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Quality-Driven Margin Enhancement
About Our Firm |
"Even hospitals that traditionally have been among the best capitalized and financially robust say they are rethinking priorities and looking for ways to cut expenses." |
"As budgets tighten, more people decide medical care can wait." |
In the recent fiscal quarter, it has become increasingly apparent that the weakening world and domestic economy is beginning to have a significant negative impact on physicians and hospitals. As a result, many hospitals and health systems are turning to "traditional" cost cutting and layoff strategies. While these traditional strategies are effective where "fat" exists to be trimmed, beyond that point they can result in detrimental reductions in quality and service levels... which drive away patients and physicians, and result in a "downward spiral" of reduced volume, reduced revenue, and the need for more cost cutting in order to survive. So what can the reasonably efficient organization do when its cost structure still exceeds revenues? Maverick has found that a focus on the elimination of dangerous nosocomial events can have a significant positive impact on both cost structure and quality of care. This not only allows an organization to address current financial realities, but more importantly, positions it for breakthrough growth as the economy improves. |
For example, while evaluating the revenue risk that the new Medicare reimbursement regulations posed for one Midwestern client, we discovered something interesting: the excess costs exceeded the reimbursement risk by a factor of 4:1. The table to the right outlines the excess cost this client experienced during the first half of 2008 for some of the more prevalent HACs. Because this particular organization had implemented innovations in organization, process, and infrastructure required to manage nosocomial events, their incidence of hospital acquired conditions was approximately one fourth of that experienced nationally. This quality advantage translated into a $7 to $10 million margin impact - a savings that would have otherwise required layoff of 140 to 200 employees to achieve. Perhaps even more importantly, they have grown market share during a troubled time. Volume declines have been minimized, and they are well positioned for breakthrough growth as economic conditions improve. For more information, and to discuss how this approach can help your organization to weather the current economic storm, contact us here. |
Condition Pressure Ulcer DVT/PE Falls SSI UTI VCAI |
Average Cost per Case |
$15,000 $5,000 $5,000 $5,000 $20,000 $45,000 |
Hospital Acquired Conditions The "real" risk is around cost, not reimbursement |