Late last month, the Centers for Medicare & Medicaid Services (CMS) announced it was moving forward on making bundled payments mandatory for cardiac care services, specifically care for acute myocardial infarction and coronary artery bypass graft surgeries. The new bundled payments regulations will apply to hospitals in 98 randomly selected US metropolitan areas starting in July 2017.
The new CMS ruling is being touted as a big step forward for value-based care and will likely drive a greater focus on creating new efficiencies in hospitals, many of which are already experiencing enormous financial pressures. By one estimate at least 60 rural hospitals have closed in the last five years. In the first half of 2016, at least another 12 hospitals have shut down, according Becker’s Hospital Review. Falling reimbursement rates, particularly from CMS, as well as a drop in patient volume are often cited as reasons many hospital systems are failing.
Given this landscape of increased financial pressure on hospitals, new and innovative ways of creating operating efficiencies are expected to be a growing focus among hospital executives.
How Are Hospitals Creating Efficiency: Supply Chain Management
One of the ways hospitals are creating greater efficiencies is through new, technology-enabled systems for more efficient supply chain management systems. According to the Wall Street Journal, one Illinois and Missouri-based hospital chain of 12 hospitals, BJC HealthCare, is investing millions in using radio frequency identification (RFID markers) to track medical devices in the system.
This type of automatic tracking system allows the hospital network to maintain a lower inventory of medical supply stock on hand, 23% less by one estimate. Maintaining fewer supplies on hand is lowering costs. The RFID-enabled tracking system also helps the hospital automatically detect supplies that are close to expiration and reorder supplies as they run low.
Using Location-Based Services
Business analysts from Technavio are predicting that the location-based services market in healthcare will see significant growth with the push towards creating greater efficiency operations. Beyond hospital-based RFID tag expansion, analysts are also predicting the widespread adoption of WiFi networks and healthcare wearables will help hospitals operate more efficiently. With greater network availability, in-hospital mobile-to-mobile communications are expected to grow and would increasingly allow hospital staff to easily communicate with other teams, patients, and track equipment and supplies labeled with digital location markers.
The widespread and growing adoption of healthcare wearables connected through hospitals’ increasingly robust digital networks is also predicted to drive new, more efficient forms of patient-monitoring, including out-of-hospital patients, who are still monitored by hospital staff.
New Partnerships for Greater Efficiency
Companies with deep experience in the healthcare industry are also forming new partnerships and alignments to push forward new services and products aimed at building greater system efficiencies.
Last month, for example, ThoughtWire, a Toronto-based software company, and
GE Healthcare Partners, a consulting arm of GE Healthcare, announced a five-year agreement to work together on launching new digital tools for improving the patient experience and upping quality of care and productivity.
Among the areas of focus for the ThoughtWire and GE Healthcare Partners collaboration are speeding up turn-around time on lab work and imaging test results, shortening hospital stays, and shortening patient wait times in the emergency room.
Smarter Patient Logistics
Better patient logistics management is also a growing area of focus within the push towards greater hospital efficiency. One example of this is Medlert Inc.’s push to build software-driven patient logistics tools with a number of California healthcare systems. These tools offer healthcare providers and care coordinators a better way to manage the patient journey into and out of the hospital and allow care teams to track and order services in the hospital as well as home care, meal services, labs, and other forms of follow-up care.
The new patient logistics management tools will help providers reduce time on task when ordering any form of patient transport or transfer and also track a patient’s movement into, through, and out of the hospital system. The platform also offers a marketplace broadcasting tool to seek the timeliest, lowest cost bids to meet any patient transportation needs, and thereby helps healthcare systems maximize efficiency and minimize cost during intake, discharge, and inter-facility transfer.
Competitive Financial Climate Driving Healthcare Innovation
The continued movement towards value-based reimbursement at a time when many hospitals are struggling in an increasingly competitive market is forcing many hospital executives to look for new solutions to build greater operational efficiency. Technologies like RFID tags, location-based services, patient wearables, and patient logistics platforms are some of tools that growing in popularity as the focus sharply shifts to the need to drive down costs and improve patient care. We expect the market will continue to grow in this direction, as hospital executives increasingly look to technology to improve communications, move data, connect teams, and power new healthcare models that allow for better care at lower cost.