Hospitals slow in cost-cutting efforts, survey finds

Hospitals are making some progress with efforts to reduce costs but at a slow pace, according to a Kaufman Hall survey.

The survey was completed in June and July by nearly190 senior executives from hospitals and health systems.

Five findings:

1. Fifty-eight percent of respondents reported their organizations have processes and structures to hold leaders accountable to performance for cost-cutting goals. That's an increase from 46 percent last year, when Kaufman Hall surveyed 173 senior healthcare executives.

2. The number of respondents who said their organizations effectively use clinical pathways, protocols and guidelines in establishing a common approach to treatment rose from 47 percent last year to 56 percent this year.

3. More respondents also said cost-cutting improvement targets have been distributed across their organizations (73 percent this year versus 53 percent last year).

4. The survey found the top progress in cost reduction was in traditional cost-cutting areas like supply chain and nonlabor cost, while the lowest progress was in service rationalization. Sixty-four percent of respondents reported a reduction of 3 percent or more in supply chain and nonlabor cost. But 61 percent said their organizations have seen no progress in the area of service rationalization.

5. Additionally, 46 percent of respondents said their organizations have seen no progress in removing cost from inappropriate clinical variation. 

Access the full survey findings here.


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