Hospitals have made strides in reducing costs, but if leaders really want to move the needle, they must address one particular big-ticket item: the high cost of skilled labor.
By many estimates, labor costs can eat up nearly 60 percent of a hospital’s budget. With so much of the pie taken up by that item, leaders must find ways to spread the reach of skilled clinicians, engage patients as part of the care team and generally be more efficient in managing the workforce, says Kaveh Safavi, M.D., global managing director of health at Accenture.
“Population health strategy is only part of the answer,” Safavi says. “If you eliminate unnecessary care, that reduces the total cost to society, but it doesn’t make producing the remaining care any less expensive.”
Technology, such as telemedicine, will play a key role in shifting labor costs. After a smaller test period, Catholic Health Initiatives in Englewood, Colo., began rolling out a tele- pharmacy program across its 105 hospitals. All prescription orders are funneled to a centralized facility, freeing clinical pharmacists to focus on caring for the patient, says Steve Moye, president of virtual health services at the system.
It’s still too early to determine the impact, but Moye expects the benefits to be twofold — improving the quality of care and avoiding medication errors, on the one hand, while also saving dollars on hiring extra help in rural areas. “You’re getting a higher value out of those clinical pharmacists by taking them out of the basement, more or less, and putting them on the floor, at the patient’s bedside.”
CHI is now exploring other uses of such technology, including virtual mental and behavioral health care, as well as a social platform that allows patients to take part in group therapy and speak to peers. A similar social platform called the Big White Wall, pioneered in the United Kingdom, announced in 2014 that it’s expanding to the United States.
Exploring new ways to deploy the workforce also requires a change in view of how care should be delivered, says Steve Ommen, M.D., dean of the Mayo Clinic’s Center for Connected Care. “The model of bricks and mortar medical facilities, the way we’ve done medicine for 150 years, is plateauing, and its future may be in decline as a sustainable business model,” he says. “If we’re going to reach more people through technology and extend our labor force, I think we need to challenge that convention, when it’s right.”