Healthcare Cost Savings

To change nursing assignments and transform workforce management, hospitals need to plan differently!

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Massachusetts, New Jersey, Ohio, and Pennsylvania are getting ready to vote on legislation to mandate nurse-patient ratios like California did.

We learned from California that without a sound workforce planning methodology that can be consistently executed, hospitals won’t obtain the benefits of the increased staff [1].

The Nash Group SDM20/20™ planning methodology is proven to:

  • reduce labor cost $2M-$8M
  • dismantle consumption of premium dollars
  • advance patient placement and aggregation
  • improve patient disposition and reduce length of stay
  • increase staff retention 20%-40% and improve recruitment cycles
  • make workforce operations and schedules sustainable

[1] Petsunee Thungjaroenkul, Greta G. Cummings, Amanda Embleton, “The Impact of Nurse Staffing on Hospital Costs and Patient Length of Stay: A Systematic Review”, NURSING ECONOMIC$/Sep-Oct 2007, Vol. 25, No. 5

The next big battle in healthcare will almost certainly be about costs!

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Mounting frustration from employers and employees will put cost controls on the table faster than you might think, making the next big battle in healthcare almost certainly about costs!

Right now frustration over healthcare costs is starting to percolate, particularly over the concern that the industry already maxed out the existing tools for cost control.

California, for example, has proposed moving the state to an all-payer system, to give the state more control over doctors and hospitals insurance plan charges (only Maryland has an all-payer system). Are we really going to have a debate about all-payer? Is this one of those times when California is the wacky outlier state, or one of those times when it’s a trendsetter?

Once employers reach the end of their rope on healthcare costs, the cost-control debate is going to ratchet into a higher gear. That is the prelude to a debate over all-payer in every state, but government intervention will probably be on the table, at least in some states. The cost-containment debate is coming because policymakers are not going to put too much new revenue on the table, and that means that both the private sector and Medicare will be paying the most.

Costs have risen modestly over the past few years, and private insurance has responded, in large part, by shifting more of those costs onto consumers through higher copays, deductibles, and coinsurance. But we’re at the end of what the market will bear on cost-sharing.

This is a scary position for providers. If employees are at their breaking point on cost-sharing, and employers reach their breaking point on cost growth, expect political systems to get serious about cutting those costs themselves. The question remains … are healthcare organizations and doctors ready for real changes in reimbursement?


The dramatic increase in deductibles, especially within employer-based coverage

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In employer-based health plans, the average deductible for a SINGLE person is over $1,500, according to Kaiser — 3 times higher than it was a decade ago. The trend toward increasingly high deductibles means families struggle to afford their care, even with insurance.

Now, experts are starting to reconsider whether high cost-sharing — once conceived as a way to turn employees into more discerning healthcare consumers — is working.

“High-deductible plans do reduce health-care costs, but they don’t seem to be doing it in smart ways,” USC professor Neeraj Sood told Bloomberg.

This frustration with existing cost-shifting tools — and the growing sense that we’ve basically maxed out their utility — is contributing to the renewed focus on underlying health care prices.

  • Many employers don’t feel they can shift any more costs onto their workers, but that’s largely how they’ve kept premiums in check for the past several years. And they certainly don’t want to shoulder higher bills themselves.
  • As that frustration mounts, expect to see a greater political appetite for real cost controls.

Electronic Health Records Were Supposed to Cut Medical Costs. They Haven’t!

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Despite the promise that electronic health records would cut billing costs, savings have yet to materialize, according to a major new study by researchers at Harvard Business School and Duke University.

The study, published in the February 20 issue of the Journal of the American Medical Association, looked at five types of visits: primary care visits, ER visits resulting in a patient discharge, general medicine hospital stays, outpatient surgical procedures, and inpatient surgeries.

Findings included:

– A primary care visit necessitated 13 minutes in billing and insurance-related activities, costing $20. The time and cost ramped up to 100 minutes and $215 for an inpatient surgery.
– Just the physicians’ portion of the time and cost spent on billing amounted to 3 minutes and about $6 for a primary care visit, up to 15 minutes and $51 for surgery.
– Physicians, who cost between $3 and $8 per minute, are doing administrative tasks that ascribe costing 50 cents a minute could do better, Kaplan says.

The hospital systems buying physician practices say vertical integration will facilitate care coordination and lower costs… Where’s the evidence?

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Contrary to physicians claims caught up in the consolidation wave, hospital administrators continue to grant most specialties pay hikes that outpace inflation by a healthy margin.

Modern Healthcare’s Physician Compensation Database, which tracks average salaries based on a survey of a dozen compensation consulting firms and organizations, shows the average pay for 22 specialties, including the relatively low-paying fields of family practice, pediatrics, and internal medicine, rose 10.8% between 2012 and 2017. Average physician pay now stands at $386,000 a year, up 10.9% from $348,000 in 2012.

In percentage terms, that pay hike is 4 percentage points more than the national inflation rate over the same period. In other words, despite consolidation, doctors in recent years have consistently pulled down steady, inflation-adjusted pay increases—something that has eluded most American workers.

International Transitions Homeward – A Different Approach to Healthcare Costs and Patients

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International Transitions Homeward

Undocumented, uninsured immigrants make up a significant portion of the uninsured patient population. These patients pose huge financial burdens for health systems today. Many of these patients  become trapped in the U.S. Healthcare system for years, even when that is not their intention.

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Well intentioned but unworkable – mandated ratios in Massachusetts

Posted by | Brigham and Women's Hospital, Health Leaders Media, Healthcare Cost Savings, Healthcare Data, Massachusetts Hospitals, Midnight Census, Nurse Patient Ratios, Nursing Staff, Patient Care, Patient Census, Patient Safety | One Comment

staffing imageThe mandated nurse-patient staffing ratios discussion is heating up in Massachusetts, where the proposed Patient Safety Act would set the maximum number of patients that could be cared for by hospital nurses.

In an article in Health Leaders Media, a spokesperson for the Massachusetts Nurses Association/National Nurses United said it was an “out and out unmitigated lie” that mandated ratios would be too expensive and rigid.

But the debate is far from one-sided among the nursing community. Read More

People who work in glass hospitals

Posted by | Healthcare Cost Savings, Healthcare Data, Healthcare Transparency, Hospital Finance, Tracking Costs | No Comments

Medical billThe drumbeat for transparent healthcare costs gets louder with each passing month. With the Affordable Care Act now in place, and many patients facing higher deductibles, consumers are paying attention to healthcare price tags like never before.

In a survey of more than 1,000 insured patients, Transunion Healthcare found that 55 percent have been scrutinizing their medical bills, and costs are impacting their opinions about the quality of care and their choice in providers.

According to an article in, when respondents were asked to rank the relative importance of considerations when choosing a provider, cost transparency was ranked second, right after “world class specialists and technology.”

No small factor has been the fact that last May, Read More

Two things nurse leaders always ask us

Posted by | Healthcare Cost Savings, Healthcare Data, Hospital Finance, Nursing Staff, Patient Census, SDM20/20TM, Tracking Costs | One Comment

TEMP-Image_1_4Every nursing executive faces unique challenges, but one of the biggest challenges is almost universal: the need to deliver high-quality bedside care within serious financial constraints.

Oftentimes, nurse leaders have already tried proprietary staffing software that helps them adjust staffing all day long. On the surface, that sounds like a good strategy, but too frequently nurses are sent home early or premium nursing costs are incurred. In those circumstances, costs are not predictable.

“The majority of hospitals are still budgeting to a midnight census,” says Mike Wasserman, who heads up business development for The Nash Group. “But workload is Read More