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Cutting Costs in Health Care Is a Bad Idea

Everyone wants to save money. In healthcare, that translates to cutting costs. Unfortunately, many cost-cutting measures are not the best thing for patients or care providers. There’s much more to this equation than the bottom line.

What NOT to do

A recent article in Harvard Business Review noted that many attempts to cut healthcare costs “ultimately [lead] to higher costs and sometimes lower-quality care.” The problem arises when decision makers base cost-cutting decisions solely on the bottom line: “…reductions are usually made without considering the best mix of resources needed to deliver excellent patient outcomes in an efficient manner.”

The article lists several common mistakes. The first, cutting back on support staff, might seem like a good idea because it leads to an immediate reduction in payroll. The problem is that it also leads to an immediate reduction in support: “…disproportionately cutting support staff can be shortsighted when it lowers clinicians’ productivity and raises the cost of treating patients’ conditions.”

“Maximizing patient throughput” is listed as another common mistake. The article suggests measuring a “physician’s productivity … by the quality of outcomes achieved” rather than by the “number of patients seen.” Why? Because “you’ll find that physicians can often achieve overall greater productivity by spending more time with fewer patients.”

What now?

So, is it possible to cut costs but still provide quality care? Kathryn Teng, MD, on the Cleveland Clinic’s site, says value-based care is the answer. She writes, “Improving health outcomes while ignoring costs is not sustainable. And we certainly can’t cut costs without thinking about how it affects your care.”

Personalized healthcare addresses these goals simultaneously, Teng declares.

  1. Prevention cuts the cost of disease – Preventable diseases are at the root of “a whopping 60 percent of our healthcare costs.”
  2. Tailoring medications to individual patients – “The right medication at the right time for the right patient – that’s the goal of the growing field of pharmacogenetics.”
  3. Using tech for better care – “There’s a movement underway to develop tools that make Electronic health record (EHR) data smarter and more efficient.”

Spending money to save money

When people are “afflicted with some combination of poverty, homelessness, mental illness, addiction, and past trauma,” they may “rack up [healthcare] costs for avoidable reasons.” The Hennepin County Medical Center in Minneapolis, like some other hospitals and health systems, is trying to “eliminate avoidable hospital use.”

This is done, as reported in the New York Times, by combining social services with medical care. The goal is to “fix patients’ problems before they become expensive medical issues.” It’s working: “medical costs have fallen on average by 11 percent per year since … the pilot program began.”

Beyond the bottom line

At 365 Healthcare Staffing Services, we know there’s much more to patient care than the bottom line. We recruit and place healthcare professionals in per diem, travel, and permanent assignments in healthcare facilities throughout the United States. We would love to work with you, so give us a call at 310.436.3650 today!

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