Hospital execs zero in on length of stay

As the financial struggles continue for many hospitals and health systems, C-suite leaders are honing in on capacity and lowering length of stay to improve their bottom line.

The average adjusted expenses per inpatient day at hospitals was $2,883 in 2021, hitting as high as $4,181 in California, according to the Kaiser Family Foundation. Costs are steep to keep patients overnight, and many hospitals saw the length of stay increase during the COVID-19 pandemic. Now hospitals have fewer long-term patients, but face another problem: the inability to discharge patients.

Whether the discharge is delayed due to operational inefficiencies, staff shortages or lack of post-acute care beds, hospitals are often keeping patients longer and paying the price.

"In a resource-constrained environment, the smartest path [to improve the bottom line] has been to focus attention on length of stay management," said Matt Lutz, COO of HCA Florida Largo West Hospital. "By ensuring that we are properly tailoring our care for patients and ensuring that the right care is provided in the right setting, we've been able to increase the amount of patients that we serve. Focus around emergency department and inpatient LOS has allowed our team to increase earnings without the need for capital expenditure or new expense."

The average length of stay has dropped by 4 percent over the last year, but is still up 2 percent from 2020, according to Kaufman Hall's August National Hospital Flash Report. The adjusted patient days per calendar day are up 23 percent for the first half of 2023 compared to the first half of 2020. But there are signs hospitals are moving in the right direction. The average discharges per calendar day were up 5 percent in the first half of the year compared to the first half of 2020.

Reducing the length of stay also leads to better outcomes, which is especially crucial as health systems transition to value-based care. That's one of the strategic goals for Cleveland-based University Hospitals.

"We remain focused on optimizing our cost structure by reducing complications, overall length of stay, and variation in length of stay among physicians, as well as implementing ERAS and mobility initiatives, and preventative healthcare programming that helps our patients avoid ED visits and hospitalizations," Peter J. Pronovost, MD, PhD, chief quality and clinical transformation officer at University Hospitals, told Becker's. "Together, these initiatives enhance our ability to perform under fee-for-service and value-based payment models."

Focus on reducing length of stay and patient throughput can also alleviate capacity issues and allow more patients to receive care. Matthew Harinstein, MD, senior vice president, COO and associate chief medical officer of UPMC International and vice president of medical affairs and chief medical officer of UPMC McKeesport, said the system's teams are focused on streamlining the patient discharge process by collaborating on planning the next-day discharges in advance.

"We promptly address any potential challenges or opportunities in real-time, ensuring outpatient requirements and follow-up appointments are arranged before patients leave our care," said Dr. Harinstein. "This sets our patients up for a seamless care transition to best support outcomes and recovery, and it positions our team to free up more inpatient beds for the people who need them, optimizing our throughput and bed utilization."

Tipu Puri, MD, PhD, associate chief medical officer of UChicago Medicine, has also seen the benefits of streamlining discharges and lowering length of stay.

"The smartest decision my team has made over the last 12 months have been focusing on initiatives that improve operational efficiencies to increase capacity and access to care, and also support better communication and ease of practice for our clinical teams," Dr. Puri said. "These have included at the elbow support by operational physician leaders to address barriers and delays in care and patient logistics improvements that support more efficient rounds and improved multidisciplinary communication. We've looked for win-win strategies and started with those."

Virginia Mason Franciscan Health in Seattle is also diving into capacity and patient flow as a means to make a difference financially.

"We're spending the second half of 2023 very focused on improving throughput in our clinical settings, looking at capacity and resources, and understanding where we can be more efficient," said Ingrid Gerbino, chief innovation officer of Virginia Mason Seattle Medical Center. "We have to be able to deliver the access to quality care and patient experience that our communities need, so we're evaluating everything from communication to staffing to better utilize resources throughout the system."


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