Cost Savings
Efficiency often comes with a cost
As the healthcare sector grapples with unprecedented challenges, many organisations are looking for ways to cut costs fast. What organisations discover the hard way is that the most efficient method is usually not the most effective. Efficiency may drive strong cost savings in the short term but more often than not, putting efficiency in the driver’s seat ends up negatively impacting the patient experience. This will decrease patient advocacy and increase complaints, resulting in a reduction of income – despite the original motivation to drive down costs.
Why your approach to cost saving might not be working
56
Percent of nurses believe that cost-cutting measures have a negative impact on patient care
50
Percent of Telehealth cases actually save money on your bottom line
10
Percent of patients represent 65% of health care costs
Understanding the real cost of savings
Despite multiple studies showing that understaffing comes at a significant financial and human cost, many healthcare organisations still look to decrease their expenditure by reducing staff. Cutting back to skeleton staff and then stretching existing staff to their limit will obviously lead to lower spending in the short term. However, in the long run understaffing can lead to long wait times, rushed consultations, misdiagnosis, and burned-out staff. These are all things that no healthcare organisation – let alone our healthcare sector as a whole – can afford.
“Efficiency is doing things right – effectiveness is doing the right things.” – Peter Drucker
When efficiency is used as the only driving force, there is no consideration for the big picture or the long game – why do we do what we do? Efficiency in itself is not a bad thing. Efficiency is simply a tool. In fact, it can be a great tool when used correctly – but you need to apply it to the right things. There is no use in trying to make an organisation’s processes more efficient if those processes are ineffective to begin with.
Let’s say you’re running an emergency department. Time and time again, people slip on the floor as soon as they step through the door. You carefully plan and implement a triage system for those injured to be treated as efficiently as possible. The triage might be very efficient – but it won’t be effective if more people keep slipping on the wet floor and getting hurt as a result. What’s more, the triage would be taking up staff and resources from other crucial tasks. Making the triage more efficient would be a prime example of doing things right – but not doing the right things.
Instead of focusing on the falls, a better way may be to examine why the floor is persistently wet, and acting on the cause of the water, instead of building systems to treat the outcomes of the falls. This would prevent people from getting injured in the first place, saving money and resources. This would also enable you to invest in making other critical services more efficient. In other words, you could focus on doing the right things the right way.
Driving efficiency in a sustainable way
Any approach that prioritises efficiency above all else assumes that doing things a certain way – i.e. with minimal staff and at a minimal cost – will help each and every organisation reach its cost saving targets. In reality, each organisation is unique and made up of unique individuals. Especially in our fractured modern age, organisations need to look for solutions that meet their needs and fit their people, rather than trying to force their organisation to fit inside a ready-made mould.
Our approach looks to understand the whole system. Instead of superficial fixes that fall apart in the long run, Patient Experience Group looks for solutions that drive efficiency improvements in a sustainable way, without impacting growth or revenue.