The Real Problem With Hospital Operations Today

Simply put, there are too many cooks in the kitchen. The providers providing the care have the least input on the care to be provided. Prescribe any pain killer, as long as it’s this one; perform any procedure, as long as it’s this one; order any test, as long as it’s this one. 

Due to the prescriptive nature of practicing medicine, providers spend an excessive amount of time documenting what they did. Sure it’s for recordkeeping and review, but it’s really for compliance. Compliance for all of the other cooks. Then that documentation gets reviewed by an army of administrative staff so the claim doesn’t get denied; the medication is covered; the procedure is authorized; etc. 

Now let’s move into the care setting; nurses spend 25-35% of their time on administrative tasks to close communication gaps, an additional 10-15% on communication and coordination, 5-15% on transport and logistical coordination, and 5-10% finding supplies and equipment. The list can go on with room preparation, specimen collection, medication management, and compliance activities. Overall 40-60% of the time is not spent delivering care and checking on patient well-being⁴. 

Lastly, we have the patient - this is best described through an anecdote. A few months ago, someone I know had a transplant. A few days after discharge, this person was up in the middle of the night with unbearable pain and I rushed them to the ER. While in the ER, various folks came in and out of their room to run tests and do assessments, but no one came to communicate what was happening and what the plan was. We were in the ER from about midnight to 11 am and not once did someone come to tell them, they were allowed to eat something, or what they were finding. Instead, we had people come in to ask about their medications (should be in the EMR), insurance information (should be in the EMR), urine sample (collected twice - not picked up the first time, and requested again a few hours later and finally collected a couple hours after that). By 9 am, we got word that they were doing okay and that it was a one-off likely from a movement or something they ate, and they were cleared for discharge. We sat there for 2 more hours until someone finally cleared them to leave.

Physicians have to become overqualified scribes, nurses have to become overqualified couriers, and patients have to become experts in navigating a very complex system during a time of duress. 

All of the challenges described above for physicians, nurses, and patients are gaps in communication and poor processes due to inefficient operations. The shortfalls of the process lead to immense administrative burdens and patient dissatisfaction which then snowballs into the crisis our healthcare system faces today. “Despite spending far more money than any peer nation, Americans live shorter lives and often face more barriers to care”¹.  In 2022, Americans spent $4.5T (that’s $4,500,000,000,000!!)².

One of the biggest factors contributing to the excess spending is the use and cost of labor. Labor can account for up to 60% of a hospital's operating expenses³. When we say labor, we mean all labor, because the more inefficient your operations are, the more labor is required to get it right (doctors, nurses, imaging techs, lab techs, administrative staff, revenue cycle staff, etc.)

On the flip side of this, is the labor shortage challenge. Hospitals are struggling to retain staff since the pandemic, and that challenge doesn’t seem to be going away any time soon. “we now must augment our existing workforce with technology that extends their capabilities” (Mark Moseley, Tampa General Hospital)⁵. 

So what is the problem with hospital operations? It relies too much on labor. You’ll see in our future posts, we’re not suggesting removing staff and automating everything, nor are we saying we should be using technology to do all of the hard work. There are tiers to this, and there is some low-hanging fruit that can remove hospitals’ heavy reliance on labor, and reduce labor expenses without necessarily laying people off. 

The idea is to elevate the staff, not replace them.

1. https://www.kff.org/health-policy-101-international-comparison-of-health-systems/?entry=table-of-contents-how-do-health-insurance-systems-and-coverage-in-the-u-s-compare-to-other-countries
2. https://www.forbes.com/sites/forbestechcouncil/2024/06/03/us-healthcare-is-not-a-system-its-a-market-and-its-broken/?sh=55f60d1c78fa
3. https://www.healthleadersmedia.com/revenue-cycle/3-challenges-hindering-hospitals-financial-stability
4. https://www.mckinsey.com/industries/healthcare/our-insights/reimagining-the-nursing-workload-finding-time-to-close-the-workforce-gap
5. https://www.beckershospitalreview.com/hospital-management-administration/we-may-not-ever-be-fully-staffed-health-system-c-suites-plan-for-the-future.html?utm_medium=email&utm_content=newsletter