Hospitals persist in navigating challenges to balance patient volume, financial sustainability and operational efficiency. Despite the agility demonstrated by hospitals and health systems in the last two years, over 33% are operating on negative margins, as reported by the American Hospital Association (AHA). Sustained patient demand, driven by the aging population’s need for care, coupled with rising costs of medical supplies and reduced Medicaid/Medicare reimbursements, has amplified pressures to enhance profit margins and operational efficiencies.
These challenges have compelled hospitals to make less-than-ideal decisions, as per a recent report by healthcare consulting firm Kaufman Hall, revealing that 66% reported suboptimal capacity in 2023 due to staffing shortages. Additionally, 70% of health system executives note patient retention in emergency departments due to staffing or bed capacity restraints. Some states have even resorted to turning patients away, except in critical cases, resulting in unoccupied beds.
Strapped by understaffing, the challenge lies in prioritizing short-term financial solvency by leaving beds empty or incurring the expense of contract workers to address capacity issues and ensure quality outcomes for patients.
The impact of staffing shortages and operational inefficiencies on revenue
Staffing shortages can lead to delays in patient care, longer wait times for appointments and admitted patients and increased lengths of stay, impacting patient safety. These delays result in fewer patients being served, affecting both the front-of-house patient engagement and back-office revenue cycle functions. This interconnected impact can cause hospitals to miss out on potential revenue from services that could have been provided with adequate staffing levels.
When hospitals are understaffed, they are unable to maximize the potential of their facilities and resources. Unoccupied beds and rooms are lost opportunities to serve patients. Lower capacity utilization leads to immediate revenue losses and inefficiencies in resource allocation.
Inefficient processes and workflows often lead to the misallocation of resources, which increases operating costs and also reduces the capacity to generate revenue. Operational inefficiencies can also affect patients if they must stay admitted longer due to delays in diagnostic tests, consultations and discharge planning. Longer lengths of stay strain hospitals resources and can mean that hospitals can’t admit any new patients.
Key Considerations to Enhance Efficiency and Improve Patient Outcomes
Streamlining Operations
Streamlining processes helps to enhance productivity and efficiency to ensure patient flow. Healthcare processes drive activity and outcomes and impacts patient experience and operations. By optimizing hospital processes, integrating technology and encouraging collaboration across interdisciplinary teams, hospitals can streamline operations and reduce administrative burden and costs.
- Process optimization: To enhance organizational processes, hospitals can begin by analyzing existing workflows to identify and streamline unessential steps and redundancies. For instance, streamlining the admission and discharge process to ensure smooth patient flow throughout the care process. This allows hospitals to reduce wait times, expedite diagnostic tests and procedures and ensure patient needs are met promptly.
- Technology integration:Leveraging technology, including AI, can improve efficiency by streamlining communication and completing routine tasks. Hospitals can automate administrative tasks such as scheduling appointments, registering patients and billing to reduce manual effort and minimize errors. This also enables healthcare professionals to focus more on providing quality patient care.
- Collaboration across interdisciplinary teams:Collaboration across different teams can improve communication and ensure coordination in patient care delivery, reducing the risks of errors and enhancing efficiency and patient safety. Interdisciplinary collaboration allows healthcare teams to develop comprehensive care plans that can better address patient needs. Poor communication across different disciplines can lead to delays in care and disruptions to patient flow. Streamlined operations contribute to enhanced time management and reduced overhead expenses.
Optimized Staff Resources
Effective staff utilization is critical to maximize productivity and minimize potential revenue loss. Part of this includes having staff that are effectively trained and equipped with the skills they need to deliver patient care efficiently. By ensuring adequate training for staff, hospitals can minimize medical errors, complications and readmissions, which can be costly. Skilled staff members also contribute to delivering positive patient experiences and driving patient satisfaction and loyalty. Additionally, cross-training staff members allows healthcare workers to develop skills across multiple roles and departments and can help hospitals quickly adapt to fluctuations in patient volume and unexpected emergencies.
Engaging External Resources
Ensuring smooth patient flow hinges on adequate staffing levels. Regular assessments of staffing needs are crucial for healthcare systems and hospitals to meet patient demands. One effective consideration for organizations aiming to address operational efficiencies and meet patient demand is to partner with healthcare staffing firms. For instance, at Soliant, we offer the flexibility to scale up or down based on patient demand and the needs of the hospital, allowing them to fill short-term gaps or manage seasonal fluctuations efficiently. Contract workers enable organizations to sustain productivity and continue to meet the needs of patients, mitigating potential revenue loss and ensuring operational resilience.
Recruiting can also be a financial burden on hospitals and health systems. One estimate reports that the average cost per hire is approximately $4,700. External staffing partners have the tools and expertise to identify and vet potential employees quickly. Hospitals can save time and resources by leveraging a staffing partner that has extensive industry knowledge and access to a pool of qualified
candidates.
Beyond staffing, hospitals can also consider outsourcing functions and processes to external vendors or service providers. Examples include IT support, payroll or even customer service. This approach allows hospitals to tap into specialized expertise, empowering healthcare providers to focus on delivering optimal patient care.
Hospitals must proactively seek solutions to enhance efficiency and meet patient demands without sacrificing financial sustainability and quality of care. By streamlining operations, optimizing staff resources and engaging external resources, hospitals can reduce operational inefficiencies and save costs, while also meeting patient needs and demands.
Patrick Dotts
Patrick Dotts is a senior vice president at national healthcare staffing firm Soliant and has worked in the staffing industry for over ten years.
