15 Greatest Opportunities for Hospital Savings

The Premier healthcare alliance has identified 15 different categories of potential savings opportunities in hospitals.

The opportunities were identified through a new efficiency dashboard developed by a cross-functional team of internal and external subject matter experts. Based on feedback and data on more than 290 hospitals participating in Premier's QUEST collaborative, the dashboard identified the following five areas with the biggest opportunity for average annual savings at a typical 200- to 300-bed community hospital:

1.    Unnecessary labor expense, such as inefficient processes that take too long or require too many employees to complete: $6.18 million per hospital per year, and up to 5.1 percent of a hospital's total labor budget
2.    Excess readmissions: $3.83 million per hospital per year, and up to 9.6 percent of a hospital's budget
3.    Inappropriate length of stay: $2.63 million per hospital per year, and up to 5.4 percent of the hospital's budget
4.    Skill mix dollar variance that occurs when higher paid employees do work that less expensive or less experienced staff could do equally well: $2.38 million per hospital per year, and up to 6.2 percent of a hospital's total labor budget
5.    Unnecessary lab testing such as blood, urine or hemoglobin tests: $2.23 million per hospital per year, and up to 1.6 percent of a hospital's total lab budget

In addition to the top five categories of average annual savings, the dashboard measures 10 additional areas. For these categories, the average annual savings, per hospital are:

1.    Unnecessary diagnostic imaging: $1.52 million per hospital per year
2.    Unnecessary respiratory therapies: $1.50 million per hospital per year
3.    Blood utilization: $1.06 million per hospital per year
4.    Unnecessary overtime pay: $708,922 per hospital per year
5.    Unnecessary patient safety events, such as infections, medication errors: $564,126 per hospital per year
6.    Overuse of anti-infectives: $419,008 per hospital per year
7.    Overuse of intensive care services: $595,222 per hospital per year
8.    Excessive length of stay in the intensive care unit: $339,083 per hospital per year
9.    Anesthetic and sedation drug expense per operating room case: $68,089 per hospital per year
10.    Non-automated purchase orders: $51,700 per hospital per year

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