIDS researchers, say the solution to these inefficiencies rests largely in investment in information technology (IT) that would help streamline communication among hospital caregivers. Theirs is a timely observation following the $787 billion economic stimulus bill recently signed into law by President Obama. Of that, more than $140 billion is earmarked for healthcare, with $19 billion to modernize health IT systems. As part of his proposed $634 billion budget to expand U.S. healthcare, Obama has also charged Congress to come up with the means of making it available to 46 million Americans now without medical insurance.

Agarwal points to solutions that include location-based technology that would help staff identify caregivers’ locations at all times and shared communication systems that would allow nurses to identify an attending physician. These investments would significantly reduce the amount of time and resources wasted identifying and locating attending caregivers, as well as the likelihood of hospital error. She also suggests telecommunications systems to facilitate remote consultations with specialists, thereby reducing patient travel and waiting time. Future CHIDS papers and studies will look at how process changes and applications of technology at the hospital level can alleviate these inefficiencies.

In conducting the research, Agarwal, Kenyon Crowley, CHIDS assistant director, and Jorge Diaz Schneider, CHIDS graduate researcher, developed models for quantifying the economic burden of poor communication between doctors and nurses in U.S. hospitals. They conducted a comprehensive review of the literature and interviewed senior hospital administrators and clinical staff from seven U.S. hospitals of different types and sizes. Using this information, they were able to develop a scenario of possible outcomes and create conceptual and quantitative models to estimate inefficiency. While the situation at individual hospitals varies depending upon size and staffing, they found that the typical 500-bed facility stands to recoup an astounding $4 million with improved caregiver communication.

“An infusion of IT investment in the U.S. healthcare system is sorely needed as a step toward ensuring long-term sustainability,” said Agarwal. “This research quantifies and supports what we’ve intuitively known for some time — IT is a critical component in creating the cost efficiencies that will enable us to revamp and repair our beleaguered healthcare system — efficiencies that will be passed along to the consumer to significantly improve patient quality of care and access.”

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Source: University of Maryland’s Robert H. Smith School of Business, March 9, 2009


The Business Case for Web 2.0 in Healthcare: Building Brands and Redefining the Patient Experience

In The Business Case for Web 2.0 in Healthcare: Building Brands and Redefining the Patient Experience, experts recount how strategic utilization of Web 2.0 tools is driving prospective patients to their Web sites and to their facilities in record numbers. Even recruiters are feeling the impact of these efforts.

The Business Case for Web 2.0 in Healthcare: Building Brands and Redefining the Patient Experience is available from the Healthcare Intelligence Network for $157 by visiting our Online Bookstore or by calling toll-free (888) 446-3530.



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IMPORTANT NOTICE: This information is designed to provide accurate and authoritative information on the business of healthcare. It is distributed with the understanding that Healthcare Intelligence Network is not engaged in rendering legal advice. If legal advice is required, the services of a competent professional should be retained.



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