FROM THE BLOG

Improving Costs in Physician’s Practice

improving costs in physician's practice
This entry is part 3 of 3 in the series How to Get More Done in Your Clinic

In order to gain efficiency, the healthcare system needs to consider improving costs in physician’s practice, as well as mapping workflow and utilizing the patient portal.

According to the Organisation for Economic Co-operation and Development (OECD), of all the participating countries, the US spends the most on healthcare, over $8,000 each year per capita. However, as health costs are rising, healthcare revenues are flattening.

With increasing inefficiencies in healthcare and subsequent increased costs for poorer quality of care, a new way of thinking is needed in the healthcare industry in order to revolutionize the system. This can be found in lean methodology, a management strategy not typically associated with healthcare, but one which, when adopted, can eliminate waste, streamline processes, and ultimately help reduce costs.

The first step in improving costs in physician’s practice is eliminating waste, i.e., activities that do not add value or revenue. Examples of such waste in the healthcare industry are highlighted below:

  • Overproduction, e.g., purchasing items before they are needed, resulting in inventory storage
  • Repeating processes, e.g., re-testing, re-registering patients, or creating unnecessary reports and copies of documents
  • Material movement and motion, i.e., unnecessary movement of specimens, equipment, and staff, including inefficient walking about to search for patient notes, charts, forms etc.
  • Waiting time, including healthcare professionals waiting for late patients or missed appointments and patients waiting for doctors/nurses, etc.
  • Errors, including incorrect processing of orders, failure to follow procedures, recording incomplete information or missing key information, and billing errors
  • Suppressing potential, for example, a work culture in which creativity and willingness to develop is not valued, staff are not offered training, or their opinions/advice are ignored

Once these waste processes have been identified, we can begin to address them by means of techniques designed to improve the quality of healthcare processes. These often involve well-known methods like lean management, Six Sigma, or healthcare analytics.

Although these methods address the reduction of administration costs, it is also important in a changing medical landscape to concentrate on reducing patient-care costs. The healthcare industry needs to move away from a fee-for-service based system and focus on eliminating some of the patient-related costs.

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