Global healthcare spending will reach over $10 trillion by 2022. The US easily has the greatest healthcare spending at $10,224 per capita globally. It was just discovered that Americans spend more on the top prescription drugs than the rest of the world combined. In fact, the US tends to spend twice as much as other countries (one-fifth of the entire country’s GDP). However, contrary to what the figures suggest, healthcare margins are likely to shrink over the next five years. Because of this medical and healthcare providers will look to reduce internal costs.
The reasons include rising labor costs, changing insurance pay-out structures, uncertain regulatory climate and demographics shifts. For instance, Medicare and Medicaid patients, who cumulatively contribute a negative 9% return in 2017, are expected to make up 45% of the patient population by 2022.
Healthcare companies must find ways to cut costs without impacting quality of care. The industry is now relying on innovations and technological solutions. They are looking to improve hospital operational efficiency through automation and IT support for healthcare. The internet of things (IoT) can help organizations achieve significant cost efficiencies and save nearly $100 billion per year. Nearly 64% of physicians agree that this also reduces the immense pressure on healthcare personnel.
In this article, we will examine how technology can help check healthcare costs rising.
Top 4 Ways Smart Technology Can Reduce Healthcare Costs
Automation can Unlock True Efficiencies
Administrative tasks are a burden on operational efficiencies. Routine administrative tasks, such as entering data into EHR, ends up taking more time for doctors than patient care. This potentially leads to faster burnouts and a reduction in quality of care. Automating repetitive tasks can significantly improve processes and even allot extra time to physicians for patient care. There are a wide range of automation software available to manage or delegate administrative tasks. For instance, automated medical form-filling apps allow patients to scan test results and import them into their EMR. Similar applications abound in prescriptions, scheduling appointments, testing, billing, insurance claims etc. Automation allows healthcare organizations to shift the focus from reams of paperwork to actual patient care.
The Potential of Telemedicine
The recent pandemic really bore home the importance of telemedicine. Several factors including the ubiquity of mobile systems, faster Internet connections and changing insurance standards has propelled this technology to become a vital enabler of future healthcare. Investments in Virtual Care makes sense for healthcare organizations. It can cut costs and help patients achieve desired outcomes through flexible, and easily accessible clinical care. This can also reduce unnecessary emergency room visits and additional costs such as travel expenses and more. This technology can enable affordable healthcare for all and help an overstrained medical workforce to capitalize on operational efficiencies. IT consulting services are a great resource for investing in telemedicine.
Lower Staffing Costs with Scheduling Apps
More than 50% of the operational costs and up to 90% of variable costs of running a hospital comes from labor. The healthcare labor situation is dire owing to factors such as shortage of nurses, high turnover, and complicated staffing issues. Strained human resources have forced some hospitals to use voluntary overtime or the extension of managerial staff to fill gaps. These temporary solutions often turn out to be more expensive. Hospitals need innovative technical solutions that can aggregate relevant data such as past shifts, current patient needs, the expertise of existing staff and use predictive analytics to offer actionable solutions.
Scheduling apps offered by IT outsourcing services allow staff to circulate and update schedules on mobile devices in real time. It allows staff to visually monitor the number of open beds, emergency room capacity, and equipment status in one comprehensive mobile solution. Predictive analytics infused with AI could also predict future labor demands while addressing current needs. IT Support for Healthcare tools offer critical decision-making support in high-pressure situations and can adapt hospital schedules to reflect up-to-the-minute conditions. They also have a major positive impact on the bottom line with reductions in personnel costs (up to 40%), improved ROI with efficient staffing decisions, reduced costs (lower staff turnover and overtime), and more.
Reducing the Need for Specialists
Traditional hospital operations often overuse specialists for routine actions, such as, initial diagnosis, rendering healthcare very expensive. Wearable technology, such as smart watches can help here. These devices already track a whole variety of health data of users. This can be harnessed to aid remote monitoring of patients. The watches monitor health data 24/7/365, they can share all necessary information from patients with a unified healthcare system. These include alerts for doctors in case of serious deviations from baseline conditions. This cuts down on unnecessary doctor visits, helps save the time of specialists, and reduces healthcare costs.
It should come as no surprise that healthcare costs continue rise. Because of this a healthcare providers ability to reduce their costs is paramount. Expense To Profit has numerous partners in the medical expense space that provides solutions to do just that. Depending on your business, we are able to apply cost savings solutions averaging 18% for our client. Whether that is implementing technology to cut down on redundancies, human error or more traditional cost saving methods. Some of our clients in the past have used our services for better pricing on medical supplies or other expense areas they were unaware savings was possible. Examples are food services, IT solutions, pharmaceuticals and energy supply. Like any other business options to reduce cost can be the difference between operating and shutting down.
Reach out to us today to discuss how to save money without compromising quality of care.
Thank you Jace Butler at CurationChamp, one of our solution partners, for his contribution and explanation of this recent expense reduction solution. Jace can be contacted via: [email protected] or CurationChamp.com.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.